Powering reform: Electricity (Amendment) Bill, 2025 can light India’s energy future

India’s power sector has come a long way since the landmark Electricity Act, 2003, was enacted. It has simultaneously improved access to electricity, addressed energy security concerns, and laid the foundation for the country’s clean energy transition. The draft Electricity (Amendment) Bill, 2025, arrives at a critical time when the resolve to become a Viksit Bharat is firm and strong. Anchored in this vision, the Bill aspires to build a power sector that is financially resilient, environmentally sustainable, and capable of supporting globally competitive industries. It promises to revitalise the power sector to deliver on this ambition. Here’s how its intent can be turned into action.

First, the newly proposed Electricity Council must be empowered to truly align the Centre and the states. Establishing such a body is a bold and welcome step. Past attempts to amend the Electricity Act faltered largely due to limited political alignment on reforms. The Council’s role will be of an advisory nature, and its success will hinge on how its composition, functions, and mandate are defined once the act is enforced. Its design and secretariat functions must ensure a strong federal consultative process, enhance policy clarity, minimise overlaps between agencies, and foster trust among the institutions that govern and implement reforms.

Second, phasing in the proposed exemption from the universal service obligation can deepen competition without disruption. The proposed amendment allows power distribution companies (discoms) to exit their supply obligation for large consumers (above 1 MW), enabling them to easily source power directly from other suppliers like private generators, renewable energy producers. This could unlock further demand for round-the-clock clean energy and improve efficiency. Yet, a transitory period of about three years could help both discoms and consumers build confidence in the delivery and cost-benefits of alternate supply models. During this period, the Act should guide State Electricity Regulatory Commissions to define preconditions for interested consumers, including opt-out durations and compensatory mechanisms for discoms to maintain supply and network reliability for consumers to fall back on grid supply in case of contingencies.

Third, the Act should mandate the Government of India to notify a National Renewable Energy Policy (NREP). India is already adding ~30-35 GW of renewable energy capacity every year. It must at least double this pace urgently to meet the rising electricity demand affordably. But the lack of a comprehensive forward-looking policy framework is holding us back. A statutory NREP could advance clean energy as a foundation for Viksit Bharat. It must integrate renewable generation, storage, manufacturing, and workforce development under one framework, linking deployment goals with domestic value creation and green jobs. Anchoring such a policy in law would signal commitment and strengthen investor confidence in India’s clean-energy build-out. It would also synchronise central and state actions on transmission, storage, and market design. This is critical given recent shortfalls in grid expansion. The Ministry of Power, along with the Ministry of New and Renewable Energy, should be responsible for shaping and coordinating the implementation of such an NREP.

India’s electricity law shaped two decades of growth; its renewal must now power the next, and cleanly. The 2025 Bill can be that turning point—if ambition is matched by design, cooperation, and trust. True reform lies not in the letter of a law but in actions that it enables, when policy intent turns into public benefit.

[Disha Agarwal is Senior Programme Lead, and Prateek Aggarwal is Programme Lead at the Council on Energy, Environment and Water (CEEW). Views are personal.]

Disha Agarwal and Prateek Aggarwal.