National Electric Power Regulatory Authority (Nepra) Chairman Tauseef H. Farooqi said on Friday the Competitive Trading Bilateral Contract Market (CTBCM) will be rolled out in April next year.
Addressing a webinar on the future of energy organised by Nutshell Group, Mr Farooqi said the fact that the government is the only buyer of electricity from independent power producers and generation companies has created inefficiencies in the power sector.
Electricity buyers of one megawatt and more will have the option to buy power on a competitive basis from any producer of their choice after the advent of the CTBCM.
“We have to liberalise the power market and bring in competition,” he said, noting that getting the government out of the power business will bring the unit prices for consumers down while modernising the whole system.
He said the government and the regulator had gone into overdrive in preparing for the upcoming transition. “We’ve identified 19 stakeholders, including 10 distribution companies (Discos) and the National Transmission Despatch Company, which are responsible for the delivery of the CTBCM,” he said.
He said the regulator was in the process of hiring human resource from Discos and the private sector. Groups of 20-22 people will be set up in every Disco to look after the contracts management and demand forecast functions. “These people will serve as the nucleus of the CTBCM.”
He said a wheeling charge of about Rs2 per unit will help bulk consumers obtain electricity from any producer across the country.
Speaking on the occasion, Central Power Purchase Agency’s Head of Strategy and Power Omer Haroon Malik said shifting to a competitive regime from a single-buyer system was a Herculean task. “We’re talking about amending the legal, policy and regulatory frameworks. A large number of documents are being changed — from the Act and the rules to the regulations and the codes,” he said, noting that the transition involves institutional restructuring in about 15 participating government-owned entities. “There are about 300-plus professionals that are being trained for the CTBCM. Preparing a team of professionals is the most important part of this transition,” he said.
Three products will be traded on the CTBCM, namely energy, capacity and ancillary services. The CTBCM will have sellers, buyers and traders of electricity. Traders will be barred from selling directly to the consumers.
“Moving forward, all the (power) procurement will be done through an auctioneer in the market through competitive auctions, which will bring improvement in terms of pricing for end consumers,” he said.