NEW DELHI: The government on Wednesday released the new “Draft National Electricity Policy (NEP) 2026” for public consultation with stakeholders, marking a significant step towards transforming India’s power sector.
The Draft NEP 2026, aims at ensuring reliable, affordable and sustainable electricity for all while supporting the country’s long-term economic growth and energy transition. The new policy will replace the existing NEP which was notified in 2005.
The policy aims to raise per capita electricity consumption to 2,000 kWh by 2030 and beyond 4,000 kWh by 2047. At the same time, it is aligned with India’s climate commitments, including cutting emissions intensity by 45 per cent from 2005 levels by 2030 and reaching net-zero emissions by 2070, which calls for a decisive transition toward low-carbon energy pathways.
The Draft National Electricity Policy (NEP) 2026 proposes a wide-ranging set of reforms with key focus of the draft policy is Resource Adequacy (RA) which mandates decentralised advance planning, with DISCOMs and State Load Despatch Centres (SLDCs) preparing utility- and state-level RA plans in line with State Commission regulations.
The Central Electricity Authority (CEA) will consolidate these into a national-level plan to ensure overall adequacy of capacity.
In the area of renewable energy (RE) and storage, the draft policy emphasises market-based capacity addition, including captive power plants. It supports installation of storage systems by distribution licensees on behalf of small consumers to leverage economies of scale, while enabling bulk consumers to deploy their own storage to promote Distributed Renewable Energy (DRE).
For thermal generation, the draft NEP highlights integration of storage and repurposing of older plants to provide grid support and facilitate higher renewable integration. It also suggests exploring direct use of steam from thermal plants for district cooling and industrial processes to improve overall efficiency.
In nuclear power, the policy aligns with the SHANTI Act, 2025, proposing adoption of advanced nuclear technologies, development of modular and small reactors, and use of nuclear energy by commercial and industrial consumers, with a target of achieving 100 GW capacity by 2047.
The policy also calls for accelerated development of storage-based hydroelectric projects to support flood moderation, irrigation, water security and energy security.
To strengthen power markets, the draft emphasises a robust regulatory framework for monitoring and surveillance to prevent collusion, gaming and market dominance.
On transmission, it proposes adoption of advanced technologies and suitable compensation for land use to address Right of Way (RoW) challenges. Transmission tariff parity with conventional power for all new RE capacity by 2030 is envisaged, along with a utilisation-based framework for allocating transmission connectivity to prevent speculative holding.
In the distribution segment, the draft targets single-digit AT&C losses and promotes shared distribution networks to enhance competition and efficiency without duplicating infrastructure. It proposes establishment of a Distribution System Operator (DSO) to enable network sharing and integration of distributed renewables, storage and Vehicle-to-Grid (V2G) systems.
Cities with populations above 10 lakh are to achieve N-1 redundancy at the distribution transformer level by 2032, with undergrounding of networks in congested areas.
For grid operations, the policy recommends functional unbundling of State Transmission Utilities and creation of independent state-level entities for SLDC operations and transmission planning, along with alignment of State Grid Codes with the Indian Electricity Grid Code.
The draft NEP also underscores cybersecurity and data governance, proposing a robust cybersecurity framework, mandatory storage of power sector data within India, structured data-sharing mechanisms, and real-time visibility of distributed energy resources for DISCOMs and SLDCs.