Draft NEP 2026 bets big on nuclear, tariff tweaks and cross-subsidy rules, Pg13

Key Highlights:

• Draft National Electricity Policy (NEP) 2026 emphasizes nuclear power as an alternative to coal-based thermal generation.
• The policy aims to increase India’s nuclear capacity to 100 GWe by 2047, a tenfold increase from the current 8.8 GWe.
• It proposes an index-linked automatic tariff revision to prevent revenue gaps for power utilities.
• Exemptions from cross-subsidy charges are suggested for manufacturing, Indian Railways, and metro rail systems.

Detailed Insights:

• The draft NEP 2026 succeeds the National Electricity Policy 2005, prioritizing advanced nuclear technologies like Small Modular Reactors (SMRs).
• This policy shift aligns with the SHAKTI Act, encouraging private sector involvement in the nuclear sector by removing regulatory obstacles.
• The policy targets increased per capita electricity consumption, projecting 2,000 kWh by 2030 and over 4,000 kWh by 2047.
• NEP 2026 focuses on the financial stability of distribution companies (discoms) through cost-reflective tariffs and reduced losses.
• The draft supports renewable energy through market mechanisms and captive power plants, emphasizing energy storage for grid stability.

Key Concepts Involved:

• Small Modular Reactors (SMRs): Nuclear reactors smaller in size and capacity than conventional reactors, offering flexibility and scalability.
• Cross-Subsidy: Practice of funding lower tariffs for some consumer categories by charging higher tariffs to others.
• AT&C Losses: Aggregate Technical and Commercial losses in the power distribution system, including theft and inefficiencies.