An independent power producer (IPP) or non-utility generator (NUG) is an

entity An entity is something that Existence, exists as itself. It does not need to be of material existence. In particular, abstractions and legal fictions are usually regarded as entities. In general, there is also no presumption that an entity is Lif ...

that is not a

public utility A public utility company (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and ...

but owns facilities to generate electric power for sale to

utilities A public utility company (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and r ...

and end users. NUGs may be privately held facilities, corporations, cooperatives such as rural solar or wind energy producers, and non-energy industrial concerns capable of feeding excess energy into the system. An independent water and power producer (IWPP) is similar to an IPP, but with a unified process to also output usable treated water.

Economic situation

For most IPPs, particularly in the renewable energy industry, a

feed-in tariff A feed-in tariff (FIT, FiT, standard offer contract,Couture, T., Cory, K., Kreycik, C., Williams, E., (2010)Policymaker's Guide to Feed-in Tariff Policy Design National Renewable Energy Laboratory, U.S. Dept. of Energy advanced renewable tariff, ...

or power purchase agreement provides a long-term price guarantee. IPPs have been successful in driving the electricity sector's transition to renewables globally, owning the majority of the currently operating renewable energy generation capacity.

Germany

Rare in Germany for decades, the IPP business model has grown more common since the EEG (for renewable energy). Success in the approach depends on finding a partner for distributing the produced energy to the customer.

Canada

Electricity regulation in Canada is governed at the provincial level, and there are differences between the provinces for how IPPs are integrated into the electric system. In 2002, the government of British Columbia stipulated that new clean renewable energy generation in the province would be developed by independent power producers (IPPs) not

BC Hydro The British Columbia Hydro and Power Authority, trade name, operating as BC Hydro, is a Canadian electric utility in the province of British Columbia. It is the main electricity distributor, serving more than 4 million customers in most areas, wi ...

, save for large hydro-electric facilities. IPPs now produce a significant proportion of the power generated in BC.

Taiwan

Taiwan's electricity market was liberalized in January 1995. Nine IPP companies are currently operating in Taiwan.

United States

NUGs were rare before the enactment of the US Public Utility Regulatory Policies Act (PURPA) of 1978. The few existing NUGs were seldom able to distribute power, as the cost of building the conveyance infrastructure was prohibitive. Public utilities generated power and owned the generating facilities, the transmission lines, and the local distribution-delivery systems. PURPA, however, established a class of non‐utility generators, called Qualifying Facilities (QFs), that were permitted to produce power for resale. PURPA was intended to reduce domestic dependence on foreign energy, to encourage energy conservation, and to reduce the ability of electric utilities to abuse the purchase of power from QFs. A QF is defined as a generating facility that produces electricity and another form of useful thermal energy through the sequential use of energy, and meets certain ownership, operating, and efficiency criteria established by the Federal Energy Regulatory Commission (FERC). Section 210 of PURPA now requires

to purchase energy from QFs at the utility's avoided cost. This allows QFs to receive a reasonable to excellent price for the energy they produce and ensures that energy generated by small producers won't be wasted.

Pakistan

In 1994, the

Government of Pakistan The Government of Pakistan () (abbreviated as GoP), constitutionally known as the Federal Government, commonly known as the Centre, is the national authority of the Islamic Republic of Pakistan, a federal republic located in South Asia, con ...

announced an investor-friendly policy to develop IPPs based on oil, coal and gas. Following the policy, 16 IPPs were established. The next year, a hydro power policy was announced, which resulted in the development of the country's first Hydro IPP. In 2002, the new government adopted a new policy, under which another 12 IPPs began operations. For the development of Independent Power Producers (IPPs)
Private Power and Infrastructure Board
operates as one window facilitator on behalf of all the departments and Ministries of the Government of Pakistan to; process power projects in IPP mode, monitor their development, and facilitates in providing all required support on behalf of the Government of Pakistan. In 2015, Pakistan adopted a new power policy by which another 13 IPPs were established, mostly by Chinese companies. A transmission policy for development of

transmission line In electrical engineering, a transmission line is a specialized cable or other structure designed to conduct electromagnetic waves in a contained manner. The term applies when the conductors are long enough that the wave nature of the transmis ...

in the private sector was also announced. More than 40 IPPs were operating in Pakistan as of 2018.

India

India also has many IPP's like ReNew Power, Adani, Onix Renewable, KPI Green Energy, Hero, Mytrah, Ostro, Greenko, Alfanar, Mahindra Susten, Jakson Ltd.Etc.

South Africa

The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is an initiative by the

South African government The Government of South Africa, or South African Government, is the national government of the Republic of South Africa, a parliamentary republic with a three-tier system of government and an independent judiciary, operating in a parliamentary ...

aimed at increasing electricity generation through private sector investment in solar photovoltaic and concentrated solar, onshore

wind power Wind power is the use of wind energy to generate useful work. Historically, wind power was used by sails, windmills and windpumps, but today it is mostly used to generate electricity. This article deals only with wind power for electricity ge ...

, small hydro (<40 MW),

landfill gas Landfill gas is a mix of different gases created by the action of microorganisms within a landfill as they decompose organic waste, including for example, food waste and paper waste. Landfill gas is approximately forty to sixty percent methane, ...

biomass Biomass is a term used in several contexts: in the context of ecology it means living organisms, and in the context of bioenergy it means matter from recently living (but now dead) organisms. In the latter context, there are variations in how ...

, and

biogas Biogas is a gaseous renewable energy source produced from raw materials such as agricultural waste, manure, municipal waste, plant material, sewage, green waste, Wastewater treatment, wastewater, and food waste. Biogas is produced by anaerobic ...

. As of 2021, there were 117 allocations, totalling 8891.86 MW, for private sector generation.

References

{{Electricity generation Electric power companies