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Captive power is captivating for corporates

Companies are increasingly looking to set up their own capacities

R N Bhaskar

Mumbai : Almost 15 years ago, three large companies in Gujarat decided to produce the electricity they needed for their regular operations. All the three belong to the chemical process industry where power is not only a critical factor, but uninterrupted-quality-power becomes the determining factor between losses and profits – consequently, extinction and survival.

They knew that the power situation was unlikely to improve soon. The writing on the wall was clear even 15 years ago. The state was incapable of generating enough power. Moreover, politics and opportunism would inevitably encourage (i) promises of free power, and (ii) power theft and uncollected bills, both of which would adversely affect the quality of power supplied to the organised industry. So, together they set up Gujarat Industrial Power Company Ltd (GIPCL).

True, cement and some large textile plants too had embarked on captive power generation in the past, but these were totally captive. This was the first attempt at producing power through an ‘industry-consortium’. Today, GIPCL remains one of the most efficient producers of thermal power in the country and is extremely profitable.

Naturally enough, captive power production has found many votaries: This can be gleaned from the fact that a substantial power generation capacity has come up by way of captive generation capacity in the country (see table: Captive power by industry).