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The Group Captive System: The idea!

About six months back, when I visited the headquarters of the Tamil Nadu Generation and Distribution Company (TANGEDCO), I met one of the Executive Engineers in their renewables section.

 

In these days of Covid, you hardly ever visit the DisCom headquarters! When I did visit and met this person, our discussion meandered towards Group Captive Systems. She promptly said, as all TANGEDCO people say, there is nothing called as Group Captive. It does not exist.

 

She is right, after all, in the past tense!

 

True, there was nothing called as Group Captive!

 

It was the Electricity Act 2003 / 2005 that introduced the concept called Group Captive. Until then, there was nothing like that.

 

It was a new idea formulated by visionary individuals to encourage consumers to start installing new power plants to meet their own power needs, be they thermal or wind or biomass or hydro. We need to read the history at that time in order to understand what they were trying to do!

 

Prior to 1990, power industry was a predominantly government enterprise. During liberalization, power generation was privatized, so that, private companies could invest in power generation, but they had to supply power only to the distribution companies. These were again owned by government.

 

The Electricity Act tried to open up the entire power industry to the private players. Therefore, clear rules had to be framed to create a level playing field. Every interaction between the stake holders in the electricity business has to be defined and rules clearly laid down.

 

While doing so, in order to encourage private participation in power sector, they introduced a captive system in the first place.

 

I still remember some of the early hoardings put up by Tamil Nadu Electricity Board, saying in bold letters, that you put up the power plant for your own use anywhere in Tamil Nadu and transmit it to your factory / industry FOR FREE!

 

No transmission or wheeling charges if you are putting up a power plant to consume in your own industry!

 

(To be continued in next week….)


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