Pakistan Begins First Power Wheeling Auction, Offers 400MW

The federal government has launched Requests for Proposals (RFPs) for Pakistan's first electricity wheeling auction under the Competitive Trading Bilateral Contract Market (CTBCM), with Energy Minister Sardar Awais Ahmad Khan Leghari announcing that the government is moving away from directly purchasing electricity. Speaking in Islamabad on Sunday, Leghari said the new system would allow electricity producers and consumers to conduct transactions directly on a competitive basis. 'The government is practically exiting electricity purchases from today,' the minister said. The development follows the National Electric Power Regulatory Authority's (Nepra) approval of uniform Use of System Charges (UoSC) for open-access bulk electricity consumers. The decision allows eligible consumers to select their electricity suppliers. Leghari said 400 megawatts (MW) would be offered in the initial phase of the wheeling auction, while the government plans to take the total capacity offered through auctions to 800MW over the next five years. Under the new arrangement, businesses and industrial consumers will be able to purchase electricity directly from power producers through competitive transactions. Initially, the facility will be available to large consumers, with users requiring more than one megawatt eligible to participate. The minister said the government would neither purchase electricity from producers nor allow producers to sell electricity to it under the new market-based arrangement. He added that the electricity market would gradually expand, eventually giving ordinary consumers greater freedom to choose their electricity suppliers. According to Leghari, the shift is aimed at making power available to industries at competitive rates, helping Pakistani businesses improve their competitiveness in international markets and increase exports. He said the existing system was based on centralised government procurement and supply, under which the government purchased electricity and subsequently provided it to consumers. The minister also referred to longstanding concerns over the terms and conditions associated with electricity procurement, particularly contracts involving independent power producers (IPPs). In a separate post on X, Leghari said the government had put into practice a commitment that previous administrations had pursued for decades. 'Suppliers and consumers of power can now transact with each other,' he said, while announcing the invitation for proposals for the 400MW wheeling auction.