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CAPTIVE POWER POLICY. BaCkGrOuNd. Section 44 of the Electricity(Supply) Act, 1948 gave birth to Captive Generation. Any other person to establish or to acquire a new generating station or to extend any major unit of plant has to take permission from SEB

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Section 44 of the Electricity(Supply) Act, 1948 gave birth to Captive Generation.

  • Any other person to establish or to acquire a new generating station or to extend any major unit of plant has to take permission from SEB
  • If capacity > 25MW then SEB required to consult CEA

These restrictions & control on captive generation in Supply Act, 1948 is removed under Electricity Act 2003, Section 2

(8) “Captive generating plant” means 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 cooperative society or association.

Captive generation is generation primarily for own use

section 9 captive generation
Section 9. (Captive generation):


  • A person may construct, maintain or operate a captive generating plant and dedicated transmission lines primarily for his own use, and he can sell the surplus power available to the grid.
  • Owner can construct dedicated transmission line for carrying electricity from captive plant to the destination.

Electicity(Amendment) Act, 2007 (26 of 2007) clearly state that it doesn’t require a licence for supplying power to a licensee or an open access consumer

section 9 captive generation1
Section 9. (Captive generation):


Electricity generated from captive plant can be transmit through the grid to the destination.

  • He should have the right to open access in the intervening transmission facilities, subject to availability of transmission capacity.
  • Availability of Transmission facility determined by the central/ state Transmission Utility
  • Dispute if any on the issue shall be studied and settled upon by the Appropriate Commission.
national electricity policy
National electricity policy
  • Captive power plant facilitate the creation of employment opportunities through speedy and efficient growth of industry.
  • Captive power plant help in meeting the demand for power by harnessing the surplus capacity.
  • Grid inter-connections for captive generators shall be facilitated as per section 30 of the Act(Transmission within a State).

Section 30: this provision entails the State commission to facilitate and promote transmission and inter-connection arrangement within its territorial jurisdiction for the transmission and supply of electricity by economical and efficient utilisation of electricity.

national tariff policy
National Tariff Policy
  • Distribution licensees can buy power from Captive Plant using the guidelines issued by the Central Government under section 63 of the Act.
  • Captive generators can be allowed to inject into the grid under the Availability Based Tariff (ABT) mechanism.

Section 63 (Determination of tariff by bidding process): It state that Central Government shall formulate guideline for transparent process of competitive bidding and tariff determined through competitive bidding by following these guideline shall be accepted by the regulatory commission.

electricity rules 2005
Electricity Rules 2005
  • Not < than 26 % of the ownership should be held by the captive user and
  • Not <than 51 % of the aggregate electricity generated in such plant, determined on an annual basis, should be consumed for the captive use.
west bengal policy in respect of captive power plants
West BengalPolicy in Respect of Captive Power Plants.
  • New industries may be allowed to set up Captive Power Plant for continuous running provided the same is not connected to the Power Utility's Grid and there is no third party sale. If such captive generation is through installation of diesel generator se, control of noise pollution must be as per stipulations of the Pollution Control Board.
  • Environment clearance should be obtained from the West Bengal Pollution Control Board and Environment Department of the State Government.