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Post at: Jul 10 2021

Draft National Electricity Policy (NEP)- 2021

Recent Context

  • On April 27, 2021, the Draft National Electricity Policy 2021 has been released by Ministry of Power.
  • The policy aims to make electricity available to all households in the next 5 years.
  • NEP 2021 will help to supply reliable and quality power of specified standards efficiently manner at reasonable rates.


  • In compliance with section 3 of the Electricity Act 2003 the central government notifies the National Electricity Policy (NEP). NEP is framed by Central Electricity Authority (CEA) once in 5 years andrevise the same from time to time in accordance with NEP.
  • The Central government shall, from time to time, prepare the NEP & tariff policy, in consultation with the state governments and the authority for development of the power system based on optimal utilization of resources such as coal, natural gas, & hydro etc.
  • The first NEP was formulated in 2005.

Why is the need of NEP

Objectives of NEP, 2021


Significance of the Policy

  • It will facilitate retail competition & consumer choice.
  • Accelerate supply mix transition away from coal towards renewables.
  • Enhance financial viability of sector, especially distribution companies.
  • Ensure socially & environmentally responsible generation.
  • Strengthen regulatory governance etc.


  • Electricity is an essential requirement for all facets of our life. It is a critical infrastructure on which the micro-economic development of the country depends. Thus, the NEP has introduced several new concepts starting from the need of micro grid in remote areas to having a real time power market & need for investment in pump hydro generation.                 


                                                    Yogesh Pratap Singh

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