Pakistan Pioneers Competitive Electricity Auction Model

Pakistan's government has approved a pilot electricity auction, allowing market forces to determine power prices. This shift targets inefficiencies and corruption in the current system. Guidelines have been approved for an 800MW wheeling auction, and a steering committee will oversee integrated energy planning.

Pakistan is set to revolutionize its energy market with the introduction of a competitive electricity auction system, marking a significant departure from government-controlled pricing.

The Cabinet Committee on Energy, chaired by Prime Minister Shehbaz Sharif, has approved guidelines for the wheeling auction, allowing 800MW of electricity to be traded under the Competitive Trading Bilateral Contract Model (CTBCM).

This move is seen as a first step towards mitigating inefficiencies and alleged corruption in the power sector by enabling market forces to dictate electricity prices, rather than government intervention.

(With inputs from agencies.)