Why do factories build their own power plants?
Because an hour without electricity can cost more than a year of fuel. When the grid is unreliable or expensive, industry generates on site.
Self-generation, also called captive power or autogeneración, means a company produces electricity for its own use. Mines far from the grid have always done it. Cement plants, refineries and cold-storage operators do it when outages become frequent, and data centres now do it when the local utility cannot connect them fast enough.
The equipment depends on the fuel available. Diesel generators are quick to install and costly to run. Gas engines and turbines are cheaper per unit of power where there is a pipeline. Rooftop and ground-mounted solar cut the daytime bill but need batteries or a generator behind them.
The regulatory question is what happens to surplus power. Some countries let self-generators sell it to the grid or to a neighbour. Others forbid it or pay very little. Those rules decide whether an industrial park installs just enough capacity for itself or builds a small power business.
- Also called
- Captive power, behind-the-meter generation, autogeneración
- Common fuels
- Diesel, natural gas, solar with storage
Explainers describe how things generally work. They are not advice for a specific project or country. See our editorial policy.