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EXPERTS CALL FOR URGENT REFORMS AT HIGH-LEVEL ENERGY DIALOGUE

EXPERTS CALL FOR URGENT REFORMS AT HIGH-LEVEL ENERGY DIALOGUE

On April 23, 2025, experts from government, regulators, development partners, and the private sector convened in Islamabad for a high-level multi-stakeholder dialogue hosted by Renewables First. The event focused on the implementation of long-delayed market reforms under the Competitive Trading Bilateral Contracts Market (CTBCM), approved by the Economic Coordination Committee (ECC) and NEPRA, followed by a six-month test run by CPPA.

Challenges in Pakistan’s Power Sector

Stakeholders noted that Pakistan’s electricity sector is still dominated by a single-buyer model, with CPPA-G as the sole purchaser and DISCOs holding exclusive distribution licenses. This model has contributed to:

  • Rising capacity payments for underutilized generation assets.
  • Suppressed private sector participation.
  • High tariffs for consumers due to uncompetitive charges.

    • Use of System Charge (UoSC)

    Ramsha Panhwar, Energy Analyst at Renewables First, highlighted the centrality of the Use of System Charge (UoSC) in the CTBCM framework. Key points included:

    • Over 80% of UoSC comprises stranded costs and cross-subsidies.
    • High charges make the energy market uncompetitive and tariffs unaffordable.
    • Rationalizing UoSC could significantly reduce overall power costs for consumers and industry.

      • Market Competition and Governance

      • Salman Amin, Competition Commission of Pakistan: Advocated for a transition from monopoly to competitive electricity markets.
      • Omar Haroon, CPPA: Highlighted the role of the Independent System and Market Operator (ISMO) in preparing for wholesale electricity operations.
      • Former NEPRA Chairman Tauseef Farooqi: Linked timely market launch to Pakistan’s economic growth.

        • Renewable Energy and Distributed Energy Integration

        Experts stressed that CTBCM can complement Pakistan’s energy transition by:

        • Encouraging distributed energy solutions like rooftop solar and virtual power plants.
        • Increasing industrial competitiveness through cost-effective power procurement.
        • Expanding energy access for historically underserved populations.
        • Promoting investments in ancillary services to sustain grid operations amid rising renewable energy penetration.

          • The dialogue underscored the urgency of implementing reforms to make Pakistan’s electricity sector more competitive, efficient, and inclusive, aligning with both economic and social goals.

          For more insights, visit Renewables First Power Market Initiatives.

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