{"id":373426,"date":"2026-01-22T10:30:20","date_gmt":"2026-01-22T05:00:20","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=373426"},"modified":"2026-01-22T11:15:30","modified_gmt":"2026-01-22T05:45:30","slug":"draft-national-electricity-policy-2026-explained","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/01\/22\/draft-national-electricity-policy-2026-explained\/","title":{"rendered":"Reimagining India’s Power Toward Viksit Bharat @2047: Ministry of Power releases Draft National Electricity Policy 2026 for public consultation"},"content":{"rendered":"
\n

On 20-1-2026, the Ministry of Power issued the draft of National Electricity Policy (NEP) 2026<\/span>, introducing a framework that ensures reliable affordable and sustainable electricity supply. It aims to bring transformation to power sector aligning with the vision of Viksit Bharat @2047<\/span>.<\/p>\n

This Draft policy invites suggestions from stakeholders before 19-2-2026, which can be submitted at rr1-mop@gov.in<\/span><\/a>.<\/p>\n

Background:<\/h3>\n

The first National Electricity Policy<\/span> was introduced in 2005 when power sector faced fundamental challenges such as demand—supply deficits, low access to electricity, insufficient private participation, and underdeveloped infrastructure.<\/p>\n

Since then, following transformations were noted:<\/p>\n

    \n
  • \n

    Installed generation capacity has increased fourfold<\/span>, driven significantly by private sector participation.<\/p>\n<\/li>\n

  • \n

    Universal electrification<\/span> was achieved in March 2021<\/span>.<\/p>\n<\/li>\n

  • \n

    A unified national grid<\/span> became operational in December 2013<\/span>.<\/p>\n<\/li>\n

  • \n

    Per capita electricity consumption rose to 1,460 kWh in 2024—25<\/span>.<\/p>\n<\/li>\n

  • \n

    Power exchanges and markets evolved, enhancing efficiency and procurement flexibility.<\/p>\n<\/li>\n<\/ul>\n

    However, despite these achievements, persistent systemic issues remain related to distribution segment. DISCOMs continued to face:<\/p>\n

      \n
    • \n

      High accumulated losses and debt<\/p>\n<\/li>\n

    • \n

      Tariffs that are often non-cost-reflective<\/p>\n<\/li>\n

    • \n

      Heavy cross-subsidisation leading to elevated industrial tariffs<\/span>, affecting global competitiveness<\/p>\n<\/li>\n<\/ul>\n

      In response to deal with these backdrops Power Ministry has drafted NEP 2026<\/span> which aims to achieve the set milestones to sustain growth and ensure long-term sustainability:<\/p>\n

        \n
      • \n

        Per capita electricity consumption:<\/p>\n

        ○ 2,000 kWh by 2030<\/p>\n

        ○ 4,000+ kWh by 2047<\/p>\n<\/li>\n

      • \n

        Climate alignment:<\/p>\n

        ○ 45% reduction in emissions intensity from 2005 levels by 2030<\/p>\n

        ○ Net-zero emissions by 2070<\/p>\n<\/li>\n<\/ul>\n

        Key Takeaways of National Electricity Policy:<\/h3>\n
          \n
        1. \n

          National Electricity Policy<\/span> is introduced in compliance with Electricity Act 2003<\/span>, replacing the earlier National Electricity Policy of 2005<\/span>.<\/p>\n<\/li>\n

        2. \n

          To ensure planned and reliable capacity expansion:<\/p>\n

            \n
          • \n

            DISCOMs and SLDCs will prepare utility- and state-level Resource Adequacy (‘RA’) plans under State Commission regulations.<\/p>\n<\/li>\n

          • \n

            The Central Electricity Authority (‘CEA’) will consolidate these into a national RA plan.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n

          • \n

            The draft emphasizes restoring the sector’s financial health:<\/p>\n

              \n
            • \n

              Indexed tariffs with automatic annual revisions where State Commissions delay orders.<\/p>\n<\/li>\n

            • \n

              Progressive recovery of fixed costs through demand charges to reduce cross-subsidisation.<\/p>\n<\/li>\n

            • \n

              Exemption from cross-subsidies and surcharges for manufacturing industries, railways, and metro rail to boost competitiveness.<\/p>\n<\/li>\n

            • \n

              Regulatory Commissions may exempt distribution licensees from Universal Service Obligation for consumers with contracted load \u00e2\u2030\u00a5 1 MW.<\/p>\n<\/li>\n

            • \n

              Strengthening dispute resolution mechanisms to reduce burdens on regulators and consumers.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n

            • \n

              To accelerate India’s clean energy transition:<\/p>\n

                \n
              • \n

                Renewable Energy<\/span> (‘RE’) capacity addition via market-based mechanisms and support for captive RE projects.<\/p>\n<\/li>\n

              • \n

                Storage installation by distribution licensees on behalf of small consumers to leverage economies of scale; bulk consumers may install their own storage.<\/p>\n<\/li>\n

              • \n

                Allowing peer-to-peer (P2P) trading of surplus DRE energy and storage through aggregators.<\/p>\n<\/li>\n

              • \n

                Parity between RE and conventional sources in scheduling and deviation by 2030.<\/p>\n<\/li>\n

              • \n

                Promotion of market-based deployment of storage, BESS technologies, and domestic manufacturing of cells and components.<\/p>\n<\/li>\n

              • \n

                Demand-side support such as Viability Gap Funding<\/span> (‘VGF)’ for BESS and pumped storage.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n

              • \n

                The sector advances toward a low-carbon future, but thermal power will continue to play a role:<\/p>\n

                  \n
                • \n

                  Integration of storage solutions with thermal plants.<\/p>\n<\/li>\n

                • \n

                  Repurposing older units for grid support and improved reliability.<\/p>\n<\/li>\n

                • \n

                  Exploring direct use of thermal plant steam for district cooling and industrial processes.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n

                • \n

                  This policy is in line with the SHANTI Act, 2025<\/span>, supporting:<\/p>\n

                    \n
                  • \n

                    Adoption of advanced nuclear technologies<\/p>\n<\/li>\n

                  • \n

                    Development of Modular and Small Reactors<\/p>\n<\/li>\n

                  • \n

                    Use of nuclear energy by commercial and industrial consumers<\/p>\n<\/li>\n

                  • \n

                    A target of 100 GW nuclear capacity by 2047<\/p>\n<\/li>\n<\/ul>\n<\/li>\n

                  • \n

                    To expand storage-based clean energy:<\/p>\n

                      \n
                    • \n

                      Accelerated development of storage-based hydroelectric projects<\/p>\n<\/li>\n

                    • \n

                      Focus on flood moderation, irrigation, and overall water and energy security<\/p>\n<\/li>\n<\/ul>\n<\/li>\n

                    • \n

                      The policy calls for accelerated storage-based hydropower development, strengthened market surveillance, and modernized transmission systems using advanced technologies, fair RoW compensation, RE tariff parity by 2030, and utilisation-based connectivity to prevent speculative holding.<\/p>\n<\/li>\n

                    • \n

                      It promotes achieving single-digit AT&C losses, adopting shared distribution networks, establishing DSOs for RE-storage-V2G integration, ensuring N-1 redundancy in large cities by 2032, implementing underground networks in congested areas, and improving grid governance through STU unbundling and alignment with the Indian Electricity Grid Code.<\/p>\n<\/li>\n

                    • \n

                      It mandates strong cybersecurity measures<\/span>, compulsory domestic storage of power-sector data, structured data-sharing with real-time DER visibility, and a transition to indigenous SCADA systems by 2030 along with domestic development of all critical power-system software.<\/p>\n<\/li>\n<\/ol>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

                      Power Ministry has issued draft National Electricity Policy 2026 which aims for a future-ready energy ecosystem that strengthens reliability, sustainability, and economic competitiveness.<\/p>\n","protected":false},"author":67525,"featured_media":373430,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,1193],"tags":[97290,55441,39887,97288,97295,97293,97291,97287,97292,38734,29742,97289,97294,72712],"class_list":["post-373426","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legislationupdates","category-notifications","tag-clean-energy-transition","tag-cybersecurity","tag-discom","tag-draft-nep-2026","tag-energy-policy","tag-grid-modernisation","tag-hydropower","tag-national-electricity-policy-2026","tag-nuclear-energy","tag-power-sector","tag-renewable-energy","tag-resource-adequacy","tag-scada","tag-viksit-bharat-2047"],"yoast_head":"\nDraft National Electricity Policy 2026Expalined | SCC Times<\/title>\n<meta name=\"description\" content=\"Understand the key provisions 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