Energetica India Magazine March - April 2026

energetica INDIA- Mar-Apr_2026 39 FEATURE STORY Talking about the model prefer- ence, Rear Admiral R Sreenivas, VSM, (Retd.), Chief Executive Offi - cer, Bondada Group, remarks, “The choice of model depends on a com- pany’s risk appetite, capital alloca- tion strategy, power demand consis- tency, and regulatory landscape in long-term operations of the project. This is called a ‘Captive’ project. This yields the lowest cost of power for the consumer but requires a deep commitment to the project and involves embracing the risks that come with such commitment. For e.g., the power banking scenario may completely change to- morrow, and the consumer may be left with excess project capacity with no takers. Or, the project may get stalled at the construction stage itself due to ROW issues, leading to massive delays and losses.” He further shares that generally, businesses prefer to just ‘buy’ power rather than foot the bill for the massive CAPEX and operational intensity typical for large-scale power projects. “There are two options here – buy power from a completely unassociated project, which is called Third Party supply. Or, draw power from a project where the consumer qualifies as a Group Captive consumer.” According to Sharma, the Group Captive Open Access model is the most popular for large-scale industries to shift to renew- able energy. Under this model, the power consumer puts up a part of the project cost as equity investment and is exempt from the levy of cross-subsidy (CSS) and additional surcharge (AS) on the power drawn by the consumer from the power project. “Third party supply attracts CSS and AS. Typically, CSS and AS amount to INR 2 or more per unit of electricity. Hence, this is a significant saving for the end consumer and makes the group captive model a very attractive one.” the operating state. Currently, group captive structures are gaining significant traction as they strike a balance between cost efficiency and shared investment, especially for mid-sized consumers who may not independently meet captive thresh- olds.” According to Bhat, third-party open access is the most pop- ular model today, and for good reason. Zero equity. Fast to execute. Immediate savings. “For a consumer who wants to reduce their power bill without taking on project risk, it’s the obvious entry point. Captive and group captive offer deeper savings and greater energy security over the long run. But they require equity participation and balance sheet commit- ment. Not every consumer is ready for that,” he reasons. Patel highlights that captive and group captive models tend to deliver higher savings, mainly because they help avoid ad- ditional charges like surcharges, making them ideal for com- panies with steady, large power needs. Jain observes that captive models suit large consumers with steady load and capital availability, offering full control and long-term savings. “Group captive spreads investment and consumption across multiple consumers, reducing individu- al financial burden while retaining benefits. Currently, group captive structures are gaining traction due to relaxed norms, balancing cost-effectiveness with regulatory ease.” How should one choose? According to Behera, in broad terms: • Third-party suits consumers prioritising flexibility and low upfront investment. • Captive suits consumers with a very large, stable load and a willingness to invest directly. • Group captive suits consumers wanting better economics than third-party while sharing investment and consumption obligations with others. “Today, for larger off-site renewable procurement in India, group captive remains one of the most commercially popular structures, particularly where consumers are focused on cost savings and long-term tariff certainty. That said, third-par- ty open access is also relevant where regulatory barriers are manageable, and the consumer wants an asset-light model,” opines Behera. Group Captive Becomes Even More Attractive In March 2026, the Ministry of Power amended the Elec- tricity Rules relating to captive generating plants to remove interpretational ambiguities, improve ease of doing business, and make the captive framework more workable. The amend- ments retain the core thresholds of 26 percent ownership and 51 percent aggregate consumption, but they provide greater flexibility for group captive users. Importantly, excess con - sumption beyond proportionate entitlement may not qualify as individual captive consumption, but it still counts toward the collective captive consumption qualifying requirement of the group. According to Patel, the recent relaxation allowing collective 51 consumption is a big unlock for C&I consumers. “Earli-