Google "gun drill". They're designed to drill straight and not drift, but work best when connected to an air compressor.

Cutting a dado and gluing in a strip might be an easier approach, if you can accept the glue lines.

Are you putting "lighting in railing posts" or just routing the wires through the posts to the top for a light on top of the post? The way its worded I pictured posts with lights in them but thinking you mean lights on top with the wires through the post.  Another option if you want lights "IN" the post is the aluminum LED channel.  I can visualize many different options or possibilities for the channel.  I kind of love that stuff for a clean modern look if thats what you are after.

Thanks all for the responses!

I added a little sketch.

Plan was to use a "recessed wall led" (outdoor approved), see picture.

Obvisouly the hole doesn't need to be dead straight, as long it doesn't come out the side 

I think its doable.  I would cut some or use some scraps of the same material and drill a hole same size as the bit dead center. lets say your material is 4x4 for example.  cut 3 or 4 blocks 4x4x4 drill hole dead center in all.  set a long straight edge up on the bench  and clamp your post at far end and space your blocks (also along the straight edge) so everything is flat and in line.  Clamp the blocks along the straight edge too.  These are your drill guides.   stand at the other end and drill into the post. each time you get 10-12 inches deep unclamp the post and slide it closer and remove a guide block as need or slide them down to.  Cant guarantee it but its working in my head which is usually 70/30 or 80/20.  Otherwise I would split in half route and glue or miter fold a post cover to wrap around it.  Hopefully my words made sense if not let me know and I will try to sketch something.

I’m of the opinion that 20 mm auger bit will run truer with less wander than a regular bit.

Consider drilling a bit more than half way from the top and then come in from the bottom to finish. When I’m drilling lamp bodies and need to have both holes in certain spots that’s what I have found works. But I’m using a 3/8 and 1/2 regular bit.

Ron

I’m of the opinion that 20 mm auger bit will run truer with less wander than a regular bit.

Consider drilling a bit more than half way from the top and then come in from the bottom to finish. When I’m drilling lamp bodies and need to have both holes in certain spots that’s what I have found works. But I’m using a 3/8 and 1/2 regular bit.

Ron

I'm with Ron on this one, however I would definitely start the hole with a drill press and go down at least 6"-8" before switching to the long ship auger. Milwaukee makes this ship auger bit AD 20 x 600 with a working depth of 530 mm. The large number of flutes will act as a guide and prevent the drill from moving off center, however it has to be started straight to begin with, thus the need for a drill press.

It's made for timber framing and it will get hot so let it cool down between holes.

Use a woodowl tricut drill bit. These are the best money can buy.. they self feed..stay true and cut like butter.