The Independent System and Market Operator (ISMO) recently organized a major event to highlight progress on the Competitive Trading Bilateral Contracts Market (CTBCM). One of the key announcements was the plan to auction 800 MW of capacity to competitive suppliers, an important milestone in opening Pakistan’s electricity market to genuine competition.

The CTBCM is not an untested or experimental model. Similar wholesale electricity market models already operate in Europe, Turkey, India, and several other countries. The rules, frameworks, and lessons from these markets are well documented. Pakistan, therefore, is not inventing a new system but adapting a proven one. The challenge lies in implementation and in ensuring that all participants, consumers, suppliers, and regulators, understand their roles and responsibilities.

One persistent issue is the lack of clarity among bulk power consumers (mainly industries) and investors hoping to become competitive suppliers. Many view “wheeling” of electricity as equivalent to transporting a regular product from one place to another, with a simple delivery fee. But electricity is very different.

Electricity is a unique commodity with characteristics that set it apart from ordinary goods. It must be consumed the very moment it is produced, as it cannot be stored economically in large volumes except through limited and costly technologies like batteries. The transmission and distribution networks move electrons at near-instant speed, making electricity markets far more complex than markets for physical products. Most importantly, demand and supply must........

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