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| Captive Facility |
As per The Electricity Act 2003, “Captive generating plant” means a power plant set up by any person to generate electricity primarily for his own use and includes a power plant set up by any co-operative society or association of persons for generating electricity primarily for use of members of such cooperative society or association; |
| Primary Conditions: |
- Not less than twenty six percent of the ownership is held by the captive user(s), and
- Not less than fifty one percent of the aggregate electricity generated in such plant, determined on an annual basis, is consumed for the captive use
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On the face of it, it seems complicated and requires substantial initial investments!! But if you go through The Electricity Rules 2005, it is not that complicated and does not require substantial investments as it appears.
Here are the simple calculations to find out minimum investment, in terms of months of power bill, required to avail the waiver of cross subsidy surcharge:
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- Let us say you want to purchase on the average 1.6 MU (Million Units) per year at the rate of Rs.7.00/unit (at plant).
- One MW Solar power plant can produce on the average 1.6 MU/year.
- Let us say the capital expenditure of the 1MW solar power plant is Rs.7.0 Crores. Out of this 20% would be equity and the remaining debt.
- Hence total equity = 7.0*20% = 1.4 Crores
- Out of total equity, minimum equity from your end to be eligible for captive = 26%
- Hence your minimum investment = 1.4*26%=0.364Crores=36.4 Lakhs
- Total Power bill/year = 1.6*7.00 =11.2 Million = 1.12 Crores
- Average monthly power bill = 1.12 Cr/12 = 9.33 lakhs
- Hence the investment in terms of no. of months of power bills = 36.40/9.33= 3.9 months.
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Hence if you can invest 4 months’ power bill one time, you can avail waiver of cross subsidy surcharge forever with assured power supply along with hedging on power prices (through equity investment)!!!
Moreover the power bills are increasing substantially year after year with power cuts and power holidays. Here is the AP Power Tariff 2013-14, to just get an idea.
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Captive Options |
| The Electricity Rules 2005 clearly explains the captive options. |
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You can use Captive Option on your own if you are using 1MW or more per year on your own.
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You can form Co-Operative Society with other consumers. Then the Captive rules are applicable to the Co-operative society, not to you as member directly.
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You can form an association with other people or entities. You need to invest and consume power according to your share in the association.
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We can build customized power units as per rules and your requirements (capacity).
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