ISLAMABAD: Pakistan has launched its first electricity wheeling auction, opening bids for 400 megawatts (MW) of power as the government moves to shift large consumers from the traditional single-buyer system toward direct deals with electricity producers.
Federal Energy Minister Sardar Awais Ahmad Khan Leghari announced on Sunday, Sept. 20, that the Power Division had issued Requests for Proposals for the first auction under the Competitive Trading Bilateral Contract Market (CTBCM).
The system will allow eligible electricity producers and consumers to negotiate power contracts directly while using the existing transmission and distribution network to deliver electricity. The government plans to eventually bring 800 MW of demand into competitive auctions, according to officials.
Under the new system, eligible industrial and other large electricity consumers will be able to choose competitive suppliers instead of relying only on their distribution companies.
Consumers with electricity demand of 1 MW or more are eligible to participate under the CTBCM framework. NEPRA says the system is designed to give bulk power consumers a choice between purchasing electricity from their distribution company or a competitive supplier.
The auction will use the country's existing power network. The move follows NEPRA's recent decision on Use of System Charges, a key regulatory step that cleared the way for open access to the electricity network and the first CTBCM auction.
The government says the new system could give businesses access to more competitive electricity prices and help reduce production costs. Officials also expect the reform to improve the competitiveness of Pakistani industries and support exports.
These are government objectives rather than guaranteed outcomes. The competitive market could also create more opportunities for renewable energy producers and other power suppliers to sell electricity directly to eligible consumers.
NEPRA's framework provides for charges related to the use of transmission and distribution networks.
The auction marks another step in Pakistan's long-planned transition from a single-buyer electricity model to a competitive wholesale market, with the goal of giving large consumers greater choice in how they purchase power.
