MoP Targets Co-operatives, SPVs, and Associations in New Captive Power Plant Rules

The Ministry of Power has released draft amendments outlining the requirements for captive generating plants (CPG).

Under the draft rules, a power plant will qualify as a captive generating plant only if at least 26 percent of ownership is held by captive users and a minimum of 51 percent of the electricity generated annually is consumed for captive use. In co-operative societies, these conditions apply collectively to members, while for associations of persons, individual captive consumption benefits are capped at 110 percent of their proportionate share.

For generating stations owned by a company formed as a Special Purpose Vehicle, a unit or units identified for captive use, rather than the entire station, must satisfy the ownership and consumption conditions. The draft clarifies that the electricity consumed for captive purposes will be measured with reference to the identified units, and the captive users must hold at least 26 percent of the equity proportional to those units. Illustrations in the draft show how ownership and consumption are to be calculated for both individual users and SPV units.

The draft also provides that consumption by captive users may be either direct or through an energy storage system. Consumption by a subsidiary or holding company of a captive user will be counted as captive use. Ownership is defined to include proprietary interest, control, or equity share capital with voting rights held directly or through holding companies and their subsidiaries. The term 'Special Purpose Vehicle' refers to a legal entity owning, operating, and maintaining a generating station with no other business activity.

Captive status for plants and users located in more than one state will be verified by the Central Electricity Authority as per procedures approved by the Central Government. Stakeholders are requested to provide comments within 30 days of the letter’s issue, by 22 October 2025.