Benefits of Captive Power plants
Many industrial users, such as mines, steel mills, refineries, fertiliser plants, etc. have significant power requirements and in developing economies, the national utilities often do not have the capacity to supply power on a stable and reliable basis. Indeed, in countries facing power shortages, it is often the more intensive industrial users that are not supplied during periods of load-shedding.
Commercial reasons for developing a captive power plant generally centre on a need for a high level of control over the development, construction and operation of the power plant, where these needs cannot be met reliably from the grid, either because new generation capacity is needed anyway or because of doubts about the physical condition or management of the existing system. A captive power plant provides these customers with security of power supply, coupled with greater control of increases and decreases in generating capacity, to align with their production cycles.
Technical reasons for developing a captive power plant can also include the offtaker’s need for other products that can be provided by a cogeneration plant, and a remote site location where a grid connection is not feasible.
For example, cogeneration plants can provide heat to the offtaker in the form of steam, which is required by petrochemical refineries and paper mills. Plants can also be configured to provide other products, such as water desalination to a dedicated offtaker. Another example is a captive power project supplying a bottling plant, where the carbon dioxide produced by the power plant was purified to food grade and then used to produce sparkling drinks that were then bottled by the plant.