Briefing Note: Draft National Electricity Policy, 2026

The Ministry of Power introduced the Draft National Electricity Policy (NEP), 2026. It replaces the 2005 policy and responds to new challenges such as financial stress of DISCOMs, large-scale renewable integration, and energy transition. It prioritises non-fossil generation, energy storage, and grid resilience.

Resource adequacy and planning: NEP 2026 shifts power planning to a decentralised model. DISCOMs and SLDCs will prepare their own resource adequacy plans. Energy Generation and Renewables: Aims to speed up the shift to clean energy by strengthening renewable purchase obligations (RPOs) and enabling VPPAs and bilateral contracts. Coal will continue to play a role in grid stability. Power Markets & Distribution: Promotes direct contracts and exchange-based trading. It targets DISCOM financial stress by promoting market-based procurement and gradually introducing competition through multiple licensees.

Market analysts describe the Draft NEP 2026 as an effort to move away from a rigid, coal-heavy system towards a flexible, market-driven power sector. However, groups like the All India Power Engineers Federation (AIPEF) have opposed the policy, arguing that private companies will use public networks while shifting losses onto state DISCOMs.