The Ministry of Power on Saturday announced amendments to electricity rules to simplify the framework for captive power generation, particularly for industries, in line with India’s energy transition goals.
The changes have been notified under the Electricity (Amendment) Rules, 2026, following consultations with stakeholders.
According to the ministry, the amendments aim to remove ambiguities in existing regulations, improve ease of doing business, and align captive generation policies with India’s industrial growth and clean energy objectives.
The ministry said generating electricity closer to the point of consumption can reduce transmission losses, improve system efficiency, and strengthen grid resilience.
The revised rules clarify ownership provisions and simplify guidelines for group captive arrangements. They also introduce a clearer mechanism to verify captive status to reduce regulatory disputes and improve compliance.
Under the amendments, the definition of ownership has been expanded to include subsidiaries, holding companies, and other subsidiaries of a holding company involved in establishing a captive generating plant. The ministry said this reflects modern corporate structures where energy assets are often developed through group entities or special purpose vehicles.
A new provision prevents distribution licensees from levying charges on captive consumers while verification of captive status is pending.
If captive users submit the required declaration as per procedures issued by the National Load Dispatch Centre for inter-state cases or by the relevant state nodal agency for intra-state cases, cross-subsidy surcharge and additional surcharge will not be levied.
However, if a power plant fails to qualify as a captive generating plant after verification, applicable charges will be payable along with carrying costs under the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022.
The ministry said clearer rules will help industries adopt non-fossil fuel energy sources, reduce costs, and strengthen competitiveness.