<p>Bengaluru: The number of industries shifting to the use of captive power generation by setting up their own power plants has more than doubled from 203 in 2020-21 to 498 by 2024-25, according to data available with Bescom.</p>.<p>The energy consumed through captive generation has also increased by 1,600 MUs during this period.</p>.<p>Captive generation refers to industries setting up their own power plants to meet their energy demand and moving away from dependence on Bescom.</p>.<p>Experts said the uncertainty of tariff had pushed many of them to opt for captive generation.</p>.<p>Recently, the Karnataka Electricity Regulatory Commission (KERC) increased the tariff for industries and commercial establishments by revising the multi-year order it had passed in March 2025. </p>.<p>“Multi-year orders are designed to ensure certainty of price. It helps industries determine the input cost to calculate pricing for products. The uncertainty in tariff results in losses. Hence, many of them choose captive production,” said M G Prabhakar, energy expert and former advisory council member, Karnataka Electricity Regulatory Commission (KERC).</p>.<p>An industrialist from Peenya industrial area said that the trend is now picking up and more and more industries are expected to transition to captive energy generation. </p>.<p>“As industrialists, for us certainty in operating cost is crucial. That decides our profits. If the power price is fluctuating, even a small increase will have a big effect on us. Hence, many of us are exploring alternative options available,” said Sudhakar M who runs a polymer industry.</p>.<p>However, the norms to set up captive generation plants are stringent, limiting the number of industries adopting it, the industrialists said.</p>.<p>“Only big industries with a capacity of more than 500kW are allowed to instal a captive generation plant. As a result, many small industries are not able to set up plants. We have written to the energy department to allow smaller industries to form groups and <br>set up plants. If this relaxation is provided, more industries will shift to captive generation,” said Shiva Kumar R from <br>Peenya Industries Association.</p>.<p>Better quality power without unscheduled disruptions added to the benefits, the industrialists said. Experts said industries could recover the capital investment within five to eight years, making captive generation a good long-term solution.</p>.<p>That apart, many industries are opting to purchase energy from open access generators.</p>.<p>While the number of industries moving away from the grid is not very high, industry experts said this trend could pick up soon.</p>.<p>While acknowledging that more industries were shifting to captive power, the government is also trying to retain consumers, senior Bescom officials said.</p>.<p>“We are offering the HT industrial consumers the discounted energy rate scheme (DERS) to retain them. Under this, they will be charged less for consumption beyond their base consumption. This way, we are trying to retain them,” a senior official explained to DH. </p>.<p>The official said the numbers (of industries switching to captive power) were still low and the transition wasn’t affecting Bescom’s operations.</p>
<p>Bengaluru: The number of industries shifting to the use of captive power generation by setting up their own power plants has more than doubled from 203 in 2020-21 to 498 by 2024-25, according to data available with Bescom.</p>.<p>The energy consumed through captive generation has also increased by 1,600 MUs during this period.</p>.<p>Captive generation refers to industries setting up their own power plants to meet their energy demand and moving away from dependence on Bescom.</p>.<p>Experts said the uncertainty of tariff had pushed many of them to opt for captive generation.</p>.<p>Recently, the Karnataka Electricity Regulatory Commission (KERC) increased the tariff for industries and commercial establishments by revising the multi-year order it had passed in March 2025. </p>.<p>“Multi-year orders are designed to ensure certainty of price. It helps industries determine the input cost to calculate pricing for products. The uncertainty in tariff results in losses. Hence, many of them choose captive production,” said M G Prabhakar, energy expert and former advisory council member, Karnataka Electricity Regulatory Commission (KERC).</p>.<p>An industrialist from Peenya industrial area said that the trend is now picking up and more and more industries are expected to transition to captive energy generation. </p>.<p>“As industrialists, for us certainty in operating cost is crucial. That decides our profits. If the power price is fluctuating, even a small increase will have a big effect on us. Hence, many of us are exploring alternative options available,” said Sudhakar M who runs a polymer industry.</p>.<p>However, the norms to set up captive generation plants are stringent, limiting the number of industries adopting it, the industrialists said.</p>.<p>“Only big industries with a capacity of more than 500kW are allowed to instal a captive generation plant. As a result, many small industries are not able to set up plants. We have written to the energy department to allow smaller industries to form groups and <br>set up plants. If this relaxation is provided, more industries will shift to captive generation,” said Shiva Kumar R from <br>Peenya Industries Association.</p>.<p>Better quality power without unscheduled disruptions added to the benefits, the industrialists said. Experts said industries could recover the capital investment within five to eight years, making captive generation a good long-term solution.</p>.<p>That apart, many industries are opting to purchase energy from open access generators.</p>.<p>While the number of industries moving away from the grid is not very high, industry experts said this trend could pick up soon.</p>.<p>While acknowledging that more industries were shifting to captive power, the government is also trying to retain consumers, senior Bescom officials said.</p>.<p>“We are offering the HT industrial consumers the discounted energy rate scheme (DERS) to retain them. Under this, they will be charged less for consumption beyond their base consumption. This way, we are trying to retain them,” a senior official explained to DH. </p>.<p>The official said the numbers (of industries switching to captive power) were still low and the transition wasn’t affecting Bescom’s operations.</p>
