Huge finances are required in setting up of central power plants and for providing infrastructure for the transmission and distribution of generated electric power. Because of fi­nancial constraints, the central and state governments, the various state electricity boards, and the various public sector organi­zations (like NTPC, NHPC, Nuclear Power Corporations) do not find them in a position to undertake the setting up of the large power plants in order to meet the country needs in this sector.

Because of this, the private sector participation in the energy management of the country is gaining popularity. In many advanced countries, the energy sector is mainly in the hands of private sector. Such power through the national grid will be subjected to specified grid conditions. Alternatively, the private sector can lay its own transmission lines.

Captive power refers to generation from a unit set up by industry for its exclusive consumption. The estimates on captive power capacity in the country vary with the Central Elec­tricity Authority (CEA) putting the figure at about 11, 600 MW while industry experts feel that it is much more, about 20,000 MW.


Industrial sector is one of the largest consumers of elec­trical energy in India. However, a number of industries are now increasingly relying on their own generation (captive and co-generation) rather than on grid supply, primarily for the following reasons:

1. Non-availability of adequate grid supply.

2. Poor quality and reliability of grid supply.

3. High tariff as a result of heavy cross-subsidization.


Need for Captive Power Plants (C.P.P.):

i. Huge gap between the demand and supply from central power stations.

ii. Frequent long and seasonal power cuts.

iii. Frequent increase in the power tariffs by the utilities.


Advantages of Captive Power Plants (C.P.P.):

a. The overall cost per unit may be low.

b. No energy theft.

c. No infrastructure (transmission and distribution of power).


d. No transmission losses.

Various Systems of Captive Power Generation:

Captive power generation has the following options:

1. Power generation by an industry for:


(a) Its use only.

(b) Its use as well as supply of excess power to the neighbouring industry.

(c) Its use and supply of excess power to the utility.

(d) Its use and supply of excess power to the utility as well as the neighbouring industry.

2. Captive power plants set up by a co-operative society of companies for their own use.

3. Captive power plant set up by a private generating company for supply of power to the neighbouring industries.

Types of Captive Power Plants:

The captive power plants may be steam, diesel, gas, cogeneration, hydro plants.

1. Steam Power Plants:

This option is suitable for heavy industries such as steel, aluminium etc., which already have access to coal and the required infrastructure for purchasing and storing coal. Generally such captive power plants have generating capacity of about 100 MW or more. These plants are usually condensing type. Examples are- 247.5 MW coal based Visakhapatnam steel plant in Andhra Pradesh; 302 MW coal based Bokaro steel plant owned by TISCO, in Bihar and 210 MW coal based captive power plant at Jamshedpur (Bihar).

A small industry (power, textile, plastic, breweries etc.) has capacities 1 to 25 MW and the power plants are usually non-condensing type.

Many sugar industries in A.P, Bihar, Gujarat, Haryana, Karnataka, MP, Maharashtra, Punjab, UP etc. use “bagasse (waste dry sugarcane left after the cane juice has been extracted)” as the fuel for their captive power plants.

2. Diesel Power Plants:

Such power plants are by far the largest number of captive power plants. These are also used as peak load and standby plants. They have the capacities of 1 to 10 MW (sometimes up to 30 MW).

They are more popular in the states of AP, Haryana, and Karnataka. MP, Tamil Nadu. Some typical diesel engine captive power plants are – IOC (Panipat in Haryana)—75 MW; Rajshree Cement (Gulbarga in Karnataka)—42 MW; TISCO (Jamshedpur in Bihar)—30 MW, India Cement (Cuddapah in AP)—30 MW; Rayalseema Alkalies (Kurnool in AP)—35 MW; Hindustan Zinc Limited, HZL (in Visakhapatnam in AP)—10 MW.

3. Gas Turbine Power Plants:

Such captive power plants are popular with medium scale and large industries. Some industries, like, petrochemicals have easy access to gas and liquid fuels and, therefore, prefer captive plants using gas turbines. Also useful in combined power plants. Some typical gas-based captive power plants are – IOC (Jawaharnagar in Gujarat)—95 MW; Maruti Udyog (Gurgaon in Haryana)—60 MW; ONGC (Hazira in Gujarat)-—59 MW; Reliance Industries (Narodan in Gujarat)—47.5 MW; ONGC (Gandhar in Gujarat)—31 MW; Essar Steels (Hazira in Gujarat)—30 MW; Nagarjuna Fertilizers (Kakinda in AP)—18 MW.

4. Co-Generation Plants:

Co-generation produces two or more types of useful energy e.g., electrical energy and steam. Though the initial cost of a cogeneration plant is more than that of an electric power plant, but such plant has very high efficiency and leads to overall economy and conservation of fuel. A cogeneration plant may be steam- gas turbine plant with waste heat boiler, combined cycle cogeneration plant, biomass fuel plant, diesel engine plant etc. Cogeneration plants produce lesser pollution than other plants.

Many state government and other organisations provide incentive for installation of cogeneration plants. Arvind Mills (Ahmedabad) has a combined cycle cogeneration captive power plant. It has two 27 MW gas turbines. TASL (Tamil Nadu) has a 28 MW cogeneration captive power plant. It can be operated on bagasse as well lignite.

5. Mini Hydroelectric Plant:

Mini Hydroelectric Plant can be a very attractive option for industries located near a site suitable for such a plant. A 12 MW mini hydro plant in Kerala and a 10 MW mini hydro plant in Karnataka are typical hydro captive power plants.

6. Captive Power Plants for Rural India:

It is well known that the economy of India is an agriculture-based. About 70 per cent of GDP comes from agricultural sector. So, this sector needs special attention for the economic growth of the country. For this, the energy requirements of this sector must be met on priority basis.

However, a major portion of power generated is being consumed by the urban and industrial consumers, and there is a perennial shortage of power in the agriculture sector. This problem, however, can be overcome by installing small rural based captive power plants, where the energy source will be biomass, in the form of agri-residues. Such small captive power plants can meet the power needs of 25 to 40 nearby villages. This will solve the dual problem of disposal of agro-residues and shortage of power in rural area.

Agri-waste, the cause of smoky clouds, can enlighten the gloomy rural area.

Based on the fuel type used for captive power generation about 45% of power generated is from steam, 40% from diesel and 15% from Gas/Naphtha.

Captive contribution by various industry types is as follows: