The Ministry of Power said the government has notified the Electricity (Amendment) Rules, 2026, amending Rule 3 of the Electricity Rules, 2005 relating to Captive Generating Plants (CGPs). The amendments aim to remove interpretational ambiguities, improve ease of doing business for industry, and align the captive generation framework with India’s energy transition and industrial growth objectives.

It said captive power generation has been a key enabling provision under the Electricity Act, 2003. The National Electricity Policy, 2005 recognised captive generation as an important mechanism for ensuring reliable and cost-effective electricity supply to industry. Captive power has supported industrial growth by enabling industries to mitigate supply constraints and manage electricity cost volatility. 

It further said Indian industries are increasingly adopting non-fossil fuel based energy to meet sustainability commitments and reduce costs. In this context, enabling a clear, predictable and implementable framework for captive power generation is critical for enhancing industrial competitiveness and supporting India’s long-term economic growth. 

Encouraging generation closer to the point of consumption also helps reduce transmission losses, improve system efficiency and strengthen grid resilience. The amendments therefore seek to provide clarity in the implementation of captive generation provisions while maintaining the statutory safeguards relating to ownership and consumption.