Group Captive PPA: A Smarter Route to Green Energy for Indian Industry

With increasing demand for affordable and secure green energy, numerous Indian companies are shifting to alternative procurement structures, which do not limit themselves to the traditional third-party power purchase agreements. Among these, the Group Captive PPA stands out as a strategic choice—offering both regulatory benefits and long-term savings. This model gives a clear advantage to commercial and industrial consumers with sustainability objectives who do not want to reduce the efficiency of their operations. 

What is a Group Captive PPA? 

Group Captive Power Purchase Agreement is a renewable energy model regulated under the Electricity Act, 2003 and facilitated under open access regulations in most of the states. Under this arrangement, several consumers invest in a renewable energy project through 

• Owning a minimum of 26 percent in the power-generating company (usually formed in the form of an SPV). 

•  Using at least 51 percent of the generated power. 

 This two-part requirement of ownership and usage renders the project as group captive and entitles the involved consumers to some regulatory exemptions, including cross-subsidy and other surcharge waivers (depending on state regulations). 

 Unlike third-party PPAs, where the developer owns the project and sells power to consumers, the Group Captive PPA structure allows consumers to become co-owners of the asset and gain better long-term control over their energy source. 

Why Choose a Group Captive PPA? 

For large-scale energy consumers, the Group Captive PPA model offers several clear, tangible benefits: 

•  Saving Power Charges: Group captive models can save on power charges by removing some of the open access surcharges and by matching generation and consumption, thereby providing lower landed tariffs than grid power or third-party PPAs. 

•  Tariff Stability: The existence of long-term contracts and fixed costs allows companies to protect themselves against the increase of grid tariffs and fluctuations of fuel prices. 

•  Regulatory Compatibility: Group captive consumption is considered self-sourced renewable energy in most states to assist companies in achieving Renewable Purchase Obligations (RPOs) and fulfilling ESG commitments. 

•  Higher Transparency and Accountability: Consumers, being the equity holders, have a transparent view of the project performance, operation, and costs, and thus, there is a greater alignment of interests. 

 These benefits make the Group Captive PPA particularly suitable for sectors with high energy demands, such as manufacturing, logistics, pharmaceuticals, and data centers. 

Important Things to Consider Before Opting In

While the advantages are significant, entering into a Group Captive PPA requires careful structuring and compliance. Consumers must make certain: 

•  The project is scaled to suit their yearly energy requirements. 

•  The lowest requirements of 26 percent equity and 51 percent consumption are kept up. 

•  All approvals of the open access regime are acquired and retained. 

 Because the rules pertaining to open access and group captives’ eligibility differ in each state in India, it is important to consult a knowledgeable renewable energy partner to help you meet the regulations and maximize returns. 

How Does Enernew Support Group Captive PPA Execution?

 Enernew is a company dedicated to making the switch to clean energy easy for commercial and industrial customers. Our team handles the end-to-end implementation of Group Captive PPAs—from identifying the right project to structuring equity ownership, securing regulatory approvals, and overseeing ongoing energy supply. All projects are aligned to the consumption profile, financial objectives, and sustainability roadmap of our client. By having Enernew as your energy partner, you have a partner you can trust with the aim of delivering long-term savings, energy security, and complete regulatory compliance. 

Is a Group Captive PPA Right for You? 

If your business consumes substantial electricity and is seeking predictable, low-cost, and sustainable power, a Group Captive PPA could be the ideal solution. It will lead to lower energy bills and enable you to contribute to your ESG goals and make your brand a participant in the Indian clean energy transition. 

Connect with Enernew today to explore how a Group Captive PPA can align with your business goals. We will take you through the entire process, from consultation to commissioning, and power your future in an efficient and sustainable manner.