A captive generating plant is a power plant set up by any person to generate electricity primarily for his own use and includes a power plant set up by any co-operative society or association of persons for generating electricity primarily for use of members of such co-operative society or association (“CGP”). CGPs are primarily regulated under the Electricity Act, 2003 (“Act”) and the Electricity Rules, 2005 (“Rules”) and are developed for the purpose of collective usage of electricity by a group of commercial consumers.
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- Setting up CGPs
Generating stations, set up in terms of the Act, have the right to have open access for the purposes of carrying electricity from a CGP to an electricity consumer based on the availability of transmission facility. Such generating stations are not required to procure any license for the purpose of supplying electricity generated from a CGP to any licensee in accordance with the provisions of the Act.
- Eligibility criteria for CGPs
Under Rule 3 of the Rules, a solar power plant qualifies to be a CGP only in cases where the following criteria are met (collectively, “Eligibility Criteria”):
- not less than twenty six percent (26%) of the ownership is held by the captive user(s); and
- not less than fifty one percent (51%) of the aggregate electricity generated in such plant, determined on an annual basis, is consumed for captive use.
Ownership in relation to a generating station or a power plant set up by a company or any other body corporate means the equity share capital with voting rights. In other cases, ownership refers to proprietary interest and control over such generating station or power plant.