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ISLAMABAD, Apr 23 (APP):Experts from various fields on Wednesday called for implementation of the long-delayed market reforms made under the head of the Competitive Trading Bilateral Contracts Market (CTBCM), which were also approved by the Economic Coordination Committee (ECC) and National Electric Power Regulatory Authority (NEPRA), followed by a six-month test run by the Central Power Purchasing Agency (CPPA).
The call was made during a high-level multi-stakeholder dialogue hosted by Renewables First (RF), which brought together senior government officials, legislators, regulators, development partners, and power sector experts to assess the financial and technical preparedness for operationalizing a competitive electricity market in Pakistan, said a press release.
During the event, stakeholders expressed concern that the power sector of the country remains entrenched in a single-buyer model, with CPPA-G as the sole purchaser and Discos holding exclusive distribution licenses, which has led to escalating capacity payments, underutilized generation assets, and suppressed private sector participation.
Ramsha Panhwar, Energy Analyst at RF, presented a critical overview of one of the most debated aspects of the CTBCM regime, Use of System Charge (UoSC).
She pointed out that the energy market has remained uncompetitive due to charges that have not been rationalized, making them unaffordable and excessively high.
The UoSC is a central pillar of the CTBCM regime, determining how market participants pay for access to the transmission and distribution networks, she said, adding that more than 80% of the proposed UoSC comprised of stranded costs and cross-subsidy, which exacerbates the overall power tariff.
She noted that by restructuring the UoSC, we can significantly lower the overall charge.
Salman Amin, a Member of the Competition Commission of Pakistan, highlighted the importance of free and fair competition in any sector and emphasized that Pakistan’s electricity sector must transition from a monopoly to a competitive regime.
Omar Haroon from CPPA informed the participants that the establishment of an Independent System and Market operator (ISMO), showed optimism for the launch of wholesale electricity within a few months.
Former Chairman NEPRA, Tauseef Farooqi, mentioned that the timely launch of a wholesale electricity market is intricately linked with Pakistan’s economy.
Experts from the National Transmission and Dispatch Company (NTD) emphasized the need to increase investments in ancillary services to ensure sustainable grid operations in view of increasing renewable energy penetration.
Speakers also explored how CTBCM intersects with broader economic and social goals, emphasizing its potential to improve industrial competitiveness through cost-effective procurement, support the growth of distributed energy solutions like rooftop solar and virtual power plants, and expand access for historically underserved consumers.