The government has started a major reform of Pakistan’s electricity market, allowing eligible consumers to buy electricity directly from power suppliers instead of relying only on their local distribution company.
Under the Competitive Trading Bilateral Contract Market (CTBCM), electricity suppliers and consumers can enter into bilateral agreements, creating a more competitive power market in Pakistan. The government has also begun the country’s first electricity wheeling auction, with 400 MW offered in the first phase.
How Will the New Electricity System Work?
Previously, Pakistan largely operated under a single-buyer electricity model, where electricity was purchased through the central system and supplied through distribution companies.
The new competitive market allows eligible consumers to choose their electricity supplier and negotiate electricity supply through the market. NEPRA says the CTBCM framework was designed to provide choice to bulk power consumers, initially those with a load of 1 MW or more.
Who Can Buy Electricity Directly?
The system is initially focused on industrial and large electricity consumers rather than every household. The government has said that the benefits could eventually extend to ordinary consumers as Pakistan moves toward a more competitive electricity market.
What Could Change for Electricity Consumers?
The competitive electricity market is intended to:
- Give eligible consumers more choice of electricity suppliers
- Encourage competition among power suppliers
- Improve efficiency in electricity generation and supply
- Support renewable energy and battery storage
- Create opportunities for negotiated electricity contracts
- Reduce inefficiencies across the power sector
The government has approved a phased transition of 800 MW of demand to bilateral contracting through competitive auctions.
Will Electricity Become Cheaper?
The new system is designed to increase competition and improve efficiency, but it does not automatically mean that every consumer will immediately receive a lower electricity bill. The actual impact will depend on supplier prices, contracts, market conditions and how the competitive market develops.
Key Takeaway
Pakistan is moving from a traditional single-buyer electricity system toward a competitive electricity market. The initial focus is on industrial and other large consumers, while wider consumer participation is expected to develop gradually.
