Group captive or open access? They are not alternatives.
One is how the electricity reaches you. The other decides which charges you pay when it arrives — and whether the two heaviest ones apply at all.
These two get put on a slide as a choice, and they are not one. Open access is the route the electricity takes to reach you. Group captive is the ownership structure that decides which charges you pay when it gets there. Almost every group captive project in India is also an open access project.
Getting the distinction straight is worth money, because the question is never “which one?” — it is “do we bother with the equity structure on top of the wheeling arrangement?”
Open access: the route
Your plant is somewhere else — our solar park, typically — and the power reaches your factory over the state network. You apply for open access, the power is scheduled, and you pay the network for carrying it.
What you pay on top of the generation tariff:
- Wheeling and transmission charges — the cost of using the distribution and transmission systems.
- Losses — a percentage of the energy, absorbed in transit.
- Cross-subsidy surcharge — a levy that compensates the DISCOM for the subsidised customer you have stopped funding.
- Additional surcharge — charged where the DISCOM argues it has stranded capacity contracted on your behalf.
The last two are the large ones, and they are the reason a headline generation tariff and a landed cost can be very different numbers.
Group captive: the structure
Group captive is defined by the Electricity Act 2003 and the Electricity Rules 2005. If the consumers of the power collectively hold at least 26% of the equity in the generating company, and collectively consume at least 51% of what it generates, measured annually, the plant is captive to them.
You still wheel the power. You still pay wheeling, transmission and losses. You have simply changed what you are, in regulatory terms, from a third-party buyer into an owner consuming your own generation.
So which do you need?
If your load is large and the surcharges in your state are heavy, the equity structure usually pays for itself many times over. If your consumption is modest, or your state's surcharges are light, straight third-party open access is simpler and the saving may be adequate.
The structure is not free. It brings an equity investment, a shareholders' agreement, an annual compliance test and a genuine consequence for failing it.
The test that catches people
The 26% is a one-time act. The 51% is an annual obligation, and it is where projects fail — usually years later, quietly.
A plant sized against today's consumption fails the moment a line shuts, a shift pattern changes, a unit is sold, or the group restructures. Consumption falls, generation does not, and the share drops below the threshold. The test does not care why. In some states the surcharges can be recovered retrospectively — which can claw back the saving that justified the project in the first place.
The defence is sizing. A group captive plant should be sized against real consumption with headroom, not against the maximum the site could theoretically absorb in a good year.
What to establish before committing
- Your state's actual surcharge levels and whether recent orders have moved them. This is the single biggest variable in the answer.
- Banking rules. Whether surplus can be banked, for how long, at what charge, and whether it lapses at year end. Banking terms have tightened in several states and can change the economics materially.
- Your consumption trajectory across the group, honestly — including the sites you might close.
- Whether the exemption survives for the full contract term under current policy direction, and who carries the risk if it does not.
Test your numbers against both thresholds — the eligibility checker on our project development page shows the largest plant that still clears the 51% test on your consumption.
Thresholds are set by the Electricity Act 2003 and the Electricity Rules 2005; state commissions apply them through their own open access regulations, and the detail of how generation and consumption are measured varies. Surcharge levels, banking terms and exemptions are state-specific and change with each tariff order. This is background, not an eligibility opinion — we confirm the position against the applicable SERC order before quoting.
Thirty-second version: run your own numbers through the eligibility checker.
Take the twenty-question checklist with you. Printable, one page per section, and nothing in it is specific to Vibgyor — run it against us too.
Send us twelve months of bills.
Send twelve months of bills and we will tell you whether equity in the plant would pay for itself at your consumption. The analysis comes back free, with no commitment.