ISLAMABAD: The government has taken a major step towards transforming Pakistan’s power sector from the existing single-buyer model to a competitive electricity market, with industrial and large consumers set to gain the ability to purchase electricity directly from power producers.
Federal Minister for Power Sardar Awais Ahmad Khan Leghari, in a video message, said the government was practically moving out of traditional electricity procurement and would no longer have the role of centrally purchasing electricity from producers and selling it to consumers under the existing model.
The new mechanism will initially target industrial and large consumers, particularly those with electricity consumption exceeding one megawatt. Under the Competitive Trading Bilateral Contract Market (CTBCM), eligible consumers will be able to enter into direct electricity purchase arrangements with power producers on a competitive basis.
The minister said the initiative would establish a more transparent and competitive framework in which electricity producers and consumers could buy and sell power directly. The competitive market is expected to gradually expand in the coming years, providing consumers with greater choice in electricity procurement.
As a key step towards implementing the new system, the Power Division has issued a Request for Proposals (RFP) for Pakistan’s first-ever electricity wheeling auction. Under the proposed auction, 800 megawatts of electricity are planned to be auctioned over the next five years, with 400MW to be offered in the first phase.
The minister said the wheeling mechanism could provide industries access to electricity at competitive rates, helping reduce production costs, improve competitiveness in international markets and support higher exports.
The first wheeling auction will be conducted through a structured five-stage process comprising issuance of auction documents, eligibility evaluation, bid evaluation, approval of auction results and award of electricity quantum.
According to the Power Division, the issuance of the RFP represents an important practical step towards establishing a transparent and credible wheeling market. The process, including eligibility assessment, bid evaluation and award of quantum, will be conducted through a dedicated auction platform.
The Independent System and Market Operator (ISMO) has invited eligible participants to take part in the auction and will provide guidance materials and other resources to facilitate participation. ISMO will also release explainer videos covering the auction procedure, proposal submission requirements and use of the auction platform.
The RFP contains details of eligibility criteria, proposal requirements, prescribed formats, auction procedures and timelines. Interested participants have been advised to review the documents carefully and submit their proposals within the stipulated deadline.
The RFP and related documents are available on the ISMO website, while participants can submit queries and requests for clarification through the designated auction contact channel.
The development marks a significant step in Pakistan’s transition towards a competitive electricity market, with the government seeking to reduce its traditional role as an intermediary between power producers and large consumers.
Story by Naveed Butt
