India releases draft energy policy

India’s Ministry of Power has initiated a public consultation on a new Draft National Electricity Policy (NEP) 2026, which aims to meet the goals of the Viksit Bharat development strategy, and aligns with nuclear energy goals set out in the 2025–26 Budget and the recently enacted SHANTI bill. It will replace India’s first NEP, which dates back to 2005.

The 40-page draft NEP targets per capita electricity consumption of 2,000 kilowatt-hours (kWh) by 2030 and more than 4,000kWh by 2047, up from less than 1,500kWh in 2024–25. It aligns with India’s climate pledges, including reduction of emissions intensity by 45% below 2005 levels by 2030 and achievement of net-zero emissions by 2070.

Concerning renewable energy generation and storage, it aims for capacity addition through market-based mechanisms and captive power plants, as well as parity between renewables and conventional sources in scheduling and deviation by 2030.

India should also adopt advanced nuclear technologies, develop modular reactors, deploy small modular reactors, and enable commercial/industrial users to consume nuclear power to reach 100GW-electrical of nuclear capacity by 2047. Thermal generation is expected to be paired with storage, while older units are to be repurposed to help the system absorb a larger share of renewables.

NEP 2026 lays out strategies for achieving “reliable 24 x7 quality power through a financially viable and environmentally sustainable power sector furthering energy security at an affordable price”.

It aims to achieve the following objectives:

• Financial turn around and commercial viability of electricity sector.
• Ensuring adequate availability of power with reliable and quality supply, while meeting peak demand and energy requirements.
• A supply of electricity at competitive prices to achieve the vision of Viksit Bharat 2047.
• Increasing the share of non-fossil capacity to achieve the Nationally Determined Contribution targets.
• Promoting competition in supply of electricity.
• Increasing per capita electricity consumption to 2,000kWh by 2030 and more than 4,000kWh by 2047, ensuring energy efficiency and responsible usage.
• Strengthening grid resilience to enable large-scale renewable energy generation and utilisation, flexible operation, and to meet climate adaptation and cybersecurity needs.
• Enhancing consumer centric service and implement demand side interventions.
• Strengthening the dispute resolution mechanism in the sector to enable faster resolution and reduce financial burden on consumers.

The draft NEP says nuclear power is “a clean, reliable, and sustainable energy source with significant potential for India’s long-term energy security”. To expand the nuclear capacity to 100GW by 2047, the central government “will collaborate with the private sector for setting up modular reactors and developing Bharat Small Reactors, and advanced nuclear technologies”. Nuclear projects should be eligible for Green Bond funding.

Measures such as brownfield expansion, replacing coal-based captive plants with nuclear, where feasible, and fleet-mode implementation establishing local supply chains for cost optimisation with standardising reactor sizes will be considered. Retired thermal plant sites may also be repurposed for nuclear power wherever feasible. Large commercial and industrial consumers should be encouraged to use nuclear-sourced power. Designing for flexible operation and a two-part tariff of future nuclear plants may be explored. “These initiatives will be undertaken within the broader resource adequacy framework, while ensuring the nation’s energy security.”

The draft policy notes that India’s power sector will need Rs50tn ($546bn) by 2032 and Rs200,000bn by 2047 for generation capacity expansion, transmission and distribution. It states: “Energy security and transition hinges on access to affordable capital and blended financing, as renewable and nuclear projects involve high upfront investments but low operational costs.”

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