What is captive power generation?

What is a captive power plant?

According to Nigerian Electricity Regulatory Commission, “a captive power plant is a power plant of over 1MW in capacity set-up by the generator for own use”.

Captive Power Generation can be defined as the generation of electricity exceeding 1 MW for the purpose of consumption by the generator, and which is consumed by the generator itself, and not sold to a third-party.

In Nigeria, a total capacity of 1300MW of captive power permits have been issued. No permits or licenses have been issued for renewable captive power (or not registered as such).

Here are some other points to note about captive power generation and captive power plants:

1. Although the location where a captive power plant is deployed may be grid-connected, the electricity generated is not sent to the national grid, thereby making captive power plants, off-grid.

2. In a captive power plant, production and consumption occur together at the source; i.e. 100% of the power generated is utilized by the owner/producer of the plant.

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3. A captive plant could be fully financed by the user of the electricity, the developers of the project or a third party financier.

4. Captive power plants are becoming increasingly popular among industrial complexes who require constant energy to power their operations. Captive power plants can be in schools, hotels, offices & industrial companies.

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1 Comment

  • Akshat Kapoor

    Captive power generation refers to the production of electricity by an organization for its own consumption, typically on-site. This self-sufficiency in power generation allows businesses to secure a reliable and uninterrupted energy supply, independent of the external grid. Companies often invest in captive power plants to mitigate the risks associated with power outages, fluctuating energy costs, and to enhance their overall energy resilience. This approach not only ensures operational continuity but also provides flexibility in adopting cleaner and more sustainable energy sources, aligning with the growing global emphasis on eco-friendly practices in the business sector.

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