COMPETITIVE POWER MARKET FACES DELAYS

Karachi: Despite approvals from the Economic Coordination Committee (ECC) and the National Electric Power Regulatory Authority (NEPRA), following a six-month test run by the Central Power Purchasing Agency-Guarantee (CPPA-G), the Competitive Trading Bilateral Contracts Market (CTBCM) has yet to become fully operational.

High-Level Dialogue on Market Readiness

Stakeholders from Pakistan’s energy and policy sectors convened in a multi-stakeholder dialogue hosted by Renewables First to discuss the financial and technical readiness for operationalising a competitive electricity market. The event brought together government representatives, legislators, regulators, development partners, and power sector experts to chart a path forward for the long-delayed reform.

Challenges in Pakistan’s Power Sector

Experts noted that the power sector remains dominated by a single-buyer model, with CPPA-G as the sole purchaser and distribution companies (DISCOs) holding exclusive distribution licences. Consequences include:

Escalating capacity payments

Underutilised generation assets

Suppressed private-sector participation

Use of System Charge (UoSC)

Ramsha Panhwar, energy analyst at Renewables First, highlighted the Use of System Charge (UoSC) as a central pillar of the CTBCM regime:

Over 80% of UoSC comprises stranded costs and cross-subsidy, increasing overall tariffs.

Unrationalized charges make the electricity market uncompetitive and unaffordable.

Phased recovery of stranded costs could reduce UoSC, improving attractiveness for market participants.

“The UoSC directly affects the economics of open access and competitive supply. Rationalizing it in a planned and phased manner would make participation in the market more viable,” Panhwar added.

For full coverage, visit the original report at The Tribune.

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