FOR decades, Pakistan’s power sector has operated as a rigid, state-run monopoly — like a railway network where the state owns the trains and tracks and sets routes and fares. Under this centralised model, the Central Power Purchasing Authority (CPPA) acts as the sole buyer, procuring electricity from generation companies (Gencos) and independent power producers (IPPs) and channels it through distribution companies (Discos). This framework prevents competition, inflates costs and sustains inefficiencies.

The proposed ‘Competitive Trading Bilateral Contracts Market’ seeks to dismantle this monopoly and move Pakistan towards a decentralised electricity market. It will allow market participants to negotiate contracts, set prices and operate independently, while paying regulated ‘tolls’ for grid access, drawing parallels to a modern motorway network. The CTBCM framework defines market participants and service providers. Market participants include Gencos, bulk consumers, power traders and suppliers, who can engage in bilateral contracts for energy or capacity of 1MW or more.

Service providers manage grid operations and infrastructure, including the National Power Control Centre, National Transmission & Despatch Company, Dis­cos........

© Dawn