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National Electricity Policy 2005

In compliance with section 3 of the Electricity Act 2003 the Central Government notified the National Electricity Policy. The National Electricity Policy aims at laying guidelines for accelerated development of the power sector, providing supply of electricity to all areas and protecting interests of consumers and other stakeholders keeping in view availability of energy resources, technology available to exploit these resources, economics of generation using different resources, and energy security issues.

The National Electricity Policy was evolved in consultation with and taking into account views of the State Governments, Central Electricity Authority (CEA), Central Electricity Regulatory Commission (CERC) and other stakeholders.

The aims and objectives of the policy are as follows

  1. Access to Electricity – Available for all households in next five years
  2. Availability of Power – Demand to be fully met by 2012. Energy and peaking shortages to be overcome and adequate spinning reserve to be available.
  3. Supply of Reliable and Quality Power of specified standards in an efficient manner and at reasonable rates. Per capita availability of electricity to be increased to over 1000 units by 2012.
  4. Minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012.
  5. Financial Turnaround and Commercial Viability of Electricity Sector.
  6. Protection of consumers’ interests.

National Rural Electrification Policy, 2006

The National Rural Electrification Policy was notified in compliance with Sections 4 & 5 of the Electricity Act, 2003 by the Central Government. The goals include provision of access to electricity to all households by the year 2009, quality and reliable power supply at reasonable rates, and minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012.

  1. For villages/habitations where grid connectivity would not be feasible or not cost effective, off-grid solutions based on stand-alone systems may be taken up for supply of electricity. Where these also are not feasible and if only alternative is to use isolated lighting technologies like solar photovoltaic, these may be adopted. However, such remote villages may not be designated as electrified.
  2. The state government should, within 6 months, prepare and notify a rural electrification plan which should map and detail the electrification delivery mechanism. The plan may be linked to and integrated with district development plans. The plan should also be intimated to the appropriate commission.
  3. The Gram panchayat shall issue the first certificate at the time of the village becoming eligible for declaration as electrified. Subsequently, the Gram Panchayat shall certify and confirm the electrified status of the village as on 31st March each year.
  4. The state government should set up a committee at the district level within 3 months, under the chairmanship of chairperson of the Zilla Panchayat and with representations from district level agencies, consumer associations, and important stakeholders with adequate representation of women.
  5. The district committee would coordinate and review the extension of electrification in the district and consumer satisfaction, etc.
  6. Panchayat Raj institutions would have a supervisory / advisory role.
  7. Institutional arrangements for backup services and technical support to systems based on non-conventional sources of energy will have to be created by the state government.


The future of electricity, rest on the pillars of affordability, sustainability and countrys energy security. In recent years the economic growth has become stagnant in many parts of developed world. With more and more energy efficiency coming to the fore, the demand curve of electricity in most of the developed world is either flat or showing a downward trajectory.

Whereas, Indias electricity consumption is going to quadruple from about 1.1 trillion units to about 4 trillion units by 2030. Despite the massive roll out of energy efficient schemes, we still see a possible 10% jump in the electricity growth annually for the next 15 or 16 years.

The fresh demand for power will come from the 230 million people who will get electricity for the first time, the elimination of diesel generation sets because of access to power and from increased economic activity coming from the Make in India campaign. Power consumption is expected to grow at 10% annually over the next 10-15 years and added that higher personal incomes and the emphasis given to domestic manufacturing activities will significantly increase power consumption despite the improvements in energy efficiency.

India has set a target of setting up 175 gigawatt (GW) of renewable energy generation capacity by 2022, out of which 100 GW is to come from solar. Solar power capacity, presently at 6.7 GW, will touch 20 GW by next year. Since the solar power sector is on track, the government will now focus on encouraging new hydropower and wind power capacity.

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