Govt asked to move to transparent, competitive electricity market

ISLAMABAD: Multi-Stakeholder Conference on Competitive Electricity Market in Pakistan has demanded the government to move away from a single-buyer model to a transparent and competitive electricity market.

The conference was organized by Renewables First and the Pakistan Business Forum (PBF), with the support of the Private Power & Infrastructure Board (PPIB). CEO of Renewables First Zeeshan Ashfaq and Tauseef H. Farooqi, ex-chairman NEPRA, highlighted the significance of moving towards a competitive electricity market.

The Competitive Trading Bilateral Contracts Market (CTBCM) is a thirty-year-old reform program which has been approved by the Economic Coordination Committee and NEPRA; however, it remains to be operationalized. Salman Amin, member of the Competition Commission of Pakistan, highlighted that the monopolistic structure of Pakistan’s power sector remains a major concern and with the help of CTBCM, the country can finally move towards competition and efficiency.

Abdul Rehman, Associate at Renewables First, explained the elements and history of the CTBCM reform, noting that the government has decided to launch the competitive electricity market with an initial 800MW, to be increased in the future. His remarks were followed by the first panel discussion featuring Tahir Basharat Cheema, former MD PEPCO; Amjad Ali Raja; and CEO Thar Energy Ltd HUBCO.

A participant, Cheema, stated that poor institutional decisions had crippled the power sector. Tauseef highlighted that the government failed to attract a single bid for a 600MW solar plant, while KE successfully completed an auction for 640MW. Both stressed that if the government eased its control and allowed private sector participation, it could generate funds and create business opportunities. Another key point raised was that the government must be transparent in its planning and operations, avoiding closed-door decision-making.

The second panel discussion observed that without serious reforms, the national electricity grid was headed for collapse, and the government must consult industrial stakeholders to figure out the way forward. They added that the weakest link in the power sector chain is the distribution companies; their performance is poor, pushing consumers to go off-grid. Ramsha Panhwar, researcher and energy specialist from Renewables First Power Market Team, informed the audience that over 80% of the proposed wheeling is composed of stranded costs and cross-subsidies, making open access prohibitively expensive.

In the conference, researchers and industrialists collectively demanded that the government provide a clear, consistent, and long-term plan for the recovery of stranded assets and ensure market growth under CTBCM. They also demanded that the government not limit the market size to 800MW, which was too small. “The market appetite is much larger,” said Mujtaba Haider, “and if provided fairness in wheeling and facilitation, the industry would happily participate.”

For further insights on competitive electricity market reforms and policy analysis, visit Renewables First Insights.