BID TO ALIGN WITH VIKSIT BHARAT GOALS

Policy proposes tariff reforms, progressive reduction of cross-subsidies & differential pricing during peak hours

Draft National Electricity Policy 2026 unveiled, first major update since 2005, focusing on long-term power sector planning and financial health of discoms.

Targets: Per capita electricity consumption of 2,000 kWh by 2030 and 4,000+ kWh by 2047 (from 1,460 kWh in FY25).

Tariff Reforms:

• State regulators to ensure cost-reflective tariffs without creating regulatory assets.

• Annual tariff linked to an index for automatic revision if orders are delayed.

• Reduction of cross-subsidies, no tariff below 50% of average cost, peak-hour differential pricing.

• Exemptions for manufacturing, Indian Railways, metro rail to maintain competitiveness.

Distribution & Transmission:

• Encourages shared distribution networks for competition and multiple distribution licensees.

• Proposes a distribution system operator model.

• Risk-sharing mechanisms for mismatched timelines between generation and transmission.

Generation:

• Renewable energy: enforce consumption obligations, enable virtual PPAs, improve forecasting via national meteorological portal.

• Grid parity between renewable and conventional sources by 2030.

• Nuclear projects eligible for green bond funding, brownfield expansions, fleet-mode deployment, and local supply chains.

• Incentives for domestic battery cell and energy storage manufacturing.

• Retired thermal plant sites may be repurposed for nuclear power.

Financing:

• Estimated ₹50 lakh crore by 2032 and ₹200 lakh crore by 2047 for generation, transmission, and distribution.

• Dedicated platforms under NaBFID and NIIF, risk-mitigation instruments, reserve funds, multilateral support.

• Explore climate finance taxonomy to unlock concessional green funding.

Power Market:

• Market mechanisms: bilateral contract settlement, standardized exchange-based contracts, PPAs via power exchanges.

• Phased capacity markets and expanded ancillary services, including demand response.