Ministry of Power reverts rule on captive power
POWER & RENEWABLE ENERGY

Ministry of Power reverts rule on captive power

The Ministry of Power has made amendments to the Electricity Rules of 2005, reverting to the previous regulation. This change allows collective captive users to maintain a minimum ownership of 26% in a group captive open-access project. The Ministry's notification specifies that the term "captive user" will be replaced with "captive users" in certain sections of the rules.

In July, the Ministry issued an amendment that required every captive power user, even in a group captive open access structure, to have a minimum ownership of 26%. This decision was met with criticism from various stakeholders who argued that it would discourage the group captive open access model, which currently allows multiple consumers to participate.

The latest amendment, known as the Electricity (Third Amendment) Rules, 2023, comes after several stakeholders raised concerns with the Ministry. The Ministry had promised to provide clarification on the matter.

Additionally, the Ministry has appointed the Central Electricity Authority to verify the captive status of projects that supply power to consumers in different states. This move aims to ensure consistency in the process across all states.

Furthermore, the Ministry has allowed power consumption by the subsidiary or holding company of the captive user to be considered as captive consumption by the captive user.

The group captive model of open access is highly favoured by the commercial and industrial sectors because it enables them to use clean energy and reduce energy costs significantly.


As per the General Review Report 2023 by the Central Electricity Authority (CEA), renewable energy, including wind and solar, made up 9.07% of the total installed captive capacity as of March 31, 2022.

In July of this year, the Madhya Pradesh Electricity Regulatory Commission designated the Madhya Pradesh Power Transmission Company as the authority responsible for determining the captive status of captive generating projects and users in the state.

The Ministry of Power has made amendments to the Electricity Rules of 2005, reverting to the previous regulation. This change allows collective captive users to maintain a minimum ownership of 26% in a group captive open-access project. The Ministry's notification specifies that the term captive user will be replaced with captive users in certain sections of the rules.In July, the Ministry issued an amendment that required every captive power user, even in a group captive open access structure, to have a minimum ownership of 26%. This decision was met with criticism from various stakeholders who argued that it would discourage the group captive open access model, which currently allows multiple consumers to participate.The latest amendment, known as the Electricity (Third Amendment) Rules, 2023, comes after several stakeholders raised concerns with the Ministry. The Ministry had promised to provide clarification on the matter.Additionally, the Ministry has appointed the Central Electricity Authority to verify the captive status of projects that supply power to consumers in different states. This move aims to ensure consistency in the process across all states.Furthermore, the Ministry has allowed power consumption by the subsidiary or holding company of the captive user to be considered as captive consumption by the captive user.The group captive model of open access is highly favoured by the commercial and industrial sectors because it enables them to use clean energy and reduce energy costs significantly.As per the General Review Report 2023 by the Central Electricity Authority (CEA), renewable energy, including wind and solar, made up 9.07% of the total installed captive capacity as of March 31, 2022.In July of this year, the Madhya Pradesh Electricity Regulatory Commission designated the Madhya Pradesh Power Transmission Company as the authority responsible for determining the captive status of captive generating projects and users in the state.

Next Story
Infrastructure Energy

KEC Secures Rs 10, 380 Mn Substation Order in Saudi Arabia

KEC International Ltd., a global infrastructure EPC major, and an RPG Group company, has secured a new order worth Rs 10,380 million for the Design, Supply and Installation of a 380 kV GIS Substation in Saudi Arabia.Vimal Kejriwal, MD & CEO, KEC International Ltd., commented, “We are delighted with the successive order wins in our T&D business. In a landmark achievement, we have secured our largest ever substation order. This prestigious order in the Middle East has widened our portfolio and strengthened our presence in the region. With this strategic win, our year-to-date or..

Next Story
Infrastructure Urban

Central Bank of India executes first fully digital SCF deal on PSB Xchange

In a major advancement for India’s banking sector, Central Bank of India (CBI) has successfully completed the country’s first fully digital supply chain finance (SCF) transaction on PSB Xchange—a unified multi-lender platform launched by PSB Alliance. PSB Xchange is designed to connect public and private sector banks, NBFCs, and fintechs with corporates and their channel partners to facilitate supply chain finance and small business loans. The transaction marks the first time a fintech-originated corporate lead has been seamlessly processed through the PSB Xchange ecosystem. The lead fl..

Next Story
Infrastructure Energy

Atlanta Electricals secures Rs 1,835 Mn transformer order from BNC Power

Atlanta Electricals Limited (“Atlanta”) has secured an order worth Rs 1,835 million from BNC Power Projects Ltd for the supply of extra high voltage (EHV) transformers and a bus reactor for its Pugal site. The contract includes a mix of 315 MVA, 400 KV and 100 MVA, 132 KV transformers along with a 400 KV bus reactor. The project scope encompasses design, manufacturing, testing, and supply to the project site. Deliveries will be sequenced following engineering and drawing approvals, offering multi-quarter execution visibility and ensuring a steady production run-rate. The order will be ex..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?