Page 50 - Policy Economic Report - March 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

“With OALP Round-XI now live, we unlock vast frontiers beneath our land and seas—powering growth,
resilience, and self-reliance. Round-X (25 blocks; 182,589 sq km) and Round-XI (80,228 sq km) are now
on offer - together unlocking 262,817 sq km for exploration,” Puri said in a post on X.

Government amends Electricity Rules to strengthen captive power framework and support industrial
competitiveness

Government of India 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.

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.

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.

The Electricity (Amendment) Rules, 2026 have been introduced to provide greater clarity and flexibility
in the framework governing captive power plants so that industries can more easily generate electricity
for their own consumption. The amendments seek to align the captive generation regime with modern
corporate structures and evolving industrial energy needs, particularly as companies increasingly invest
in non-fossil fuel based captive power projects. By clarifying ownership provisions, simplifying rules for
group captive arrangements, and establishing a clear verification mechanism, the amendments aim to
reduce regulatory ambiguity and disputes. Many provisions in the Rules have been simplified for ease of
compliance. New provision has been added to avoid imposition of charges on the captive consumers by
the Distribution licensees pending verification of the captive status. Overall, the amendments are
expected to promote ease of doing business, enable industries to access reliable and cost-competitive
electricity through captive generation, reduce regulatory ambiguities and disputes, and encourage
greater investment in captive and non-fossil fuel based energy projects.

The amendments have been finalised after extensive stakeholder consultations.

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