Digital rails for the energy sector

Electricity is only one part of the picture. The wider task is integration across the entire energy system, which spans more than a dozen ministries, several electricity regulators, and a range of fuels from coal and gas to hydrogen.

4 min readJul 6, 2026 05:07 PM IST

First published on: Jul 6, 2026 at 05:07 PM IST

When Prime Minister Narendra Modi chaired a meeting of the Economic Advisory Council a few weeks ago, the discussion ranged across fiscal management, ease of doing business, and the reforms required to keep investments flowing. One structural theme connects all of these: Energy.

Energy is more than one sector among many; it is the input cost of the entire economy. It shapes the margins of small manufacturers and what powers India’s data centres. Industry is the single largest consumer of electricity. Yet it pays amongst the highest power tariffs in Asia. For many millions, energy also remains a matter of basic access.

The power sector’s transformation over the last decade has been among the most far-reaching. India operates one of the world’s largest synchronous grids at a single national frequency. We have moved from chronic shortages to broad supply adequacy. NASA’s imagery of artificial light at night (ALAN) has shown India’s remarkable progress in making energy accessible to all in the last decade. We are also among the world’s largest producers of renewable energy. We reached 50 per cent of installed capacity from non-fossil sources in 2025, five years ahead of target. We are now working towards 500 GW of non-fossil power by 2030.

Over the past decade, the country has closed longstanding gaps in physical infrastructure, lowering the transaction costs of economic activity. The next substantial gains lie in digitalising how these systems operate.

The task now is to ensure that the data these systems generate can move securely across institutional boundaries, so that this investment delivers its full value. This shift, from building physical assets to drawing value from them through digitalisation, reflects a broader pattern in India’s recent development. Having built cross-sectoral digital public infrastructure in Aadhaar and UPI, India is now developing domain-specific platforms in health, agriculture, logistics, and recently, energy. These platforms share a common design. Aadhaar, UPI, and other digital public infrastructure did not replace existing institutions; each set common standards and provided a framework for securely exchanging information. This facilitated a competitive private ecosystem to operate and flourish, advancing financial inclusion at scale and giving rise to one of the world’s largest fintech ecosystems. The public sector provides the rails; providers build on them.

The India Energy Stack (IES), an initiative of the Ministry of Power, applies this approach to the power sector for the first time anywhere. IES is a shared set of specifications that enables every power-sector system to exchange data securely and verifiably, without custom integrations, so that the infrastructure already built can deliver its full value to citizens, utilities, and the economy. The design suits India’s federal structure: Electricity is a concurrent subject, and distribution is run by utilities that are owned or overseen by states. Hence, a shared, standardised way such as IES enables national coordination at scale. This interoperability can further leverage AI to forecast demand, balance a renewable-heavy grid, coordinate millions of distributed resources, and price power dynamically, helping India both power the AI economy and run a cleaner, cheaper energy system.

Electricity is only one part of the picture. The wider task is integration across the entire energy system, which spans more than a dozen ministries, several electricity regulators, and a range of fuels from coal and gas to hydrogen. The Integrated Energy Policy of 2006 made the case for whole-system planning presciently; the digital tools to act on it now exist. As institutional capacity for integrated energy planning is addressed, the India Energy Stack can provide a common data backbone and a coordinating mechanism that brings the many arms of government onto shared intelligence.

Few structural reforms offer as much leverage as those in energy: They strengthen external resilience, lower costs across the economy, prepare the sector for artificial intelligence, mobilise investment, and provide firm foundations for the next generation of Indian enterprise.

Sharma is chair, India Energy Stack, an initiative of the Ministry of Power. Kumar is head of programme, India Energy Stack and executive director, FSR Global