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Business Recorder
3 days ago
- Business
- Business Recorder
Govt to discuss issues facing businesspeople at every level: Sindh energy minister
KARACHI: Sindh Energy Minister Syed Nasir Shah stated that the government is standing with the business community. It has already established SEPRA for the provincial electricity matters and planning to discuss business communities' issues at the provincial and federal levels. He was speaking at a multi-stakeholder conference on Competitive Electricity Market organised by Renewables First and the Pakistan Business Forum (PBF), with the support of the Private Power & Infrastructure Board (PPIB), aimed at to set out a clear goal: to move beyond the monopolistic, single-buyer model towards a transparent, multi-stakeholder competitive regime, where electricity can be directly traded between producers and consumers. The conference began with a keynote speech from Chief Organiser PBF, Ahmad Jawad, CEO Renewables First, Zeeshan Ashfaq and Tauseef H Farooqi, ex-chairman NEPRA who highlighted the significance of moving towards a competitive electricity market for affordable electricity and Pakistan's economy. The Competitive Trading Bilateral Contracts Market (CTBCM) is a thirty year old reform program which has been approved by the Economic Coordination Committee and Nepra; however, remains to be operationalized. In the conference, Salman Amin, member Competition Commission of Pakistan highlighted that the monopolistic structure of Pakistan's power sector remains a major concern, saying with the help of CTBCM, we can finally move towards competition and efficiency. Abdul Rehman, Associate at Renewables First, explained the elements and history of the CTBCM reform, noting that the government has decided to launch the competitive electricity market with an initial 800MW, to be increased in the future. Other speakers including Tahir Basharat Cheema and Amjad Ali Raja emphasised the need to open the market for bilateral electricity trade to ensure fair competition and transparency. However, Junaid Naqi, President Korangi Association of Trade and Industry, Mujtaba Khan CEO Reon, Rehan Javed FPCCI, Saleha Hassan and others stated that without serious reforms, the national electricity grid was headed for collapse, and the government must consult industrial stakeholders to figure out the way forward. Highlighting the importance of clean, cheap, and reliable supply of electricity for the industries, they said that over 80 percent of the proposed wheeling is composed of stranded costs and cross-subsidies, making open access prohibitively expensive. Instead, the government must opt for a phased and transparent recovery mechanism which does not burden the ordinary consumers while at the same time making the wheeling charges attractive for industrial stakeholders. The moot demanded that the government provide a clear, consistent, and long-term plan for the recovery of stranded assets and ensure market growth under CTBCM. It also demanded that the government not limit the market size to 800 MW which was too small. The market appetite is much larger, and if provided fairness in wheeling and facilitation, the industry would happily participate. Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business
- Business Recorder
Multi-stakeholder moot: Call to dismantle single-buyer power procurement model
KARACHI: Business leaders, energy experts, and policymakers on Tuesday called for dismantling Pakistan's monopolistic single-buyer power procurement model in favor of a transparent and competitive electricity market, warning that without urgent reforms, the national grid faces mounting inefficiencies and rising costs. The demand came during a Multi-Stakeholder Conference on Competitive Electricity Market in Pakistan, jointly organized by the Pakistan Business Forum (PBF) and Renewables First, with support from the Private Power & Infrastructure Board (PPIB). The event gathered senior government officials, former energy regulators, industrial representatives, and researchers to discuss the operationalisation of the Competitive Trading Bilateral Contracts Market (CTBCM) — a reform framework approved decades ago but yet to be implemented. Sindh Energy Minister Syed Nasir Shah, speaking at the conference, assured the business community of the provincial government's support, noting that the Sindh Electricity Regulatory Authority (SEPRA) had been established to handle provincial electricity matters. He pledged to raise industry concerns at both provincial and federal levels. PBF Chief Organiser Ahmad Jawad, Renewables First CEO Zeeshan Ashfaq, and former NEPRA chairman Tauseef H. Farooqi underscored the CTBCM's potential to reduce electricity costs and improve economic competitiveness. 'We have a thirty-year-old reform program approved by the ECC and NEPRA, but it remains unimplemented,' Farooqi said, adding that private sector participation could unlock investment and efficiency. Competition Commission of Pakistan member Salman Amin warned that the current monopolistic setup hampers efficiency, stressing that CTBCM could pave the way for fairer market dynamics. Abdul Rehman, Associate at Renewables First, said the government planned to launch the market with an initial 800MW — a figure many participants criticized as too small for meaningful impact. In the first panel discussion, former PEPCO MD Tahir Basharat Cheema, Thar Energy CEO Amjad Ali Raja, and an Independent System and Market Operator (ISMO) representative stressed the need to allow bilateral electricity trade. Cheema blamed 'poor institutional decisions' for crippling the sector, while Farooqi noted that the government failed to attract bids for a 600MW solar project even as K-Electric completed a 640MW auction. The second panel — featuring industrial leaders including Korangi Association President Junaid Naqi, Reon CEO Mujtaba Khan, FPCCI's Rehan Javed, and PBF's Saleha Hassan — warned of systemic risk to the grid without structural reforms. Khan said poor-performing distribution companies were pushing consumers off-grid. Energy researcher Ramsha Panhwar highlighted that over 80% of proposed wheeling costs are tied to stranded costs and cross-subsidies, making open access prohibitively expensive. She urged a phased, transparent cost-recovery plan to avoid burdening consumers while encouraging industrial uptake. Participants collectively demanded a clear, long-term roadmap for stranded asset recovery, expansion of market capacity beyond the proposed 800MW, and transparency in government planning. 'The market appetite is far greater,' said industrialist Mujtaba Haider. 'Given fair wheeling terms and facilitation, industry will eagerly participate.' Closing the conference, PBF Karachi President Malik Khuda Bakhsh lauded the organizers and stakeholders for addressing critical reforms in the power sector. Copyright Business Recorder, 2025
Business Recorder
4 days ago
- Business
- Business Recorder
CTBCM: Electricity market that has never arrived
Delays, poor design, and lack of consultation with industries risk turning CTBCM into a missed opportunity for Pakistan's power sector and its industries. For years, Pakistan's power sector has operated on a single-buyer model that leaves industrial consumers with little to no choice, rising costs, and no meaningful competition in the sector. The Competitive Trading Bilateral Contracts Market (CTBCM) was supposed to change that. Approved by NEPRA in 2020, it promised to open the market so Bulk Power Consumers (BPCs), those using more than 1 MW, could buy electricity directly from generators at negotiated or cheapest prices. The vision was simple: competition would drive efficiency, private investment would flow, and tariffs would become more competitive. Billions have since been spent on training, IT systems, and legal frameworks to make this happen. Donors, consultants, and the market operator have put in years of work. Yet, five years later, the market is still not there. Therefore, the industry confidence is wearing thin. One of the biggest frustrations from businesses is the almost complete lack of awareness and engagement. Gurus sitting and making tariffs and decisions are absolutely unaware of ground realities of how industries in Pakistan operate, they seldom leave their air-conditioned offices to actually go and check the working and functionality of the industry. Beyond a handful of isolated efforts, a seminar at NED University led by then-Chairman Tauseef H. Farooqi, seminars, and efforts from Renewables First, and an analysis by Arzachel, there has been no sustained outreach. No consultation No regular workshops, no clear timelines, no detailed explanation of how the market will actually work. Many factory owners still don't know what CTBCM or Electricity is, let alone how to participate in it. There was one online consultation held in which the government and regulator's own officials kept throwing illogical comments and ideas at each other and industry was not even allowed to speak. While policymakers talk, industry is acting. In the last four years alone, Pakistan has imported over USD 4 billion worth of solar panels, with a record USD 2.1 billion in just the first half of 2024. Solar now often delivers electricity for under Rs 10 per unit, compared to Rs 30 or more from the grid. Large industrial zones, especially in Karachi, are covered in rooftop and ground-mounted solar arrays. And every month that CTBCM is delayed, more megawatts are locked into captive generation, shrinking the future customer base for the market before it even begins. This lack of urgency is paired with a lack of consultation. The Power Division never sits with industry when designing tariffs or market rules. ISMO is online, but there are 5 other agencies and departments overlapping the function of ISMO in different ways. That's how we end up with illogical structures like high-voltage industrial consumers (B3, B4) paying more per unit than low-voltage B2 consumers, which the Gurus of Power Division are still unable to understand, even though the former invest in their own transformers and save the grid significant costs. In the CTBCM process, the first real invitation for feedback only came in May 2025, when key rules and cost recovery mechanisms were already drafted. One such mechanism, forcing open-access consumers to pay for legacy capacity charges from old DISCO contracts, has been heavily criticized by industry groups like the Korangi Association of Trade & Industry. It violates the principle of open access and removes the very savings that would make the market attractive. Then, surprisingly, there's the proposed 800 MW cap for CTBCM's first phase. It's not in the NEPRA Act, the National Electricity Policy 2021, or the approved CTBCM design, yet it risks locking the market at barely 5% of national capacity. NEPRA has already warned that such a fixed limit could cause confusion and delay, and stakeholders think it will even lead to corruption. If there must be a cap, it should be auctioned transparently by NEPRA and expanded quickly if demand is strong. Wheeling charges are another red flag. The government's amended structure adds up to Rs 12.55 per unit before even adding a generator's bid price, largely because it includes policy and fiscal charges like the Rs 3.23 Debt Servicing Surcharge and Rs 3.47 cross-subsidy. These have nothing to do with using the network and, in many cases, are already being collected through other means. Internationally, such costs are kept out of wheeling to ensure open-access buyers aren't penalized for choosing competition. If Pakistan insists on loading them into wheeling, CTBCM will start life uncompetitive. There is a higher risk involved if this cross subsidy and DSS are made part of wheeling charges, they will be increased later on when open access becomes a reality because of the legendary and historic underperformance of the Power sector. There's also a missing piece in the current design: giving DISCOs and K-Electric the ability to compete as licensed suppliers. Power Division experts think it might become an obstruction for other competitive suppliers, but the reality is they can easily be managed with regulatory controls and checks. Right now, they're being boxed and forced into the role of 'supplier of last resort.' That might sound harmless, but it means they'll be left with only the least profitable consumers as the best-paying customers leave, which will blow up subsidy requirements and further erode performance. This is the biggest obstruction in Disco Privatization as well, as no one would want a disco with only loss-giving or subsidy-dependent consumers. In India and other markets, DISCOs compete for customers while also fulfilling last-resort obligations, creating an incentive to improve service and retain clients, thus requiring less subsidy. This is one of the biggest issues where the Minister of Power himself must take notice and even SIFC must intervene, ignoring the hue and cry of Power Division officials. Independent Power Producers (IPPs) also need more flexibility. If their contracts were amended to allow partial capacity sales into the competitive market, it would boost liquidity and give buyers more choice. DISCOs could play a larger role too, becoming active competitive suppliers. The more players in the market, from large generators to retail suppliers, the more competition, and with competition comes efficiency. If CTBCM is to succeed, the government must move from promises to delivery. That means announcing a clear go-live date, stripping non-network costs out of wheeling charges, fixing irrational tariffs, making any capacity caps transparent and flexible, empowering DISCOs and KE to compete, allowing IPPs to sell into the market, and involving industry in every step of the design. Without these changes, CTBCM risks becoming an expensive formality in a power sector already splintering into captive and off-grid solutions. With them, it could still deliver cheaper, more reliable power and finally put Pakistan's electricity market on a competitive footing. (The writer is an avid power sector expert and a leading industrialist from Karachi. He can be reached at rehanjawed@
Business Recorder
16-07-2025
- Business
- Business Recorder
Power wheeling policy for export industry: MoC seeks update from PD ahead of NEDB meeting
ISLAMABAD: The Ministry of Commerce has sought an update from the Power Division on the long-awaited electricity wheeling policy for the export industry, ahead of the National Export Development Board (NEDB) meeting scheduled for Thursday (July 17), to be chaired by Prime Minister Shehbaz Sharif. On July 22, 2024, during a previous NEDB session, the Prime Minister had directed that the wheeling policy for the export sector be finalized without further delay. According to the Commerce Ministry, the upcoming 4th NEDB meeting on July 17, 2025, will include a review of the updated status of the wheeling policy, with a particular focus on recommendations from the technical committee headed by the Special Assistant to the Prime Minister. These include proposals for viable wheeling charges. Accelerating Pakistan's livestock exports in global halal markets Sources said the success of the Competitive Trading Bilateral Contracts Market (CTBCM) hinges on two critical factors: the volume of available capacity and the level of wheeling charges. Wheeling charges are now expected to be reduced to Rs12/kWh, down from the earlier proposed Rs26/kWh. The All Pakistan Textile Mills Association (APTMA) has strongly advocated for electricity availability through business-to-business (B2B) contracts at wheeling charges between 1 to 1.4 cents/kWh, excluding cross-subsidies and stranded costs. APTMA argues that in the current economic climate, boosting exports must be a top national priority. The industry warns that uncompetitive power tariffs and emerging green energy regulations in export markets are serious threats to Pakistan's textile and apparel exports. A competitive wheeling mechanism under CTBCM is considered essential for the industry's recovery and long-term sustainability. The association has criticized the Central Power Purchasing Agency-Guarantee (CPPA-G) and distribution companies (Discos) for proposing an 'absurd' wheeling charge of 9.6 cents/kWh, saying it defeats the purpose of CTBCM and market liberalization. APTMA notes this rate is even higher than the full electricity tariffs for export sectors in competing countries such as: (i) Bangladesh: 8.6 cents/kWh; (ii) India: 6 cents/kWh; and (iii) Vietnam: 7.2 cents/kWh APTMA has also raised concerns about Rule 5 of the Eligibility Criteria (Electric Power Supplier Licence) Rules, 2023, which it claims undermines NEPRA's authority to independently determine fair wheeling charges. The rule reportedly allows the Power Division to dictate both the structure and amount of wheeling charges. Reiterating its long-standing demand, APTMA has called for a regionally competitive power tariff of 9 cents/kWh, citing both regional benchmarks (5–9 cents/kWh) and domestic cost-of-service studies, which show that tariffs for 83–84% of Pakistani consumers are already around that level. NEPRA's recent determination supports this demand, with industrial base rates for July 2025 set at: (i) Rs21.65/kWh (off-peak); and (ii) Rs30.76/kWh (peak). These rates roughly translate to 9.5 cents/kWh before the application of cross-subsidies. On renewable energy wheeling, APTMA claims that the current wheeling rate of 4.5 cents/kWh makes CTBCM implementation economically unviable. It notes that even for a textile unit operating three shifts a day, only about 20% of energy needs can be met through wheeling at a viable cost (~8 cents/kWh). Copyright Business Recorder, 2025
Express Tribune
24-04-2025
- Business
- Express Tribune
Competitive power market faces delays
Listen to article Despite approvals from the Economic Coordination Committee (ECC) and the National Electric Power Regulatory Authority (Nepra), following a six-month test run by the Central Power Purchasing Agency-Guarantee (CPPA-G), the Competitive Trading Bilateral Contracts Market (CTBCM) has yet to become fully operational. Leading stakeholders from across Pakistan's energy and policy landscape convened a high-level multi-stakeholder dialogue hosted by Renewables First (RF) to discuss financial and technical readiness for the operationalisation of a competitive electricity market, a reform process that has shown accelerated progress in recent years. The event brought together senior government representatives, legislators, regulatory bodies, development partners, and power sector experts to chart a path forward for implementing the long-delayed market reform under the CTBCM. The CTBCM reform has already been approved by the ECC and Nepra, followed by a six-month test run by CPPA-G. However, its commercial operation has not begun to date. During the event, the stakeholders expressed concern that the power sector of Pakistan remains entrenched in a single-buyer model, with CPPA-G as the sole purchaser and distribution companies (DISCOs) holding exclusive distribution licences. This structure has led to escalating capacity payments, underutilised generation assets, and suppressed private-sector participation. Ramsha Panhwar, energy analyst at Renewables First, presented a critical overview of one of the most debated aspects of the CTBCM regime: the Use of System Charge (UoSC). She pointed out that the market has remained uncompetitive primarily because these charges have not been rationalised, making them unaffordable and excessively high for market participants. "The UoSC is a central pillar of the CTBCM regime, determining how market participants pay for access to the transmission and distribution networks. However, more than 80% of the proposed UoSC comprises stranded costs and cross-subsidy, which exacerbates the overall power tariff. It directly affects the economics of open access and competitive supply," said Panhwar. "Rethinking the UoSC with a planned and phased recovery of stranded costs reduces the overall UoSC, making it attractive and affordable for the market participants."
