The cabinet committee on energy (CCOE) on Wednesday approved guidelines for wheeling auctions of 800 Megawatt (MW) aimed at opening electricity market.
Prime Minister Shahbaz Sharif chaired the CCoE.
The power division has prepared guidelines to allocate 800 MW quantum through competitive bidding. The mechanism will remain in effect for a period of 5 years.
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During the meeting, ministry of energy power division sought approval the of Framework Guidelines for Wheeling Auctions, 2025 to open electricity market.
The power regulator Nepra will complete the process of determining the uniform wheel charges by January 2026.
These Guidelines have been prepared through consultative process. Under this mechanism, the wheeling quantum of 800 MW will be allocated to those parties paying the highest contribution over and above the Grid Charges and Surcharges.
The ISMO with approval of NEPRA, shall issue an Auction Process that will include Auction Calendar, detailed procedure, etc. There shall be no upper or lower limit (cap or floor) on Bid Value. The Bid Value shall remain fixed during the payment period of 1 year.
Prescribes minimum eligibility requirements and while gives power to NEPRA to specify any additional requirements in Auction Process.
Meanwhile, power division said that The Cabinet Committee on Energy has issued a pivotal decision concerning integrated energy planning across the nation.
Previously, various federal and provincial entities responsible for energy matters undertook planning independently.
Pursuant to this decision, collaborative and cohesive planning shall be implemented with respect to the energy requirements, consumption patterns, and production capacities of both provincial and federal governments.
To facilitate comprehensive energy planning nationwide, a dedicated secretariat shall be established within the Power Division’s institution, the Power Planning & Monitoring Company (PPMC).
Consequently, all planning activities will henceforth be executed in a unified manner through a single entity and location.
This resolution will furnish policy-formulating institutions with robust and integrated support. During the Cabinet Committee’s session, the Power Division has been entrusted with this mandate.
The Power Division will thereby benefit from enhanced capabilities in national energy planning, encompassing the advancement of all energy sources, with particular emphasis on green energy initiatives.
In addition, the Cabinet’s Energy Committee has accorded another momentous historical endorsement today.
A consequential determination has been reached regarding electricity wheeling within the country, thereby laying the foundation for the inception and advancement of a competitive energy market.
In accordance with this decision, approvals have been extended to the competitive bidding process, participant engagement, and other pertinent aspects.
This encompasses authorization for the Competitive Trading Bilateral Contract Market (CTBCM) framework pertaining to electricity auctions.
Consistent with the government’s pledges, no further electricity procurement agreements shall be entered into.
The government has formally disengaged from electricity procurement activities. Subsequent to this decision, the competitive bidding procedure for 800 megawatts shall be initiated.
The aforementioned competitive process has been designed with transparency to maximize stakeholder participation.
Oversight of the auction has been delegated to the Independent System and Market Operator (ISMO), an entity under the Power Division.
During the meeting, prime minister also directed to complete the process of privitising the power distribution companies (Discos).
He also said that competitive tariff should be given to the industry for the growth. The prime minister also approved the comprehensive energy plan prepared with the consultation of the provinces and concerned ministries.
