Group captive solar-what are the advantages?
Under the group captive scheme is a unique structure where a developer sets up a power plant for collective use of many industrial consumers who should have 26 per cent equity in the plant and must consume 51 per cent of the power produced.
While industrial consumer sagment is charged higher tariff than the domestic or agriculture consumers, the group captive scheme allows, the consumers pay only the wheeling and banking charges and use the low cost power for their captive usage.
THe group captive scheme in solar projects provides additional advantage, as the consumers can use the electricity generated through solar plant and also are elligible to sale the REC certificates in the open market. This makes a solar project more attractive as the net cash flow includes the revenue from the RECs as well and avoid the expensive electricity purchases from the state utilities.
Group captive scheme is different than the individual captive scheme, where the single user has to consume all the electricity produced by his plant. Recently companies like OPG, Wartsila and KSK Energy setting up plants for a group of industrial consumers. Through group captive arrangement the industries escape paying the cross-subsidy surcharge levied by the state regulators, which results in high tariffs for the industries. The concept o group captive will pick up in the states where industrial tariffs are very high. Besides getting regular, reliable and cheap power, the transmission and distribution losses also come down through group captive power plants because the power is produced locally and consumed locally.