Draft National Electricity Policy set for inter-ministerial consultation
The new policy emphasizes on grid flexibility amid growing renewable energy integration and potential demand from data centres and green hydrogen plants
The Union power ministry in New Delhi has submitted the draft National Electricity Policy 2026 for inter-ministerial consultation, according to power secretary Pankaj Agarwal. The policy, set to replace the existing 2005 policy, focuses on grid flexibility due to increased renewable energy integration and potential demand from data centers and green hydrogen plants.
The draft policy emphasizes index-linked tariff revisions, with state electricity regulatory commissions (SERCs) to devise the index and its nature and methodology. Tariffs must be linked to a suitable index for automatic annual revision, starting FY27, and true-up orders for the previous fiscal year must be issued within the current year.
The policy aims to eliminate regulatory assets by ensuring tariffs fully reflect costs. It also proposes to open up the power distribution sector, allowing multiple players within a single distribution area through public-private partnerships (PPP) and listing of utilities. The draft policy suggests that monopoly in distribution will be phased out, with state commissions permitted to allow multiple licensees in the same areas.
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