India Unveils Draft National Electricity Policy 2026 for Public Consultation

The 'Draft NEP 2026' aims to transform the power sector for meeting the vision of Viksit Bharat at 2047. The policy targets per capita electricity consumption of 2,000 kWh by 2030 and over 4,000 kWh by 2047.

It also aligns with India's climate commitments, including reduction of emissions intensity by 45 per cent below 2005 levels by 2030 and achievement of net-zero emissions by 2070, necessitating a decisive shift towards low-carbon energy pathways.

The policy, once finalised, intends to replace the existing NEP which was notified in 2005, said Ministry of Power in a statement.

According to the 'Draft NEP 2026, to ensure required capacity expansion through decentralised advance planning, DISCOMs and SLDCs will prepare Resource Adequacy (RA) plans at utility and state levels, in accordance with the regulations of State Commissions.

"CEA will prepare a corresponding national plan to ensure adequacy at the national level," the policy said.

Moreover, tariffs must be linked to a suitable index for automatic annual revision which operates if no tariff order is passed by the State Commission.

"Tariffs should progressively recover fixed costs through demand charges to avoid cross-subsidisation between the tariff components as well as among various categories of consumers," it added.

Exemption of cross-subsidies and surcharges on manufacturing industry, railways and metro railways will increase the economic competitiveness of Indian goods and reduce logistics cost.

"Regulatory Commissions, in consultation with Appropriate Governments, may exempt the distribution licensees from the Universal Service Obligation in respect of consumers having a contracted load of 1 MW and above," the policy recommended.

Notably, strengthening of dispute resolution mechanism will reduce burden on Regulatory Commissions, enable faster dispute resolution and reduce financial burden on consumers.

On renewable energy generation and storage, it suggests RE capacity addition through market-based mechanisms and captive power plants.

"Installation of storage by distribution licensee on behalf of small consumers will get benefit of economies of scale and by bulk consumers themselves to facilitate adoption of Distributed Renewable Energy (DRE) sources," it said.

It also suggests trading of surplus energy from DRE as well storage by consumers themselves (P2P) or through aggregators and ensuring parity between RE and conventional sources in scheduling and deviation by 2030.

In line with the provisions of SHANTI Act, 2025, adoption of advanced nuclear technologies, developing Modular Reactors, setting up Small Reactors, and use of nuclear energy by commercial and industrial consumers to achieve 100 GW by 2047 are also recommended.

The first National Electricity Policy, notified in February 2005, addressed fundamental challenges of the power sector, including demand-supply deficits, limited access to electricity, and inadequate infrastructure.

Since then, India's power sector has witnessed transformational progress. With new provisions, the 'Draft NEP 2026' provides a comprehensive blueprint to provide reliable and quality power at affordable price.

- IANS