The document discusses India's captive power policy. Some key points: - Captive generation was first recognized in 1948 and allowed under certain conditions. The Electricity Act of 2003 removed restrictions and allowed any person to set up a captive generating plant. - A captive generating plant is defined as one set up primarily to generate power for one's own use. Excess power can be sold to the grid. Dedicated transmission lines are also allowed. - The objective is to increase competitive pressure on utilities and prevent high cross-subsidies for industrial consumers. However, open access and transmission tariffs can limit available capacity for the grid. - Rules require captive users to own at least 26% of

1. CAPTIVE POWER POLICY
Presented BY:-
NAVAJYOTI MARTHA

2. HISTORY
• Captive generation “concept”& “activity” was
recognized under the repealed law prior to
Electricity Act-2003.
• In section 44 of Electricity (Supply) Act,1948
there was the provision for captive generation.
• The provision enabled that any licensee/person
(other than central govt. body) can set up captive
generation by taking the permission of SEB.

3. • Also the SEB need to consult with CEA before
giving any consent if the capacity of generation
exceeds 25 MW.
• The restrictions & controls on captive generation
have been scrapped under the EA-2003.
• The new act allows any person to set up captive
generating plant.

4. PROVISION FOR CAPTIVE GENERATION
UNDER ELECTRICITY ACT-2003
• Under section 2(8), the expression “captive
generating plant” has been defined as a
generating plant set up by any
person/society/association to generate
electricity primarily for his/their own use .
• Section 9(1) stipulates that the person need to
construct, maintain “DEDICATED” transmission
lines primarily for his own use & that can sell the
“surplus power” available to the grid.

5. • They can avail “open access” to the existing
transmission lines subjected to availability of
adequate transmission capacity determined by
STU/CTU.
• Also the person shall not required to obtain license
for setup,operating,maintaining a “dedicated T/L”
if the person complies with the followings
(1)Grid code,
(2)Technical standards,
(3)system of operation as per the norms of the
concerned SLDC/RLDC

6. • Also “CESS” & “EXCISE DUTY” levied at
different stages of Production or at the stage of
Retail Sale.
• Also both the taxes are leviable for different
purposes. “CESS” charged on consumption of
electricity & “EXCISE DUTY” charged on the
consumption of electricity on the installed
capacity within the premises.

7. • To the extent of sale the captive plants treated at
par with the regulations applicable to the
generating companies.
• Under section 9,the person owning captive
generating plant has also been allowed “OPEN
ACCESS” for conveyance of energy to a destination
for his own use without paying any “SURCHARGE”.
• The objective of the act to create “Competitive
Pressure” on the utilities to prevent charging
industrial consumers with high Cross subsidy.

8. REALITY ISSUES
• Most of the available capacity may not available to
Grid because of 2 reasons
(1) Open Access
(2)Transmission Tariff
Because the open access linked to the attitude of the
state & RLDC/SLDC.
In case of postage transmission tariff captive capacity
has to pay the “entire transmission cost”

9. THE ELECTRICITY RULE-2005
• According to the rule in case of a power plant-
(1) Captive users shall not hold less than 26% of
the ownership of the plant.
(2) Such Captive users shall not consume less than
51% of the electricity generated.

10. • NEP spells the use of the “SPARE CAPACITY”
of the Captive Generators for contributing to
the GRID.
• So that the “Quality of power supply” &
“Competitive” environment will be enhanced.

11. ACCORDING TO NTP
• A two-part tariff structure should be adopted for all
long term contracts to facilitate “Merit Order
dispatch”.
• “Availability Based Tariff (ABT)” framework would be
extended to generating stations (including grid
connected captive plants of capacities as determined
by the SERC).
• Appropriate Commission may also introduce
differential rates of fixed charges for peak and off
peak hours for better management of load.
• The basic focus is to Harnessing captive generation .

12. CAPTIVE POLICY OF ORISSA
• The Commission through a consultative process
followed by Public Hearing on 03.01.2008 had
issued a “Policy on harnessing of Surplus Power”
from Captive Generating Plants.
(1)Firm Power:
Those captive generators who give a commitment
for supply of power for a period of more than 3
months & up to 1 year shall be considered as
supplier of firm power of electricity form their
Captive Generating Plants.

13. • The procurement of power through the
Competitive Bidding route as per provision under
Section-63 of Electricity Act, 2003.
• To avoid cartelization of a few large CGPs artificially
boosting the pricing of surplus power from CGPs
Commission has capped .
• The “Acceptable Cost” determined through the
competitive bidding route should be within 10% of
the Maximum of cost of generation which can be
certified by reputed firm of CAs.

14. • State Utilities are free to purchase Power at a
higher rate than 110 % of the cost of
generation through the competitive route for
purpose of “TRADING”.
• CGPs selling power to GRIDCO will have the
indirect advantage of saving in “Transmission
charge and Transmission loss” which at 2007-
08 level will be around 34 to 35 paisa/ unit.

15. (2) Non-firm Power:
• Those of the captive generators who are
capable of giving day ahead schedule but are
not in a position to give supply continuously for a
period up to three months.
• If a CGP is in a position to give its day ahead
schedule for 21 days, 35 days, 40 days etc. during
a period of three months shall be considered as
non-firm supplier of electricity in a block period
of 3 months.

16. • It has to declare at the beginning of the
period of three months about the volume of
energy that they would be supplying to the
state grid.
• In case of failure to supply the declared
volume, they may have to pay penalty at
double the rate.

17. (3) Inadvertent Power:
• Power injected by the Captive Generators
without giving day ahead schedule.
• It would be priced equal to the pooled cost of
hydro power of the State.
• However, there shall be no payment for any kind
of injection firm, non-firm or inadvertent at
frequency of 50.4 HZ or more as a matter of grid
discipline.

18. • CGPs are given the facilities like land at
concessional rate, water supply and other benefits
by the state for setting up the industries If they
enter into an agreement for sale of their surplus
power to the state.
• The Captive Generating Plants are free to sell their
power through Open Access if they do not want to
participate in a bidding process for determination
of tariff for sale of power inside Orissa to GRIDCO.

19. THANK U