By SKM
January 19, 2025
ISLAMABAD: The government is currently in the process of making its plan to sell the cheaper surplus electricity to bulk consumers at the auctioned prices for 2-3 years.
“Under the plan, we will first fix the reference price of the electricity and the interested parties would be asked to come up with bids for surplus electricity not less than the reference price,” senior officials of the Energy Ministry told Exclusivewaves.com.pk.
“This will help tackle the monster of capacity payments also. The installed capacity of the country has reached 45,888 MW. The peak summer demand stands at 29000MW, but the system is not able to transmit the 29000 MW of electricity, rather it is able to transmit the 26000MW electric power. However, the average per month demand stands at 11000-12000MW. We need to increase the demand of the grid electricity in all the months across the country.”
“The officials of Central Power Purchase Agency (CPPA) and National Transmission Despatch Company (NTDC) are also currently working on the implementation mechanism and reference price.”
The major client can be the industrial, sector for getting the surplus power at an auctioned price for 2-3 years. The country has cheaper electricity in southern part of the country which cannot be transmitted to the north—Punjab, the load center, mainly because of the transmission constraints, but the government is paying the capacity payments of even cheaper power which, is available but cannot be evacuated. So the surplus power can be offered to the clients at auctioned prices and this is how the government would reduce the burden of the capacity payments and the surplus electricity would be brought in use.
“We are also working on the creation of the wholesale private power market by March-April to be followed by the retail private power market. Once the CTBCM is in place and becomes functional, the government would not purchase the electricity from the IPPs which signed the revised contracts on take and pay basis. They would be free to join the CTBCM (competitive trading bilateral contract market).” This could be a paradigm shift in the existing power sector structure.
Under this competitive regime, there will be a system of multi-sellers and multi-buyers of electric power.
However, buyers will pay the transmission and distribution use of system charges also for the electricity they will trade bilaterally. Currently, the power sector investments are dominated by the government that, also owns the power plants and sells electricity to the end consumers under a monopoly structure through its Discos having control on the network and supply business.
The consumers have no choice but to purchase electricity from the government-owned Discos.
So under the new competitive market implementation, bulk electric power consumers will be able to buy electricity from any private supplier, traders and generation companies at the electric power rates bilaterally agreed by parties with no Nepra determination involved and after including the wheeling charges as determined by Nepra for the use of transmission and distribution. Ends
