Draft National Electricity Policy 2026 Released For Public Consultation
The Ministry of Power on Wednesday released the Draft National Electricity Policy (NEP) 2026 for public consultation, outlining a comprehensive roadmap to transform India’s power sector in line with the vision of Viksit Bharat @2047. Once finalised, the new policy will replace the existing National Electricity Policy notified in 2005.
The draft policy reflects the significant transformation India’s power sector has undergone over the past two decades. Since 2005, installed power generation capacity has increased fourfold with substantial private sector participation, universal household electrification was achieved by March 2021, a unified national grid became operational in 2013, and per capita electricity consumption reached 1,460 kWh in 2024–25.
Despite these advances, the Ministry noted that challenges persist, particularly in the distribution segment. High accumulated losses, outstanding debt of distribution companies (DISCOMs), non-cost-reflective tariffs and cross-subsidisation continue to affect the sector’s financial health and the global competitiveness of Indian industry.
Against this backdrop, the Draft NEP 2026 sets ambitious targets. It aims to raise per capita electricity consumption to 2,000 kWh by 2030 and over 4,000 kWh by 2047, while aligning with India’s climate commitments, including a 45 per cent reduction in emissions intensity by 2030 (from 2005 levels) and achieving net-zero emissions by 2070.
The draft policy proposes several structural and regulatory reforms:
Resource Adequacy: DISCOMs and State Load Despatch Centres (SLDCs) will prepare advance resource adequacy plans, with the Central Electricity Authority (CEA) developing a national-level plan to ensure sufficient capacity.
Financial Viability: Automatic annual tariff revision linked to suitable indices, greater reliance on demand charges to recover fixed costs, and reduced cross-subsidies—particularly for manufacturing, railways and metro systems—to enhance economic competitiveness.
Renewable Energy and Storage: Expansion of renewable energy through market-based mechanisms, deployment of battery energy storage systems (BESS), peer-to-peer trading of surplus distributed renewable energy, and parity between renewable and conventional power in scheduling by 2030.
Thermal and Nuclear Power: Integration of storage with thermal plants, repurposing of older units for grid support, and expansion of nuclear capacity to 100 GW by 2047, including small and modular reactors in line with the SHANTI Act, 2025.
Hydropower: Accelerated development of storage-based hydroelectric projects to support flood moderation, irrigation, and energy security.
Power Markets and Transmission: Stronger market monitoring to prevent manipulation, parity of transmission tariffs for renewable energy by 2030, and improved Right of Way compensation through adoption of advanced technologies.
Distribution Reforms: Measures to achieve single-digit AT&C losses, shared distribution networks, creation of a Distribution System Operator (DSO), enhanced grid reliability in large cities, and underground cabling in congested urban areas.
Grid Operations and Cybersecurity: Functional unbundling of State Transmission Utilities, alignment of State Grid Codes with national standards, establishment of a robust cybersecurity framework, and mandatory domestic storage of power sector data.
Technology and Skills: Transition to indigenously developed SCADA systems and domestic software solutions for critical power system applications by 2030.
The Ministry said the Draft NEP 2026 provides a future-ready, financially viable and environmentally sustainable blueprint for ensuring reliable, affordable and quality power supply, and has invited feedback from stakeholders to refine the policy before final notification.
