The Ministry of Power (MoP) has issued the Electricity (Second Amendment) Rules, 2025 on rule 3 of the Electricity Rules, 2005 to clarify the eligibility criteria for captive generating plants.
As per the new rules, a power plant will qualify as captive only if at least 26 per cent of its ownership is held by captive users and not less than 51 per cent of the electricity generated is consumed by them annually. For projects developed through a registered co-operative society or an association of persons, the ownership and consumption conditions must be met collectively, with the latter limited to 110 per cent of each user’s proportionate share. In the case of special purpose vehicles eligibility will be determined at the unit level and not for the generating station as a whole. The rules also allow electricity consumption via energy storage systems and extend captive consumption status to subsidiaries or holding companies of the captive user.