Draft National Electricity Policy 2026 Released for Public Consultation, Sets Roadmap to Viksit Bharat 2047

January 21, 2026 : The Ministry of Power on Wednesday released the Draft National Electricity Policy (NEP) 2026 for public consultation, laying out a long-term strategy to reshape India’s power sector in line with the vision of Viksit Bharat @2047. Once finalised, the policy will replace the existing National Electricity Policy that has been in force since 2005.

The draft policy takes stock of the sweeping changes the power sector has witnessed over the past two decades. Since 2005, India’s installed power generation capacity has expanded nearly four times, driven largely by increased private sector participation. Universal household electrification was completed by March 2021, a unified national grid became operational in 2013, and per capita electricity consumption rose to about 1,460 kWh in 2024–25.

At the same time, the Ministry acknowledged that persistent structural issues continue to weigh on the sector, particularly in power distribution. High accumulated losses, mounting debt of distribution companies (DISCOMs), tariffs that do not fully reflect costs, and heavy cross-subsidisation remain key concerns, affecting the financial stability of utilities and the global competitiveness of Indian industry.

Against this backdrop, the Draft NEP 2026 sets out ambitious consumption and sustainability targets. It proposes increasing per capita electricity consumption to 2,000 kWh by 2030 and beyond 4,000 kWh by 2047, while remaining aligned with India’s climate commitments. These include a 45 per cent reduction in emissions intensity by 2030 from 2005 levels and achieving net-zero emissions by 2070.

To support these goals, the draft outlines a series of structural and regulatory reforms. It emphasises advance resource adequacy planning by DISCOMs and State Load Despatch Centres, backed by a national-level plan prepared by the Central Electricity Authority to ensure sufficient generation capacity. On the financial side, the policy proposes automatic annual tariff revisions linked to suitable indices, greater use of demand charges to recover fixed costs, and a gradual reduction in cross-subsidies, particularly for manufacturing, railways and metro systems.

The policy places strong focus on clean energy and system flexibility. It calls for expanding renewable energy through market-based mechanisms, scaling up battery energy storage systems, enabling peer-to-peer trading of surplus distributed renewable power, and achieving parity between renewable and conventional power in scheduling by 2030. Thermal power plants are envisaged to play a supporting role through integration with storage and repurposing of older units for grid stability. Nuclear energy also features prominently, with a target of 100 GW capacity by 2047, including small and modular reactors.

Hydropower development, especially storage-based projects, is proposed to be accelerated to support energy security as well as flood moderation and irrigation. In power markets and transmission, the draft stresses stronger market monitoring to prevent manipulation, parity in transmission tariffs for renewable energy by 2030, and improved Right of Way compensation through adoption of advanced technologies.

Distribution reforms form a major pillar of the draft. Measures include achieving single-digit aggregate technical and commercial losses, shared distribution networks, creation of a Distribution System Operator, improved reliability in large urban centres, and underground cabling in congested city areas. The policy also highlights the need for stronger grid operations and cybersecurity, including functional unbundling of State Transmission Utilities, alignment of State Grid Codes with national standards, and mandatory domestic storage of power sector data.

Finally, the draft underlines the importance of technology and skills development, proposing a transition to indigenously developed SCADA systems and domestic software solutions for critical power system applications by 2030.

The Ministry said the Draft NEP 2026 offers a future-ready, financially viable and environmentally sustainable blueprint to ensure reliable, affordable and quality power supply. Stakeholders have been invited to submit their feedback to help refine the policy before it is formally notified.