The caretaker government has directed the Power Division to amend the National Electricity Act of 1910, aiming to modernize the power sector and introduce a competitive electricity market.
This move targets the establishment of the Competitive Trading Bilateral Contracts Market (CTBCM), enabling private consumers to buy electricity directly from producers, a shift from the current system where all consumers are tied to the national grid, known for its inefficiencies and theft.
The National Electric Power Regulatory Authority (Nepra) has been working towards opening up the market with the CTBCM model, but progress has been sluggish. To address this, the Cabinet Committee on Energy (CCOE) has formed a committee to focus on wheeling charges – fees for using the grid to supply electricity from producers to consumers – and to provide recommendations swiftly.
The Power Division is also tasked with conducting an internal assessment with industry stakeholders, with findings to be submitted by mid-February 2024. This is part of a broader effort to transition from the existing single buyer model to the CTBCM, aiming to reduce losses and improve efficiency in the electricity supply chain.
The CCOE has expressed strong interest in these reforms and will directly monitor the implementation of the CTBCM plan, requiring the Power Division to submit monthly progress reports. This initiative marks a significant step towards revitalizing Pakistan’s power sector through regulatory updates and market competition.
Let’s see how the electricity reforms will unfold. By amending CTBCM, there’s potential for significant changes in the electricity market landscape. Allowing private consumers to buy electricity directly from producers could lead to increased competition and potentially address inefficiencies and theft often associated with the current national grid system.