Key Takeaways
- NEPRA has determined the Use of System Charge, paving the way for industrial consumers to buy power directly.
- The Competitive Trading Bilateral Contract Market auction will soon commence, encouraging competition among suppliers.
- The new system aims to improve power generation efficiency and reduce reliance on imported fuels.
Pakistan has taken a significant step towards a more competitive electricity market, with the National Electric Power Regulatory Authority (NEPRA) determining the Use of System Charge, as announced by the Ministry of Energy.
Federal Minister for Energy Sardar Awais Ahmad Khan Leghari welcomed the decision, calling it an important milestone for the country’s power sector.
This regulatory step is the final major step needed for the Competitive Trading Bilateral Contract Market (CTBCM) auction to proceed, which is expected to open up the market for direct power purchases by eligible industrial consumers.
Under the new system, industrial consumers will be able to purchase electricity through bilateral agreements, allowing them to choose their preferred suppliers, thereby creating more competition among power providers.
The government anticipates that greater competition will lead to improved power generation efficiency and better prices for consumers, as well as a more efficient use of existing power plants.
Minister Leghari stated that the new market could also encourage the use of renewable energy and battery storage, while helping Pakistan make better use of cheaper local energy resources.
The new system is expected to reduce dependence on expensive imported fuels by promoting more efficient and cost-effective electricity generation.
NEPRA’s decision provides the regulatory framework needed for direct electricity access, representing a major structural change for Pakistan’s power market.
