The Ministry of Power has released the draft National Electricity Policy (NEP) 2026 for public consultation, marking a significant step toward transforming India's power sector. The comprehensive policy aims to replace the existing NEP that was notified in 2005, addressing evolving challenges and opportunities in the electricity landscape.

Sector Transformation Since 2005

India's power sector has witnessed remarkable progress since the first National Electricity Policy was implemented in February 2005. The installed generation capacity has increased fourfold with significant private sector participation, while universal electrification was achieved by March 2021. The country established a unified national grid in December 2013, and per capita electricity consumption reached 1,460 kWh in 2024-25.

Despite these achievements, the Ministry acknowledged that persistent challenges remain, particularly in the distribution segment. High accumulated losses and outstanding debt continue to plague the sector, while tariffs in several segments remain non-cost reflective. High cross-subsidisation has resulted in elevated industrial tariffs, adversely affecting the global competitiveness of Indian industry.

Ambitious Consumption Targets

The draft NEP 2026 sets ambitious targets for electricity consumption growth, aiming for per capita consumption of 2,000 kWh by 2030 and over 4,000 kWh by 2047. These targets align with India's climate commitments, including a 45 percent reduction in emissions intensity below 2005 levels by 2030 and achieving net-zero emissions by 2070.

Key Policy Interventions

Resource Adequacy and Financial Viability

The policy introduces comprehensive resource adequacy planning where DISCOMs and SLDCs will prepare plans at utility and state levels, while the Central Electricity Authority (CEA) will develop a corresponding national plan. Financial reforms include linking tariffs to suitable indices for automatic annual revision and progressively recovering fixed costs through demand charges to reduce cross-subsidisation.

Renewable Energy and Storage Integration

The draft policy emphasizes renewable energy capacity addition through market-based mechanisms and captive power plants. It promotes storage installation by distribution licensees for small consumers and enables peer-to-peer trading of surplus energy from distributed renewable sources. The policy targets parity between renewable and conventional sources in scheduling and deviation by 2030.

Sector-Specific Developments

The policy addresses various generation sources comprehensively. For thermal generation, it focuses on integration with storage and repurposing older units for grid support. Nuclear generation aims to achieve 100 GW by 2047 through advanced technologies and modular reactors. Hydroelectric development emphasizes storage-based projects for flood moderation and water security.

Infrastructure and Technology Modernisation

The draft includes significant infrastructure reforms targeting single-digit AT&C losses in distribution and establishing Distribution System Operators (DSO) to facilitate network sharing. Cities with populations exceeding 10 lakh will require N-1 redundancy at distribution transformer level by 2032, with consideration for underground networks in congested areas.

Cybersecurity and Data Management

Recognising modern challenges, the policy establishes robust cybersecurity frameworks with mandatory storage of power sector data within India to ensure data sovereignty and system resilience. It also promotes transition to indigenously developed SCADA systems by 2030 and domestic software solutions for critical power system applications.

The comprehensive draft NEP 2026 provides a blueprint for creating a future-ready, financially viable, and environmentally sustainable power sector designed to deliver reliable and quality power at affordable prices while supporting India's economic growth and climate objectives.

India's constitutional framework provides clear grounds for restructuring nuclear power oversight, with Article 77(3) mandating that government responsibilities be allocated among ministries without overlap. The ongoing debate centers on whether nuclear energy supervision should transfer from the Department of Atomic Energy (DAE) to the Ministry of Power.

Constitutional Mandate for Clear Allocation

The Constitution establishes specific requirements for government organization through Article 77(3), which empowers the President to make rules for convenient transaction of government business and allocation among ministers. This constitutional provision ensures accountability by requiring clear assignment of responsibilities across ministries through two comprehensive lists covering broad subjects and specific areas within each domain.

Strategic Integration with Power Grid Management

As nuclear power evolves from experimental capacity to mainstream baseload generation, integration with India's broader electricity portfolio becomes essential. The Ministry of Power currently manages thermal, hydroelectric, and renewable energy sources, creating a foundation for comprehensive energy oversight.

The proposed structure addresses grid stability challenges when solar and wind sources experience natural interruptions. Battery storage systems and flexible gas and hydroelectric sources would fill supply gaps, while nuclear and thermal plants provide consistent baseload power.

Capacity Planning and Efficiency Considerations

Source-agnostic management under the Ministry of Power would enable coordinated decision-making for capacity additions and reactor locations. Current DAE commissioning without integrated demand and supply analysis may result in inefficient resource allocation.

The Ministry of Power would determine optimal capacity requirements across different timeframes and geographical locations, ensuring nuclear development aligns with overall grid needs and demand patterns.

Regulatory Framework and Safety Oversight

The proposed restructuring maintains specialized safety oversight through the Atomic Energy Regulatory Board (AERB), which would retain responsibility for:

• Reactor operation monitoring
• Safety rule enforcement
• Regular inspection protocols

The AERB would ideally function as an independent regulator, receiving policy mandates from both the Ministry of Power and DAE while maintaining autonomous regulatory authority and parliamentary accountability.

Long-term Vision for Integrated Energy Management

The ultimate goal involves establishing a comprehensive energy ministry that encompasses hydrocarbons alongside thermal, nuclear, and renewable power sources. This integrated approach would support future grid developments incorporating traditional power sources with advanced battery storage systems, including vehicle-based storage solutions. Nuclear safety would remain under specialist oversight within this broader framework.