Captive & Group Captive Power Plants under Open Access
Overview
Open Access (OA) is a mechanism that allows large electricity consumers (typically those with demand greater than 1 MW) to buy power directly from independent power producers, such as solar or wind developers. Instead of relying solely on local DISCOMs, consumers can procure energy at competitive prices from the open market.
This model helps industries and commercial establishments lower their energy costs, hedge against rising grid tariffs, and gain access to renewable energy sources for achieving sustainability goals. The electricity is "wheeled" or transmitted through the existing transmission grid, ensuring reliable delivery to the consumer's location.
Structure & Legal Requirements
Governed by Electricity Rules, 2005 – Rule 3 (under Electricity Act, 2003)
Captive Power Plant (Single Entity)
- Consumer must own ≥26% equity in the power plant
- Must consume ≥51% of the generated power annually
Group Captive Power Plant (Multiple Entities)
- One or more consumers jointly own ≥26% equity
- Combined consumption must be ≥51% of total generation
- Each consumer must have ≥1 MW contract demand (varies by state)
Commercial Benefits
| Item | Captive / Group Captive | Normal Grid Tariff |
|---|---|---|
| Energy Cost | ₹3.5 – ₹4.5 / unit (solar/wind mix) | ₹7 – ₹12 / unit |
| Savings | 30–50% | — |
| Tariff Stability | 25 years (PPA) | DISCOM tariffs escalate annually |
Suitable Consumers
Key Setup Options
| Model | Description | Ownership |
|---|---|---|
| Solar Captive | Ground-mounted 1 MW+ plant under OA | Consumer |
| Wind Captive | Suitable in windy states (e.g., TN, MH, KA) | Consumer |
| Hybrid Captive | Wind + solar mix for 24×7 supply | Consumer / Group |
Process Flow
Form SPV (Special Purpose Vehicle) for plant
Sign Shareholder Agreement & PPA
Apply for Open Access & Connectivity
Plant constructed (3–6 months typical)
Power wheeled to consumer through state grid
Monthly billing via SLDC / utility
Financial Snapshot — Illustrative (1 MW Solar Captive)
1 MW Solar Captive — Key Numbers
| Project Cost | ₹4.5 Cr |
| Equity Needed (26%) | ₹1.17 Cr |
| Tariff | ₹4 / unit |
| Annual Generation | ~15 lakh units |
| Annual Savings | ₹60–75 lakh |
| Payback | 3–4 years |
Captive / Group Captive Solar Plant under OPEX Model
Under the OPEX (Pay-as-you-go) model, a solar developer invests, installs, operates, and maintains the solar power plant. The consumer pays per unit of electricity (₹/kWh) through a long-term Power Purchase Agreement (PPA) — usually for 15–25 years.
What Makes It "Captive" Under OPEX?
| Requirement | Captive / Group Captive Rule |
|---|---|
| Equity Ownership | Consumer must own ≥26% of the power plant / SPV |
| Power Consumption | Must consume ≥51% of total power generated annually |
| Minimum Load | Typically ≥1 MW per consumer (varies by state) |
In a Group Captive OPEX model, the developer funds the project but gives 26% equity stake to the consumer(s) at minimal or no cost, to meet legal compliance. Consumers pay only for energy used (e.g., ₹3.5–₹4.5/unit).
Hybrid OPEX + Captive Structure
| Stakeholder | Role |
|---|---|
| Developer (RESCO / OPEX partner) | Invests CapEx (~₹4–5 Cr/MW), builds & operates plant |
| Consumer (C&I Client) | Takes 26% stake in SPV & signs long-term PPA |
| SPV (Special Purpose Vehicle) | Owns the asset, enters into Open Access agreements |
Commercial Snapshot — 1 MW Solar (Group Captive - OPEX)
Group Captive OPEX — Key Numbers
| Project Cost | ₹4.5 Cr |
| Equity (26%) | ₹1.17 Cr (can be provided by developer on behalf of consumer) |
| PPA Rate | ₹3.5–₹4.5 / kWh |
| DISCOM Tariff | ₹8–₹12 / kWh |
| Annual Generation | ~15 lakh units |
| Savings | ₹60 lakh – ₹1 Cr / year |
| Tenure | 15–25 years |
No CapEx burden on consumer + long-term energy cost savings.
Benefits to Consumer
Key Considerations
| Aspect | Notes |
|---|---|
| Equity | Some developers pass 26% stake to consumers at no cost or nominal share value |
| Compliance Risk | If consumer does not consume 51%, benefits are lost (must be monitored) |
| OA Charges | Transmission, wheeling, SLDC, banking, etc. – vary by state |
| Agreement | Long-term PPA + Shareholding Agreement mandatory |