Draft National Electricity Policy 2026

National Electricity Policy (NEP) 2026 Overview:

1. Draft Release & Aim:

   • The Ministry of Power has released the draft of National Electricity Policy (NEP) 2026 for public consultation.
   • Goal: Transform the electricity sector to achieve developed India status by 2047 and replace the current NEP, notified in February 2005.

2. Historical Context:

   • The 2005 NEP focused on core challenges like demand-supply gap, limited electricity availability, and inadequate infrastructure.
   • Significant developments since then:
     • Installed generating capacity increased fourfold.
     • Universal electrification achieved by March 2021.
     • Integrated National Grid started in December 2013.
     • Projected per capita electricity consumption to reach 1,460 kWh by 2024-2025.

3. Current Challenges:

   • Continued issues in the distribution sector including high accumulated losses and overdue debts.
   • Cost disparities in fee structures affecting global competitiveness.

4. Targets Set in NEP 2026:

   • Increase per capita electricity consumption to 2,000 kWh by 2030 and 4,000 kWh by 2047.
   • Align with climate commitments:
     • Reduce emissions intensity by 45% from 2005 levels by 2030.
     • Attain net-zero emissions by 2070.

5. Key Interventions Proposed:

   • Resource Adequacy (RA):
     • State Commissions and utilities to prepare plans for capacity expansion guided by the Central Electricity Authority (CEA).
   • Financial Viability:
     • Automatic annual fee adjustments linked to an appropriate index to enhance financial viability.
   • Support for Manufacturing:
     • Reduce cross-subsidies and burdens on manufacturing industries to enhance competitiveness and reduce logistics costs.
   • Renewable Energy (RE):
     • Increase RE capacity via market-based systems and ensure storage solutions are developed for small consumers.
     • Achieve parity in scheduling and deviation between RE and conventional sources by 2030.

6. Thermal and Nuclear Energy:

   • Thermal plants to integrate storage solutions and reuse steam for district cooling and industrial processes.
   • Target to achieve 100 GW of nuclear power by 2047 using advanced technologies.

7. Hydropower Development:

   • Quick development of storage-based hydropower projects for flood control and irrigation.

8. Electricity Market Regulation:

   • Establish strong regulatory frameworks to prevent market manipulation and to monitor market activities effectively.
   • Address challenges related to Right of Way (RoW) for transmission using modern technologies.

9. Grid Operations and Cybersecurity:

   • Functional separation of state transmission utilities.
   • Establish cybersecurity frameworks and mandatory data storage requirements.

10. Technology & Skills Development:

• Transition to domestically developed SCADA systems by 2030 and boost local software development.

1. Goals for Distribution:

• Aim for single-digit Aggregate Technical and Commercial (AT&C) losses and increase efficiency via shared distribution networks and underground wiring in congested areas.

1. Final Objective:

• To establish a future-ready, economically viable, and environmentally sustainable electricity sector, ensuring reliable and quality power at affordable prices, thereby supporting India's vision for development by 2047.

This comprehensive draft of NEP 2026 emphasizes the integration of advanced technology, sustainability initiatives, and a more efficient energy market to address the growing demands and challenges of the electricity sector in India.