Draft National Electricity Policy 2026 Charts Power Sector Roadmap

The Ministry of Power has 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, reflecting the structural and technological changes witnessed in the sector over the past two decades.

Power Sector Transformation Since 2005

According to the Ministry of Power, India’s installed power generation capacity has increased nearly fourfold since 2005, with significant 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 about 1,460 kWh in 2024–25. However, persistent challenges remain in the distribution segment, including high accumulated losses, mounting debt of distribution companies, non-cost-reflective tariffs, and cross-subsidisation.

Consumption and Climate Targets

The Draft NEP 2026 sets ambitious long-term goals. It proposes raising per capita electricity consumption to 2,000 kWh by 2030 and over 4,000 kWh by 2047. These targets are aligned with India’s climate commitments, including a 45 per cent reduction in emissions intensity from 2005 levels by 2030 and achieving net-zero emissions by 2070. The policy seeks to balance energy security, affordability, and environmental sustainability.

Structural Reforms Across the Power Value Chain

Key proposals include advance resource adequacy planning by DISCOMs and State Load Despatch Centres, supported by a national-level plan from the Central Electricity Authority. Financial reforms include automatic annual tariff revisions, increased reliance on demand charges, and reduction of cross-subsidies, especially for manufacturing, railways, and metro systems. The draft also emphasises renewable energy expansion, battery energy storage systems, peer-to-peer power trading, and parity between renewable and conventional power scheduling by 2030.

Imporatnt Facts for Exams

• National Electricity Policy is issued under the Electricity Act, 2003.
• Draft NEP 2026 replaces the National Electricity Policy, 2005.
• India targets net-zero emissions by 2070.
• AT&C losses refer to Aggregate Technical and Commercial losses.

Generation Mix, Markets and Grid Modernisation

The draft policy proposes expansion of nuclear power capacity to 100 GW by 2047, including small and modular reactors, accelerated development of storage-based hydropower projects, and integration of storage with thermal plants. It also outlines reforms in power markets, transmission pricing, distribution networks, grid cybersecurity, and indigenisation of critical technologies such as SCADA systems by 2030. The Ministry said the Draft NEP 2026 provides a future-ready, financially viable and environmentally sustainable blueprint for ensuring reliable and affordable power supply and has invited stakeholder feedback before final notification.