Competitive power market era begins

ISLAMABAD: After a delay of almost three decades and sitting on huge surplus generation capacity, Pakistan on Tuesday completed the legal process for the auction of electricity at a wheeling charge, beginning with a notional 800 megawatt capacity to gradually enable a competitive electricity market.

“The Competitive Market Operations Date (CMOD) stands declared with effect from Jan 22, 2026. Accordingly, the Framework Guidelines became effective on January 22, 2026, and the auction process takes immediate operational effect,” said the National Electric Power Regulatory Authority (Nepra) on Tuesday. “Further, the authority also directs that all relevant entities must complete their required actions linked with CMOD as per the approved timelines and applicable documents”, it added.

Pakistan embarked on power sector reforms in the early 1990s to break up the Water and Power Development Authority (Wapda) and convert state-controlled power generation, transmission and distribution into a competitive electricity trading market under covenants with the World Bank. But it could not go beyond creating more than a dozen and a half entities that still remain under state control, maintain a monopoly over the power sector, and keep bleeding the economy and consumers at large.

The country has more than 42,000MW of installed generation capacity, but could barely exceed 27,000MW of supply during peak summers. The government cut the wheeling charge by over 20pc in January to around Rs9 per unit to facilitate big industry participation in competitive bilateral trading.

Nepra declares CMOD, enabling auction of 800MW after decades of reform delays

Nepra declares CMOD, enabling auction of 800MW after decades of reform delays

Nepra also directed the Independent System and Market Operator (ISMO) — one of those over a dozen entities under the Power Division — to immediately........

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