The Ministry of Energy’s Power Division has welcomed the National Electric Power Regulatory Authority’s (NEPRA) determination of the Use of System Charge for open access users under the Competitive Trading Bilateral Contract Market (CTBCM) regime. The decision has been described as the final regulatory requirement before the Request for Proposal (RFP) for Pakistan’s first CTBCM auction can be issued.
The determination is expected to mark an important step in the development of a competitive electricity market in Pakistan. Once the framework becomes operational, eligible industrial consumers will be able to procure electricity bilaterally from suppliers of their choice. This will provide an alternative to the existing arrangement under which consumers purchase electricity from their respective distribution companies.
Federal Minister for Energy (Power Division) Sardar Awais Ahmad Khan Leghari described the determination as a historic milestone in the reform and modernization of Pakistan’s power sector. According to a press release, the minister credited coordinated efforts by the Power Division, NEPRA and other stakeholders for completing the regulatory requirement needed to move the competitive market framework forward.
The minister said the transition towards a competitive electricity market is a central part of the broader power sector reform agenda. Under this programme, the institutional, regulatory, technical and market requirements needed to move Pakistan away from the traditional single-buyer model have been put in place. The CTBCM framework is intended to create greater competition in electricity procurement and provide eligible consumers with increased choice over their electricity suppliers.
According to the Power Division, the potential benefits of competition could extend beyond industrial consumers. Greater competition in electricity procurement could support improved efficiency in the use of generation capacity and create stronger incentives for reliable electricity supplies at competitive prices. These changes could also help address inefficiencies across different parts of the electricity value chain and contribute to improvements for ordinary consumers over time.
The minister also highlighted the potential role of the competitive electricity market in supporting renewable energy and other emerging power resources. A functioning competitive framework could facilitate greater integration of renewable energy, battery storage and other flexible resources into the electricity system. This could support more effective use of indigenous and lower-cost energy sources while improving system reliability and reducing dependence on expensive imported fuels.
The first CTBCM auction is therefore being viewed by the Power Division as more than a regulatory or procurement exercise. Sardar Awais Ahmad Khan Leghari described the planned auction as part of a structural transformation of Pakistan’s electricity market. The move is intended to shift the power sector towards greater competition and a stronger consumer focus while providing a framework for electricity procurement based on market principles.
With the Use of System Charge determination now in place, the Power Division will focus on completing the remaining requirements needed to operationalize the competitive market. The ministry has said that the process will be carried out in a transparent and orderly manner as Pakistan moves towards the launch of its first CTBCM auction.
The development represents another step in the government’s broader efforts to reform the electricity sector. By establishing the regulatory and market requirements for bilateral electricity procurement, the CTBCM framework is expected to expand consumer choice, improve procurement efficiency and support the development of a more competitive and sustainable electricity system in Pakistan.
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