Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Captive definition

What does Captive mean? Captive describes an undertaking owned or controlled by a parent group and established mainly to serve that group’s, or its clients’, needs rather than the wider market. It is a descriptive term used across legal and regulatory contexts; there is no single statutory definition, although “captive insurance undertaking” is defined for prudential purposes under Solvency II (retained in the UK and applied in Ireland). Common usages: - Captive insurer: an insurance company owned by a non‑insurance group to insure that group’s risks; subject to authorisation and solvency rules, with intra‑group, governance and transfer‑pricing considerations. - Captive finance company: a group‑owned lender that finances...

Great Britain private wire ESCo, community energy and captive offtake projects: electricity supply/distribution licensing, PPA structures, exemptions and domestic consumer risks

Published by a LexisNexis Energy expert

Practice notes

Power offtake arrangements

In project-financed power generation schemes, a central document is the power offtake agreement. Commonly termed a ‘power purchase agreement’ or ppa, it is usually a contract between the generator and a licensed electricity supplier acting as offtaker for the plant’s entire output. PPAs of this sort are typically on the supplier’s standard terms, which most funders recognise. For our key resources on PPAs, see: Power purchase agreements and routes to market—overview. These agreements tend to favour the offtaker and securing substantial revisions is generally challenging. An alternative offtake model arises where the generator links directly to one or more local consumers via a ‘private wire’, with those customers purchasing electricity straight from the power station. In broad terms, ‘private wires’ refers to electricity distribution systems not owned or operated by a distribution network operator (DNO) licensed under section 6 of the Electricity Act 1989 (EA 1989). For ease, post‑liberalisation distributors known in the industry as ‘independent’ DNOs or ‘IDNOs’ are treated as DNOs. Private wire arrangements commonly feature in energy services company (ESCo), community energy and captive offtake projects, and from a regulatory...

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Sushma Maharaj

Shakespeare Martineau LLP

Sushma is a highly experienced commercial contracts lawyer advising clients in the energy industry on regulatory and market structures, on how current and future energy sector regulation impact them, and on how to frame their contractual arrangements so as to mitigate risks and liabilities within the regulatory regime that applies to them. She advises on the full range of services arrangements including: concession agreements, connection agreements, supply contracts, operation and maintenance arrangements and asset optimisation services agreements, as well as power purchase agreements (including private wire arrangements and sleeved and synthetic PPAs), and other route to market agreements. Her experience includes a nine month secondment to the Northern Ireland electricity regulator, OFREG; a three month secondment to British Energy and a seven month secondment to Smartest Energy....

Web page updated on 21/05/2026

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