The Ministry of Power (MoP) on January 20, 2026, issued a notification seeking comments on Draft National Electricity Policy, 2026.
The Electricity Act, 2003 requires the Central Government to formulate and periodically review the National Electricity Policy (NEP) in consultation with State Governments and the Central Electricity Authority. In line with this mandate, the Ministry of Power has prepared the Draft National Electricity Policy, 2026, taking into account the significant transformation of India’s power sector, emerging challenges—especially in the distribution segment—and the needs arising from the country’s energy transition and long-term development goals.
The Draft NEP 2026 sets out a strategic framework to ensure reliable, affordable, and sustainable electricity supply, while promoting competition, strengthening grid resilience, and delivering consumer-centric services. These objectives align with India’s broader vision of Viksit Bharat @ 2047. The Ministry has invited stakeholders to submit comments and suggestions on the draft policy, along with the explanatory note, within 30 days of the issuance of the communication via the specified email address.
The Draft NEP 2026 includes following major interventions:
• Resource Adequacy (RA):
To ensure required capacity expansion through decentralized advance planning, DISCOMs and SLDCs shall prepare RA plans at utility and state levels, in accordance with the regulations of State Commissions. CEA will prepare a corresponding national plan to ensure adequacy at the national level.
• Financial Viability & Economic Competitiveness:
Tariffs must be linked to a suitable index for automatic annual revision which operates if no tariff order is passed by the State Commission.
Tariffs should progressively recover fixed costs through demand charges to avoid cross-subsidisation between the tariff components as well as among various categories of consumers.
Exemption of cross-subsidies and surcharges on manufacturing industry, railways and metro railways to increase the economic competitiveness of Indian goods and reduce logistics cost.
Regulatory Commissions, in consultation with Appropriate Governments, may exempt the distribution licensees from the Universal Service Obligation in respect of consumers having a contracted load of 1 MW and above.
Strengthening of dispute resolution mechanism to reduce burden on Regulatory Commissions, enable faster dispute resolution and reduce financial burden on consumers.
• Renewable Energy Generation & Storage:
RE capacity addition through market-based mechanisms and captive power plants.
Installation of storage by distribution licensee on behalf of small consumers to get benefit of economies of scale and by bulk consumers themselves to facilitate adoption of Distributed Renewable Energy (DRE) sources.
Trading of surplus energy from DRE as well storage by consumers themselves (P2P) or through aggregators.
Parity between RE and conventional sources in scheduling and deviation by 2030.
Market-based deployment of storage, use of emerging Battery Energy Storage System (BESS) technologies, domestic manufacturing of cells and other components of BESS and demand side incentives like VGF for BESS and pumped storage projects.
• Thermal Generation:
Integration of storage, and repurposing of older units for grid support to enable greater renewable energy integration.
Exploring possibility of direct utilization of the steam generated from thermal plants for applications such as district cooling or industrial processes for optimum utilization.
• Nuclear Generation:
In line with the provisions of SHANTI Act, 2025, adoption of advanced nuclear technologies, developing Modular Reactors, setting up Small Reactors, and use of nuclear energy by commercial and industrial consumers to achieve 100 GW by 2047.
• Hydro Generation:
Accelerated development of storage-based hydroelectric projects for flood moderation, irrigation, and water as well as energy security.
• Power Markets:
A strong regulatory framework for market monitoring and surveillance to prevent collusion, gaming, or market dominance.
• Transmission:
Adoption of latest technologies and suitable compensation for land use to address Right of Way (RoW) challenges.
Parity of transmission tariff with conventional power by 2030 for all types of new RE capacity.
Utilization-based framework for allocation of transmission connectivity, along with appropriate regulatory mechanisms to ensure optimal use and prevent speculative holding of connectivity.
• Distribution:
Measures to achieve single-digit AT&C losses.
Shared distribution networks to enhance competition and efficiency, while eliminating the requirement of duplication of network.
Establishment of a Distribution System Operator (DSO) to facilitate sharing of network and integration of distributed renewables, storage, Vehicle-to-Grid (V2G) systems.
N-1 redundancy at distribution transformer level in all cities with population more than 10 lakh by 2032. Such cities to be considered for undergrounding of distribution network in congested areas.
• Grid Operations:
Functional unbundling of State Transmission Utilities (STUs) and creation of independent state-level entities to manage SLDC operations and transmission planning functions.
Alignment of State Grid Codes with Indian Electricity Grid Code specified by CERC
• Cybersecurity:
Establishment of Robust cybersecurity framework.
Mandatory storage of power sector data within India to ensure data sovereignty and system resilience.
• Data Sharing:
Sharing of operational and market data under a framework prescribed by the Central Government.
Ensuring real-time visibility of Distributed Energy Resources to DISCOMs and SLDCs.
• Technology & Skill Development:
Transition to indigenously developed SCADA system by 2030.
Development of domestic software solution for all critical applications in the power system.
[Notification No. 23/23/2018-R&R]
