A captive power plant is a facility that supplies an energy user with a localised source of power. Industrial plants, huge offices, and data centres are common examples. The plants might run in grid parallel mode, with the option to export excess power to the local electrical grid. They may also be able to function in island mode, which means they can run independently of the local electrical distribution system. Captive power plants are a type of distributed generation that generates electricity close to the point of consumption. Distributed generation allows for great fuel economy while reducing losses associated with electricity transmission from centralised power plants. In microgrids, gas engines can be integrated with other power generation or storage technologies.

Captive power plants have a number of advantages.
  1. Self-generation ensures power supply security and resiliency.
  2. Cost savings due to excellent fuel efficiency, especially when used in a CHP arrangement.
  3. Fuel efficiency has resulted in improved environmental performance.