Draft National Electricity Policy 2026 Released

India has released the Draft National Electricity Policy (NEP) 2026 for public consultation, setting out a long-term roadmap for power sector reform, financial stability, clean energy expansion and grid modernisation. Once finalised, it will replace the National Electricity Policy notified in 2005 and guide the sector towards the vision of Viksit Bharat @2047.

Policy Background

The draft notes that India’s power sector has changed sharply since 2005. Installed generation capacity has risen fourfold, household electrification has been completed, and the national grid has become fully integrated. Per capita electricity consumption has also increased to 1,460 kWh in 2024–25. However, the distribution segment continues to face stress due to DISCOM losses, debt, non-cost-reflective tariffs and cross-subsidies.

Key Consumption and Climate Targets

The draft policy sets major demand-side and climate goals.

• Per capita electricity consumption is targeted at 2,000 kWh by 2030.
• The target rises to over 4,000 kWh by 2047.
• The policy aligns with India’s climate commitments, including a 45 per cent reduction in emissions intensity by 2030 from 2005 levels.
• It also supports the national goal of net-zero emissions by 2070.

Reforms in Tariffs, Markets and Distribution

The draft proposes annual automatic tariff revision linked to indices, greater use of demand charges, and gradual reduction of cross-subsidies, especially for industry, railways and metro systems. It also seeks single-digit AT&C losses, shared distribution networks, a Distribution System Operator model, and better reliability in large cities. Underground cabling is proposed in congested urban areas.

Renewables, Storage and Grid Modernisation

The policy promotes renewable energy through market-based mechanisms, battery energy storage systems, peer-to-peer trading and parity in scheduling between renewable and conventional power by 2030. It also supports storage-linked hydropower, thermal plant repurposing, expansion of nuclear capacity to 100 GW by 2047, stronger cybersecurity, domestic data storage, and indigenous SCADA and software systems by 2030.