The Ministry of Power has issued the draft National Electricity Policy (NEP) 2026, outlining a comprehensive roadmap to transform India’s power sector.
The draft policy takes stock of the significant transformation achieved in the power sector over the past two decades, including a fourfold increase in installed generation capacity, universal household electrification, establishment of a unified national grid and improvement in power market mechanisms. The draft NEP 2026 sets ambitious targets including increasing per capita electricity consumption to 2,000 kWh by 2030 and over 4,000 kWh by 2047. Some of the key proposals in the draft policy include mandatory resource adequacy planning by discoms and state load dispatch centres, automatic annual tariff revisions linked to suitable indices, progressive recovery of fixed costs through demand charges and exemption of cross-subsidies and surcharges for manufacturing, railways and metro rail systems. The policy also proposes strengthening dispute resolution mechanisms and allowing regulatory commissions to exempt distribution licensees from universal service obligations for consumers with contracted loads of 1 MW and above. On renewable energy and storage, the draft policy emphasises market-based capacity addition, deployment of battery energy storage systems and pumped storage projects, peer-to-peer trading of surplus distributed renewable energy, parity between renewable and conventional sources in scheduling and deviation by 2030. The draft NEP 2026 outlines reforms across transmission and distribution including addressing right-of-way challenges.