ISLAMABAD: The Power Division on Friday formally unveiled the Competitive Trading Bilateral Contract Market (CTBCM)—a significant milestone toward establishing a transparent and competitive electricity market in Pakistan, long delayed for decades.
The Independent System and Market Operator (ISMO), a specialized arm of the Power Division, shared details of the auction framework for 800 MW of wheeling demand at a high-level workshop attended by key stakeholders from both public and private sectors. The architect of ISMO Dr. Fiaz Chaudhry was present on this occasion.
The main focus of today’s workshop on Understanding the CTBCM was the new Wheeling Auction process. The ISMO team explained that the government has set aside 800 MW of grid capacity for wheeling, which will be given out through competitive auctions over the next five years. ISMO, the Independent System and Market Operator, will be running these auctions to make sure the allocation is fair, open and fully transparent.
The procedure was explained step by step. First, companies will need to show that they are eligible: they must be registered, have the required interconnection studies, and in most cases have agreements with bulk power consumers. Those who qualify will then be invited to place bids. Each bid is expressed as a price in rupees per kilowatt-hour on top of the usual grid charges. ISMO will line up the bids from highest to lowest and keep awarding capacity until the quantum for that round is used up. If there are more bids than capacity, extra bidding rounds will be held to decide the winners.
The speakers also stressed the obligations after winning. Successful bidders will have to get the necessary licenses, sign contracts, and provide performance guarantees before starting wheeling. They will pay their bid price for one year on the actual energy wheeled, while grid charges and surcharges will still apply. Anyone failing to meet the commitments could lose their bond or even their allocation. From the way it was presented, this process marks a turning point: access to the grid for private deals will no longer be hidden or negotiated quietly, but decided in open competition.
Federal Minister for Energy, Sardar Awais Leghari, officially inaugurated the workshop and emphasized that CTBCM reforms are a cornerstone of Pakistan’s energy future.
“The foundation has now been laid to stabilize electricity prices and provide consumers with power at competitive rates. Export sectors will gain access to affordable and renewable energy,” Leghari said, declaring 2025–26 as the ‘Year of Service to Consumers.’
Addressing the participants, the Minister stated that the workshop marked a decisive step in reshaping Pakistan’s power sector.
He noted that ISMO has been entrusted with a critical mandate: operating the national power system as the system operator, administering the competitive electricity market, and leading long-term energy planning.
“These are ambitious tasks, but they are fundamental to securing Pakistan’s energy future—transforming how electricity is generated, traded, and delivered across the country,” he added.
Leghari reiterated the government’s commitment to creating a modern, transparent, and competitive electricity market that ensures affordable, reliable, and sustainable energy for all Pakistanis.
He described CTBCM as central to this vision, noting that it draws on global best practices to improve transparency, efficiency, and competitiveness in the power sector.
“This is not an experiment. This is a carefully planned reform that has been years in the making. And now, we are turning that vision into practical reality. The competitive market will become operational very soon,” Leghari announced.
A key highlight of the event was the unveiling of the Auction Framework, a core element of CTBCM implementation. The framework outlines a transparent, competitive mechanism for allocating 800 MW of wheeling demand to market participants.
“By inviting consultation on the auction guidelines and process, we aim to ensure the final documents reflect stakeholder perspectives and enable more effective auctions.” Leghari emphasized.
The Minister highlighted that the framework is not just about technical rules and procedures:
“It’s about building trust, encouraging new market entrants, and giving consumers real choices. Industrial bulk power consumers will especially benefit, as wheeling arrangements allow them to procure electricity directly from suppliers of their choice at competitive rates,” he highlighted.
Leghari stressed that this reform comes at a critical juncture as Pakistan aims to strengthen its economy, enhance industrial competitiveness, and create jobs.
“Reliable and competitively priced electricity is one of the most important enablers of economic growth,” he said.
The CTBCM, and especially the wheeling auction arrangements, are expected to: (i) facilitate the integration of renewable energy sources; (ii) reduce energy costs for industries; and (iii) provide export-oriented sectors access to green, reliable, and affordable power.
“This reform is not just about the power sector. It’s about the economy, the environment, and the wellbeing of our people,” the Minister asserted.
He encouraged active participation from all market stakeholders, including consumer groups, generators, suppliers, and investors, stating that their input is crucial in shaping a market that is fair, functional, and future-oriented.
“This is not a top-down reform. We are building a collaborative framework where every voice matters. The Government and ISMO are fully committed to an inclusive approach.”
Acknowledging the complexity of the reforms, Leghari noted that market design, technical regulations, and institutional coordination require careful planning and execution. However, he warned that inaction carries greater risks:
“Without reform, inefficiencies will persist, investor confidence will erode, and consumers will continue to suffer under a system that no longer meets their needs. We have a collective responsibility to ensure Pakistan does not fall behind but instead moves confidently toward electricity market liberalization.”
He was of the view that the Government of Pakistan stands firmly behind ISMO and NEPRA in operationalizing the CTBCM and implementing the Auction Framework. We will extend all political and institutional support needed for a successful transition.
“Together, we can ensure that this reform delivers on its promise: a power sector that is efficient, transparent, competitive—and capable of fueling Pakistan’s growth for decades to come,” Leghari said.
