APTEL Upholds MERC Ruling: Banked Energy from Captive Power Plants to Remain Site-Specific

New Delhi, India | November 2024 – In a landmark decision impacting captive power plant (CPP) consumers, the Appellate Tribunal for Electricity (APTEL) has upheld the ruling of the Maharashtra Electricity Regulatory Commission (MERC), affirming that banked energy from CPPs is strictly site-specific and cannot be transferred across multiple consumer premises, even if owned by the same entity.

The ruling was issued in response to an appeal by Maharashtra Seamless Limited (MSL), part of the Jindal Group, which sought to adjust surplus banked energy from its Vile Bhagad unit against the energy bills of its Sukeli unit. MERC denied the request, citing regulatory provisions that treat each unit as an independent consumer under the Electricity Act, 2003. APTEL’s decision reinforces this interpretation, restricting cross-location energy adjustments.

Key Implications for Industrial Consumers

✅ No Cross-Site Energy Banking – Companies must consume banked energy at the site where it was generated, preventing reallocation between facilities.
✅ Strategic Energy Planning – Industrial consumers with multiple units must align power generation and consumption to avoid surplus energy loss.
✅ Increased Focus on Energy Storage – The ruling may encourage investment in Battery Energy Storage Systems (BESS) to mitigate the risks of unused energy.
✅ Regulatory Compliance – The decision clarifies that Open Access permissions remain site-specific, urging industries to adhere strictly to energy banking regulations.

Industry Response and Future Outlook

The decision is expected to prompt industrial consumers to re-evaluate their captive power strategies. Many may opt to consolidate high-energy operations at a single site or explore advanced load management systems to minimize banking needs. The shift towards on-site storage solutions like BESS could also gain momentum as industries seek to enhance energy efficiency and cost optimization.

As India advances its renewable energy and self-sufficiency goals, regulatory clarity on energy banking and Open Access will play a crucial role in shaping industrial energy strategies. This ruling could potentially influence future policy revisions to provide greater flexibility for multi-location industrial consumers.

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