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The Ministry of Power has sent the draft Electricity Policy (NEP) to the Union Cabinet for inter-ministerial consultations, said power secretary Pankaj Agarwal on Thursday at the 2nd Indian Power Sector Conference organised by Federation of Indian Chambers of Commerce and Industry (Ficci).
The draft, circulated in January 2026 for stakeholder comments, seeks to make the power sector financially viable, increase per capita power consumption to 4,000 kilowatt-hour by 2047, and promote competition in supply, apart from increasing the share of non-fossil capacity. The ministry-- through the draft NEP -- said that project bankability must be enhanced across the sector by deploying risk-mitigation instruments such as first-loss guarantees, reserve funds and multilateral guarantees from multilateral development banks.
Addressing the industry, Agarwal informed that the ministry has incorporated flexibility mandates in the policy to address grid stability concerns. Data centre and green hydrogen projects which are coming in are all gigawatt scale projects and can cause grid fluctuations, he said.
A grid flexibility mandate requires large electricity consumers—like massive data centres and AI clusters—to dynamically adjust, shift or reduce their power consumption when the local power grid faces peak stress or supply shortages.
The official added that the government will put in place the marketplace services. “Ancillary services market is yet to be defined. We need to work on this a lot,” he said.
For optimising right of way (RoW) clearance required for power transmission projects, the secretary emphasised on the development of multi-circuit lines from the beginning instead of making double circuit lines again and again. “This will optimise RoW, reducing it almost by half,” he said, adding that developing transmission lines multiple times also frustrates the farmers.
Highlighting that central electricity authority’s (CEA)’s long-term transmission planning provides sufficient visibility about the requirements in the next 5–10 years, he said, “I urge CEA to seriously look into this as it is not only ROW efficient, it is also cost efficient.”
Agarwal also said that serious work is required on the investment in equipment capacity expansion to avoid order delays. “We need to ensure that we not only design the application layer, but also try to design the core chips in our country. Some things can be done easily. Not everything is as complicated,” he noted.
He added, “Based on the discussions with some of the manufacturers and chip developers, I'm quite hopeful that by mid-2028, we can expect and mandate ‘design in India’ chips in our systems, and maybe even ‘make an India’ chip.”
Similar indigenisation can be done for the SCADA system, which is at the heart of the sector and has 38 softwares. Out of these, 19 softwares are there in our country. “We can also design the rest of the softwares,” he added.
On energy efficiency, he said that it is high time that the country deliberated on the idea of mandatory energy efficiency rating system for large building complexes.
