Draft Captive Power Policy for Industrial Sector

Government of UT of Jammu and Kashmir contemplates to create a

healthy and conducive climate for conduct of business and industrial

production so as to attract private investment in the sector. Towards this

objective, it is intended to encourage investment in establishing of captive

power plants in the UT. This will not only enable the industrialists to cater

their load demand as and when required but will also enable them to sell

surplus power in the grid, adding to the total installed capacity through

captive generation and will further strengthen the process of industrial

development. It will also be a step in bridging the gap between supply and

demand as a march towards supplying 24X7 quality power to industrialists.

Accordingly Captive Power Policy for Industrial Sector is drafted as under:

1. Captive Generating Plant (CPP): Captive generating plant means a power

plant set up by any person to generate electricity primarily for his own use.

Any industrialist may construct, maintain or operate a captive generating

plant and dedicated transmission lines within UT of J&K, provided that the

supply of electricity from the captive generating plant through the grid shall

be regulated in the same manner as the generating station of a generating

company. No license shall be required for supply of electricity generated

from a captive generating plant to any other industrial unit within the UT of

J&K in accordance with the provisions of Electricity Act, 2003 and the rules

and regulations made there under and to any consumer subject to the

regulations made under the act. Other provisions of the Electricity Act, 2003

and rules /regulations made there under pertaining to Captive Power Plants

shall also be applicable, together with role of the regulator like CERC as

operative in such processes

2. Right to Open Access: Every person, who has constructed a captive

generating plant and maintains and operates such plant, shall have the

right to open access for the purposes of carrying electricity from his captive

generating plant to the destination of his use. Such open access shall be

subject to availability of adequate transmission and distribution facility as

the case may be and such availability of transmission and distribution

facility shall be determined by the Central Transmission Utility or

Transmission Utility of UT of J&K, as the case may be. Provided further

that any dispute regarding the availability of transmission facility shall be

adjudicated upon by the Appropriate Commission.

3. Eligibility and Ceiling for Captive Power Plants: For establishing

Captive Power Plant, only those industrialists who are establishing their

industries within the UT of J&K would be eligible. Permission for CPP shall

be given to new industries as well as to existing industries who want to

expand and thus bring in additional investments in the UT of Jammu and

Kashmir. They would be permitted to install CPP to fulfill their

requirements and other desirous industrial units within the UT of J&K.

They shall also be allowed to sell power outside J&K. Permission for

additional capacity could also be granted. No wheeling charges shall be

payable in case power is sold within the UT of J&K.

4. Permission for Captive Power Plant:

(i) The capacity of Captive Power Plant (CPP) shall be upto 25 MW. The

permission for establishment of CPP shall be accorded by Jammu

Power Distribution Corporation Ltd./ Kashmir Power Distribution

Corporation Ltd. (JPDCL/KPDCL), with the consent of J&K Power

Corporation Ltd. (JKPCL)

(ii) If the Captive Power Plant owner intends to sell electricity to other

desirous industrial units within the UT of J&K, then subject to the

technical capacity of the transmission/distribution system of

JKPTCL/JPDCL/KPDCL, permission for transmission of power shall

be accorded.

(iii) If the Captive Power Plant owner intends to sell electricity to sister

concern within the UT of J&K, then subject to the technical capacity

of the transmission/distribution system of JKPTCL/JPDCL/KPDCL,

permission for transmission of power shall be accorded.

(iv) In case of excess power with captive power plant consumer, for any

reason, permission would be granted for selling such power to other

desirous industrial units within the UT of J&K and outside J&K.

However, selection of purchaser would be done by CPP owner only.

JPDCL/KPDCL in consultation with J&K Power Corporation Ltd.

shall facilitate such sale subject to technical feasibility.

(v) Jammu and Kashmir Power Corporation Ltd would not be under any

obligation to buy electricity produced by captive power plant.

(vi) Captive Power Plant owner consumer or consumer to whom the

power is being wheeled for use can increase or decrease the contract

demand as per the agreement signed with JPDCL/KPDCL for power

supply.

5. Interconnection Point: Expenses towards connecting the Captive Power

Plant with the system of JKPTCL/JPDCL/KPDCL, shall be borne by the

Captive Power Plant owner. This shall include the interconnecting line to the

nearest substation of the JKPTCL/JPDCL/KPDCL and line bay in the

substation of JKPTCL/JPDCL/KPDCL.

6. Metering Arrangement: If the Captive Power Plant owner runs his captive

power plant parallel to the system of JKPTCL or JPDCL or KPDCL, then

such consumer shall have to install meters at the captive power plant and

at interconnection point, with requisite standard and quality to measure

export and import of energy. Metering arrangements including its

installation, testing, operation maintenance, collection, transportation and

processing of data required for energy exchange shall be governed in

accordance with Central Electricity Authority (Installation and operation of

meters) Regulation 2006, its amendment from time to time and as per the

notification/directives issued by CEA/ JKERC/CERC, as the case may be,

from time to time and as per relevant provisions contained in JKEGC/IEGC

as amended from time to time.

7. Banking facility: The excess energy generated from CPP wheeled to the grid

can be banked for a period not exceeding two month from the date of

wheeling on mutually agreed terms.

8. Grid Discipline: The owners of CPP have to abide by grid discipline as per

JKSERC/CERC Grid Code Regulations and will not be entitled for any

compensation in the event of grid failure due to force-majeure conditions,

fluctuation in voltage, frequency or other reasons. The same condition will

apply for synchronization of CPP with JKPTCL or JPDCL or KPDCL as the

case may be.

9. Submission of application: The parties interested in installation of CPP

shall submit the applications to the concerned Managing Director of ,

JPDCL/KPDCL.

10. Time of completion of the project: The owner of the CPP to whom

approval has been granted by the concerned JPDCL/KPDCL shall

commission the CPP, and synchronize with JKPTCL/JPDCL/KPDCL grid

and put into commercial operation within period as per approved DPR.

11. Agreement: The owner of the CPP to whom sanction has been accorded

has to execute an implementation agreement with JPDCL/KPDCL as the

case may be.

12. Statutory requirements and clearances: For establishment of a Captive

Power Plant, all required statutory clearances would have to be obtained by

the industrialist. Arrangement for land, supply of fuel and water, etc.,

required for establishing Captive Power Plant would also have to be made

by CPP owner.

13. In case of any conflict between above policy and the Electricity Act, 2003

and the rules/ regulations made there under, Electricity Act, 2003, with

latest amendments, if any, shall prevail.

Incentives for Captive Power Plants

1. Permission for Captive Power Plant shall be given to new industries as well as to existing industries who want to expand and thus bring in additional investments in the UT of Jammu and Kashmir.

2. Facilitation for land acquisition.

3. License for Captive Power Plants not required.

4. Right to open access for the purposes of carrying electricity from his captive generating plant to the destination of his use.

5. Sale of power to sister concern and other industrial units

6. No wheeling charges shall be payable in case of sale of power within the UT of J&K.

7. Banking of energy generated from Captive Power Plants allowed for 2 months time period.

8. Any other incentive from GoJ&K/GoI, shall also be applicable.