Context: The Union Government has amended the Electricity Rules, 2005 to strengthen and clarify the regulatory framework for captive power generation.
About Captive Power Generation:
- Meaning: Electricity generated by industries primarily for their own consumption instead of purchasing from the public grid.
- Legal basis: Provided under the Electricity Act, 2003 and regulated by the Electricity Rules, 2005.
- Ownership & consumption rule: Captive users must hold ≥26% ownership in the plant and consume ≥51% of the electricity generated annually.
- Group captive model: Multiple entities may jointly own a plant; power consumption must broadly match their equity share (±10% variation allowed).
- Key benefit: Captive users are exempt from Cross-Subsidy Surcharge (CSS) and Additional Surcharge, making electricity cheaper.
- Recent amendment: Captive status will be verified for the entire financial year by Load Despatch Centres.
- Non-compliance: If ownership or consumption criteria are not met, the plant loses captive status for that year and surcharges become applicable.
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