Govt makes battery storage mandatory for 800MW power wheeling auction

The government has decided to require Battery Energy Storage Systems as part of the planned auction of 800MW of surplus electricity capacity under the power wheeling framework, according to a news report.

Under the proposed arrangement, bidders using solar or wind generation will have to install storage equal to at least 10% of firm capacity. 

The Independent System and Market Operator (ISMO) has submitted the proposal to Nepra, which has invited stakeholder comments within seven days.

The auction is intended to begin Pakistan’s shift towards a competitive electricity market after more than three decades of delay. The government is currently consulting private-sector participants before finalising the bidding schedule.

ISMO said the storage requirement would help address grid curtailment and the duck curve, which occurs when solar users reduce demand from the grid during the day and return in large numbers in the evening.

The operator said its financial modelling showed that adding battery storage could improve returns for auction participants up to a certain level. Most stakeholders supported starting with a minimum requirement while preserving financial viability.

Although bidders will be required to install storage equal to at least 10% of firm capacity, they may opt for a higher proportion. ISMO said its modelling indicated that larger storage capacity could further improve project returns.

The operator noted that mature electricity markets generally provide information and allow investors to decide whether to install storage, while developing markets often impose mandatory requirements. It cited India, the Philippines, China and the Dominican Republic as examples.

ISMO has also proposed two other changes to the auction framework.

The first would allow it to extend the proposal submission deadline by around one month. The existing framework fixes the submission period at one month and does not provide flexibility for an extension.

ISMO said this power was needed because a significant number of prospective bidders could seek more time during the first auction.

The second proposed amendment would establish a Grievance Redressal Committee to hear complaints from bidders. It would include two independent members of ISMO’s board of directors along with representatives of the operator.

Under the current system, the same auction committee handles eligibility assessments and complaints relating to those assessments.

Nepra declared January 22, 2026, as the Competitive Market Operation Date, but the first auction has yet to be held. ISMO is also required to publish an annual auction calendar by June 15 for auctions planned in the following fiscal year.