Nepra Approves Wheeling Auction Process
Pakistan’s power regulator NEPRA has approved the country’s first-ever wheeling auction process, clearing the way for competitive electricity trading under the new market regime and declaring Jan. 22, 2026, as the official start of commercial market operations.
The decision endorses the auction mechanism submitted by the Independent System and Market Operator (ISMO), allowing allocation of up to 800 megawatts of electricity through competitive bidding while ensuring recovery of stranded costs tied to market liberalization.
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The approval follows federal policy changes and the issuance of Framework Guidelines for Wheeling Auctions in January 2026. NEPRA said the process, shaped through stakeholder consultation, aligns with principles of transparency, non-discrimination and procedural fairness as Pakistan transitions toward a competitive electricity market.
Addressing key concerns, the regulator directed ISMO to improve transparency around transmission constraints by publishing an interim congestion disclosure note with each auction.
This is intended to guide bidders in the absence of a full transmission node assessment, which is expected by January 2027.
NEPRA also mandated conflict-of-interest declarations for all seven members of the auction committee and introduced anti-collusion safeguards, including a cap of 20% of total auctioned capacity per group. ISMO must publish aggregated auction data, including bids received and allocation outcomes, after each round.
The regulator upheld core parameters set by the government, including the 800 MW cap, one-year bid payments and absence of bid limits, noting these are not subject to revision.
The first auction is expected around June or July 2026, marking a key step in operationalizing Pakistan’s Competitive Trading Bilateral Contract Market (CTBCM).
Today marks a defining milestone in Pakistan’s power sector reform journey with the declaration of the Competitive Market Operations Date (CMOD),” Federal Minister for Power Sardar Awais Ahmed Khan Leghari said adding that this transition from a single-buyer model to a competitive, transparent, and market-based framework reflects years of policy development, regulatory strengthening, and institutional coordination. It signifies a decisive shift from reform design to implementation.
The competitive market is anchored in transparency, open and non-discriminatory access to the transmission network, and enhanced accountability across the electricity value chain. As part of a phased and responsible liberalization, the Government has approved the transition of 800 MW of demand to bilateral contracting through transparent, automated competitive auctions over the coming years. This progress has been made possible through the dedicated efforts and close collaboration of the Ministry of Energy (Power Division), NEPRA, ISMO, CPPA-G, PPIB, DISCOs, and other key stakeholders, whose contributions are sincerely appreciated.
This achievement reaffirms Pakistan’s commitment to strengthening governance, ensuring financial sustainability, and building investor confidence in the power sector. Moving forward, our focus remains on delivering a reliable, efficient, and future-ready electricity market that supports innovation, facilitates clean energy and drives long-term economic growth for the country.”