Nilekani Predicts Energy To Be Next UPI: Digital Energy Grid Revolution Explained

Nandan Nilekani, co‑founder and chairman of Infosys, predicts that India's energy sector will witness the next revolution, similar to how UPI transformed banking transactions.

Speaking at the Arkam Annual Meet 2025 in Bengaluru, Nilekani remarked that millions of small‑scale energy producers will help create a new "Digital Energy Grid" (DEG) to enable seamless energy exchange across the country.

He noted that currently, people are accustomed to purchasing energy in small amounts. For example, residents in villages collect wood from forests while others buy coal for daily use. When an LPG cylinder is purchased, the buyer is essentially purchasing energy in a packaged form contained within the cylinder. Traditionally, electricity has been viewed as a commodity supplied by the grid; if grid access is unavailable, individuals rely on generators that burn fuel to produce power. However, according to Nilekani the future of energy will be different.

“Every home will generate energy because of rooftop solar panels. Every home will store energy because of EV batteries. So, every home will become a producer of energy, a seller of energy and a buyer of energy. And these energy trades may not always be with the grid—they could be with your neighbour. In the future, buying and selling energy will function like UPI. This means we will create millions of energy entrepreneurs, each investing in small‑scale energy production and selling to others,” Nilekani said.

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Traditional Energy Model

The traditional model of energy transmission in India involves a centralised grid system that transmits electricity from power generation stations to consumers through high‑voltage transmission lines.

In this system, power‑producing facilities such as coal, hydroelectric and nuclear reactors are used to generate electricity at a large scale and transmit it to consumers across the country. This strategy ensures a steady and reliable power supply nationwide through coordinated management of generation and distribution.

India has also implemented the Market‑Based Economic Dispatch (MBED) mechanism, which centralises power scheduling and dispatch to optimise resource utilisation and reduce costs. This initiative aligns with the government's "One Nation, One Grid, One Frequency, One Price" strategy, which aims to achieve uniform power pricing and increased market efficiency.

While the centralised model has met India's energy demands effectively, it also faces some challenges such as transmission losses and the need for large infrastructure investments. To overcome these challenges and integrate renewable energy sources, India is exploring a hybrid approach.

This approach aims to combine the centralised generation with decentralised distributed energy resources. This strategy is designed to build a more resilient and sustainable energy system, one that can accommodate the growing share of renewables in the overall energy mix.

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Digital Energy Grid: A Possible Alternative

The digital energy grid (DEG) is a shift away from centralised power plants toward decentralised energy production. It enables homeowners to generate electricity through methods such as rooftop solar panels.

A digital trading platform within the DEG would allow consumers to buy and sell excess energy directly, promoting peer‑to‑peer transactions and enhancing the efficiency of energy distribution.

Democratising energy production through the DEG is expected to stimulate entrepreneurship and economic growth in a manner similar to the transformative impact of India's Unified Payments Interface (UPI) on the financial sector.

By integrating cutting‑edge technologies such as artificial intelligence (AI), the internet of things (IoT) and digital public infrastructure, the DEG will facilitate real‑time management and optimisation of energy flows. Overall, the DEG reimagines energy generation and distribution with the goal of creating a more robust, efficient and equitable energy market in India.