Power Division clears 800MW electricity wheeling auctions over five years

The Power Division has approved an annual auction framework for 800 megawatts (MW) of electricity to be traded through wheeling over a five-year period, beginning with an initial auction of 200MW in 2026, Business Recorder reported, citing officials familiar with the matter.

The approval fulfils the requirement under SD-87 of the National Electricity Plan and Rule 5 of the Supplier Rules, which mandate government-issued guidelines for wheeling auctions. These guidelines have now been cleared, paving the way for implementation.

Under the approved framework, the Independent System and Market Operator (ISMO) is required to submit the detailed auction process to the National Electric Power Regulatory Authority (Nepra) within seven days of the notification of the guidelines in the official gazette.

To speed up execution, ISMO has already prepared a draft auction process and held multiple consultative meetings with Nepra in December 2025. After incorporating feedback and written comments from the regulator, the draft process was finalised and placed before the Market Monitoring Committee in January 2026, which recommended its submission to Nepra for approval.

According to the approved plan, the auction schedule will be spread evenly after the first year. The proposed quantum includes 200MW in 2026, followed by 150MW each year in 2027, 2028, 2029 and 2030, bringing the total to 800MW.

The draft auction process outlines key elements including an annual auction calendar, bidding procedures, eligibility requirements, bid bonds and performance guarantees, allocation mechanisms in case of over- or under-subscription, post-award obligations, and monitoring arrangements.

Officials said the 200MW allocation for the first auction is intended to meet the expected demand from entities that have already submitted competitive supplier applications to Nepra. The remaining 600MW has been distributed evenly across subsequent years.

However, the approved figures represent a minimum threshold. Under the auction framework, ISMO may seek prior approval from the Power Division to increase the auctioned quantum in any year, depending on market demand.