ISLAMABAD: Process for conversion of Central Power Purchasing Agency-Guarantee (CPPA-G) from its current role of billing and financial agent of distribution companies to independent operators of Pakistan’s power market has kicked-off.
An application in this regard was accepted by National Electricity and Power Regulatory Authority (Nepra) in July last year and a public hearing in this regard will be held on March 6th, 2018, reported Dawn.
Once converted, CPPA-G will hold portfolio of managing buying and selling of electricity at market rates ranging from power generation to transmission and distribution companies and allow third-party private players to enter the fray.
The government has decided to implement the Turkish model of power market regulation which are expected to come into place by 2020 under several covenants from international lenders.
Due to this, CPPA-G will be required to formulate, execute and expand critical functions like corporate planning, strategy, information technology, power demand and supply forecasting system and taxation.
The public hearing next month is being conducted to grant CPPA-G a licence in this regard by Nepra.
In line with Turkish power market reforms, which exhibited similar tendencies like those being experienced by Pakistan which included non-payments, cash-flow issues, high losses etc, the authorities intend to replicate it here.
Turkey embarked on the path of reforming the power sector by unbundling of power sector entities and created an independent market operator and roughly two dozen distribution companies.
Currently, Turkey has a independent and private market operator in place alongside a transmission operator besides private and public generators etc.
The Turkish authorities declared market sector reforms brought liberalization and introduced a transparent market regime which helped private investments in power sector to multiply exorbitantly and no investment needed sovereign guarantees from the government as was the case previously.
It added the Turkish power market was inching towards total freedom in which consumers can initiate bilateral contracts for power procurement from whichever it retail company or generator it desires.
Before these reforms were put in place, the Turkish power sector losses in some areas crossed over 80 percent and non-collection was a major bone of contention. But these power sector reforms in Turkey greatly decreased electricity losses and highest losses presently stood below 40 percent.
CPPA-G is busy formulating its integrated business plan for its conversion to an independent market regulator.
The CPPA-G is currently in the process of preparing its integrated business plan to lay out scope, time
