{"id":83862,"date":"2026-01-23T11:33:27","date_gmt":"2026-01-23T06:03:27","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=83862"},"modified":"2026-01-23T11:37:19","modified_gmt":"2026-01-23T06:07:19","slug":"draft-national-electricity-policy-2026","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/draft-national-electricity-policy-2026\/","title":{"rendered":"Draft National Electricity Policy 2026: Key Reforms for India\u2019s Power Sector"},"content":{"rendered":"<h2><b>Draft NEP 2026 Latest News<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Ministry of Power has released the Draft National Electricity Policy (NEP) 2026, outlining a roadmap to overhaul India\u2019s power sector in line with the vision of Viksit Bharat @2047.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Once finalised, the new policy will replace the existing NEP 2005, reflecting two decades of changes in energy demand, technology, and climate priorities.<\/span><\/li>\n<\/ul>\n<h2><b>From Shortages to Scale: How the Power Sector Has Evolved<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The first National Electricity Policy (NEP), notified in 2005, focused on core issues such as power shortages, limited electricity access, and weak infrastructure.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Since then, India\u2019s power sector has transformed significantly.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Installed generation capacity has grown fourfold with strong private sector participation, universal electrification was achieved by March 2021, and a unified national grid became operational in 2013.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Per capita electricity consumption rose to 1,460 kWh in 2024\u201325, while power markets and exchanges improved flexibility and efficiency in procurement.<\/span><\/li>\n<\/ul>\n<h3><b>Persistent Stress Points in Distribution and Tariffs<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Despite these gains, structural problems persist, especially in the distribution segment.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">High accumulated losses, mounting debt of discoms, and non\u2013cost-reflective tariffs continue to strain the system.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Heavy cross-subsidisation has pushed up industrial power tariffs, hurting the global competitiveness of Indian industry.<\/span><\/li>\n<\/ul>\n<h3><b>Draft NEP 2026: Ambitious Consumption and Climate Goals<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Against this backdrop, the Draft National Electricity Policy 2026 sets forward-looking targets.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">It aims to raise per capita electricity consumption to 2,000 kWh by 2030 and over 4,000 kWh by 2047.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The policy also aligns the power sector with India\u2019s climate commitments, including a <\/span><b>45% reduction in emissions intensity<\/b><span style=\"font-weight: 400;\"> from 2005 levels by 2030 and net-zero emissions by 2070, signalling a decisive shift towards low-carbon energy pathways.<\/span><\/li>\n<\/ul>\n<h2><b>Draft National Electricity Policy 2026: Key Interventions at a Glance<\/b><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The Draft NEP 2026 proposes wide-ranging reforms across planning, tariffs, markets, generation, grids, and technology to build a reliable, competitive, and low-carbon power system.<\/span><\/li>\n<\/ul>\n<h3><b>Resource Adequacy Planning<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Decentralised advance planning<\/b><span style=\"font-weight: 400;\">: DISCOMs and State Load Despatch Centres (SLDCs) to prepare utility- and state-level Resource Adequacy (RA) plans under State Commission regulations.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>National coordination<\/b><span style=\"font-weight: 400;\">: Central Electricity Authority (CEA) to prepare a national RA plan to ensure capacity adequacy at the country level.<\/span><\/li>\n<\/ul>\n<h3><b>Financial Viability and Economic Competitiveness<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Automatic tariff revision<\/b><span style=\"font-weight: 400;\">: Linking tariffs to a suitable index for annual revision if State Commissions do not issue tariff orders.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cost-reflective tariffs<\/b><span style=\"font-weight: 400;\">: Progressive recovery of fixed costs through demand charges to reduce cross-subsidisation across consumer categories.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cross-subsidy exemptions<\/b><span style=\"font-weight: 400;\">: Removal of cross-subsidies and surcharges for manufacturing, railways and metro railways to lower logistics costs and improve industrial competitiveness.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Large consumers<\/b><span style=\"font-weight: 400;\">: Possible exemption of distribution licensees from Universal Service Obligation for consumers with contracted load of 1 MW and above.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Faster resolution<\/b><span style=\"font-weight: 400;\">: Strengthening dispute resolution mechanisms to reduce burden on regulators and lower costs for consumers.<\/span><\/li>\n<\/ul>\n<h3><b>Renewable Energy Generation and Storage<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Market-based capacity addition<\/b><span style=\"font-weight: 400;\">: Greater reliance on markets and captive power plants for RE expansion.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Distributed Renewable Energy (DRE):<\/b><span style=\"font-weight: 400;\"> DISCOM-led storage for small consumers to gain economies of scale; bulk consumers to install their own storage.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Energy trading<\/b><span style=\"font-weight: 400;\">: Peer-to-peer (P2P) trading of surplus DRE and stored energy, directly or via aggregators.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Scheduling parity:<\/b><span style=\"font-weight: 400;\"> Equal treatment of renewable and conventional power in scheduling and deviation mechanisms by 2030.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Market deployment:<\/b><span style=\"font-weight: 400;\"> Market-based rollout of storage, promotion of Battery Energy Storage Systems (BESS), domestic manufacturing of cells and components, and incentives such as Viability Gap Funding (VGF) for BESS and pumped storage.<\/span><\/li>\n<\/ul>\n<h3><b>Thermal Power: Supporting the Energy Transition<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Grid support role:<\/b><span style=\"font-weight: 400;\"> Integration of storage and repurposing of older thermal units to support grid stability and renewable integration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Efficiency gains:<\/b><span style=\"font-weight: 400;\"> Exploring direct use of steam from thermal plants for district cooling and industrial processes.<\/span><\/li>\n<\/ul>\n<h3><b>Nuclear Energy Expansion<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Advanced technologies:<\/b><span style=\"font-weight: 400;\"> In line with the SHANTI Act, 2025, adoption of advanced nuclear technologies, modular reactors and small reactors.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Long-term target:<\/b><span style=\"font-weight: 400;\"> Scaling nuclear capacity to 100 GW by 2047, including use by commercial and industrial consumers.<\/span><\/li>\n<\/ul>\n<h3><b>Hydropower Development<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Storage-based hydro: Fast-tracking storage hydro projects for flood moderation, irrigation, water security and energy security.<\/span><\/li>\n<\/ul>\n<h3><b>Power Markets and Competition<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Market oversight<\/b><span style=\"font-weight: 400;\">: Strong regulatory framework for monitoring and surveillance to prevent collusion, gaming and market dominance.<\/span><\/li>\n<\/ul>\n<h3><b>Transmission Reforms<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Right of Way (RoW):<\/b><span style=\"font-weight: 400;\"> Use of advanced technologies and appropriate land-use compensation to address RoW challenges.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tariff parity:<\/b><span style=\"font-weight: 400;\"> Equal transmission tariff treatment for renewable and conventional power by 2030.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Efficient access<\/b><span style=\"font-weight: 400;\">: Utilisation-based allocation of transmission connectivity to prevent speculative hoarding.<\/span><\/li>\n<\/ul>\n<h3><b>Distribution System Reforms<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Loss reduction<\/b><span style=\"font-weight: 400;\">: Targeting single-digit Aggregate Technical and Commercial (AT&amp;C) losses.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Network sharing<\/b><span style=\"font-weight: 400;\">: Shared distribution networks to enhance competition and avoid duplication of infrastructure.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Distribution System Operator (DSO):<\/b><span style=\"font-weight: 400;\"> Establishment of DSOs to enable network sharing and integrate distributed renewables, storage and Vehicle-to-Grid (V2G) systems.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Urban reliability<\/b><span style=\"font-weight: 400;\">: N-1 redundancy at distribution transformer level in cities with population above 10 lakh by 2032; undergrounding of networks in congested urban areas.<\/span><\/li>\n<\/ul>\n<h3><b>Grid Operations and Governance<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Institutional reform<\/b><span style=\"font-weight: 400;\">: Functional unbundling of State Transmission Utilities and creation of independent entities for SLDC operations and transmission planning.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Regulatory alignment<\/b><span style=\"font-weight: 400;\">: Harmonising State Grid Codes with the Indian Electricity Grid Code issued by CERC.<\/span><\/li>\n<\/ul>\n<h3><b>Cybersecurity and Data Sovereignty<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cyber resilience<\/b><span style=\"font-weight: 400;\">: Establishment of a robust cybersecurity framework for the power sector.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Data localisation<\/b><span style=\"font-weight: 400;\">: Mandatory storage of power sector data within India to ensure sovereignty and system security.<\/span><\/li>\n<\/ul>\n<h3><b>Data Sharing and Visibility<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Transparent data framework: Sharing of operational and market data under a central government-prescribed framework.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Real-time monitoring: Ensuring real-time visibility of Distributed Energy Resources for DISCOMs and SLDCs.<\/span><\/li>\n<\/ul>\n<h3><b>Technology and Skill Development<\/b><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Indigenous systems<\/b><span style=\"font-weight: 400;\">: Transition to domestically developed SCADA systems by 2030.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Software self-reliance:<\/b><span style=\"font-weight: 400;\"> Development of Indian software solutions for all critical power system applications.<\/span><\/li>\n<\/ul>\n<p><b>Source:<\/b> <strong><a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2216661&amp;reg=3&amp;lang=2\" target=\"_blank\" rel=\"nofollow noopener\">PIB<\/a> | <a href=\"https:\/\/indianexpress.com\/article\/explained\/explained-economics\/draft-national-electricity-policy-2026-10489086\/\" target=\"_blank\" rel=\"nofollow noopener\">IE<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Draft National Electricity Policy 2026 outlines power sector reforms, renewable expansion, tariff rationalisation and grid upgrades to meet India\u2019s Viksit Bharat 2047 goals.<\/p>\n","protected":false},"author":18,"featured_media":83875,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[4896,60,22,59],"class_list":{"0":"post-83862","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"tag-draft-national-electricity-policy-2026","9":"tag-mains-articles","10":"tag-upsc-current-affairs","11":"tag-upsc-mains-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/83862","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=83862"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/83862\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/83875"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=83862"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=83862"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=83862"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}