Draft Electricity Policy 2026

GOVT RELEASES DRAFT ELECTRICITY POLICY 2026

Why in the News?

• Policy Release: The Ministry of Power released the Draft National Electricity Policy (NEP) 2026 to transform India’s power sector in line with Viksit Bharat @2047 vision, incorporating environmental considerations and impact assessments.
• Consumption Targets: The draft policy sets ambitious per capita electricity consumption goals, targeting 2,000 kWh by 2030 and over 4,000 kWh by 2047, while emphasizing the need for a pollution-free environment.
• Climate Alignment: The policy aligns electricity sector reforms with India’s climate commitments, including 45% reduction in emissions intensity by 2030, and introduces environmental clearance processes for new projects.

KEY FEATURES OF DRAFT NEP 2026

• Demand Expansion: The policy prioritises rising per capita electricity availability to support industrial growth, household needs, urbanisation, and digital infrastructure expansion, while adhering to environmental impact assessment guidelines.
• Sustainable Transition: It promotes a clean and future-ready energy mix, integrating renewable energy, storage solutions, and low-carbon technologies, in line with the precautionary principle for environmental protection.
• Financial Viability: The draft stresses improving DISCOM financial health through efficiency reforms, tariff rationalisation, and reduction of AT&C losses, while considering the polluter pays principle.
• Reliable Power: Ensuring round-the-clock, quality and affordable electricity for all consumers, including rural households and MSMEs, remains a central objective, with due consideration to coastal regulation zone norms where applicable.
• Policy Update: Once finalised, NEP 2026 will replace the National Electricity Policy 2005, reflecting two decades of technological, policy, and environmental jurisprudence evolution.

CLIMATE AND DEVELOPMENT LINKAGES

• Emission Reduction: Power sector planning is aligned with India’s target of 45% emissions-intensity reduction, supporting low-carbon economic growth and environmental democracy principles.
• Energy Security: Diversification of generation sources enhances energy security, reducing dependence on fossil fuel imports and price volatility, while promoting a pollution-free environment.
• Green Investment: The policy encourages private and public investment in clean energy infrastructure, supporting green jobs and innovation, subject to rigorous environmental clearances.
• Inclusive Growth: Affordable and reliable electricity access underpins inclusive development, particularly in underserved and remote regions, with consideration for Forest Conservation Act provisions.
• Long-Term Vision: The draft integrates power sector reforms with Viksit Bharat @2047, positioning electricity as a growth enabler while emphasizing sustainable environmental practices.