Advancing CTBCM for a Competitive, Green, and Sustainable Power Future

Introduction

Pakistan is at the crossroads of its energy structuring. The CTBCM’s is about transforming the electricity
industry above and below, to vaporize monopolistic regulations and create a transparent customers’ sphere. This reform tackles long-standing issues in the sector such as persistent inefficiency, rigid long-term contracts, circular debt (which has come under control) and expensive reliance on imports. With the introduction of bilateral contracting, open access to grid, power wheeling and private suppliers in CTBCM there may exist direct participation between generation units and consumers. The taarget behind this shift is to generate market incentives for lower tariffs, and promote cleaner (and possibly more energy efficient) products. CTBCM is not only an energy reform, but a key factor for the economic restructuring of a nation that promotes competitiveness. CTBCM brings a competitive framework to wholesale electricity through bilateral contracting, which makes it possible for bulk power consumers of at least 1MW to buy electricity directly from generators. The introduction of workable and transparent open access charges and procedure for allocation of wheeling quantum by way efficient pricing under this regulation is likely to lead industrial as well as economic growth through competition, cost reduction, quality improvement among the consumers served.

Background

Hydropower is one of the largest contributors to Pakistan’s energy mix from large resources like Tarbela,
Mangla, Ghazi Barotha, Neelum–Jhelum, Dasu and Mohmand; nuclear sources such as KANUPP (Karachi Nuclear Power Plant) Chashma C-1–C-4 and Karachi K-2/K-3; wind farms with installation in Sindh based Jhimpir & Gharo corridors; solar generation including utility scale plants located in Sindh and Punjab and arrayed rooftop system across the country; bio-mass sources from sugar mills followed by bagasse can be seen; thermal fostered by LNG start at Port Qasim using natural gas or Thar coal. In the past, all energy was procured through CPPA-G using a single-buyer system which led to high capacity payments, and an inflexible dispatch system. Circles of debt ran deeply into operation loss, inefficient recoveries and costly imports of fuel. CTBCM brings to bear market forces in procurement, with each generation of technology competing on cost, reliability and performance. This environment naturally suits renewables solar and wind as their marginal generation cost is close to zero. While Pakistan adds new hydropower, nuclear brickups and renewable corridors BCLMS makes sure of the inclusion in the system of these power plants as cheaper greener sources become preferred.

Institutional Reforms

Effective CTBCM implementation depends upon substantial institutional changes. CPPA-G would have
to build up its Market Operator branch, ensuring settlement, contract enforcement and market monitoring. NEPRA should put in place robust regulatory bodies that cannot allow anti-competitive practices to occur, ensure non-discriminatory grid access and transparency of prices. DISCOs require modernization in terms of digital metering, automatic billing and reducing theft as well as governance enhancements to compete with private suppliers. NTDC will have to develop and strengthen transmission corridors, particularly Renewable Energy Zones (REZ), in order to accommodate high penetration of solar, wind & hybrid. Transparent market rules, grid codes and uniform wheeling charges will need to structure the flow of renewable energy across Pakistan. CTBCM governance modalities must be underpinned by institutional capacity building, financial self-sufficiency, transparency mechanisms and technology assimilation.

Transnational Case Studies

The successes of CTBCM can be proved in the global trends of switching to competitive electricity markets. In the US, some regions such as PGM or ERCOT allow electricity to be sold and purchased in a competitive way between producers and suppliers, which ultimately leads to lower wholesale prices for consumers and faster penetration of renewables. India opened up power exchanges and the Green Term Ahead Market (GTAM) to allow states as well as industries to buy cheaper power from renewable energy sources through open bidding. European Union states experiencing the advantages of efficient dispatch, renewables auctions and flexible markets have followed the unbundling line splitting vertically integrated utilities with a view to lowering consumer costs. These cases demonstrate that competition, transparency and good regulation are the cornerstones for a successful energy market reform and are well rooted within CTBCM. Turkey unbundled its vertically integrated utility, independent regulator and competitive wholesale market, with a Day-Ahead Market (DAM) administered by EPİAŞ serving for hourly price discovery and portfolio optimisation. +1 Turkey’s example demonstrates that transparent spot markets, alongside bilateral contracts, can help to raise private investment and support gradual retail competition.

Benefits of CTBCM

CTBCM brings multidimensional benefits: economically, it reduces fuel import dependency, lowers tariffs, attracts investment, and eases circular debt pressures. Environmentally, it accelerates the shift toward clean energy by making renewable adoption cost-competitive. Industrially, it reduces production costs and strengthens global competitiveness. Socially, it enhances service delivery and consumer choice. With solar and wind offering some of the cheapest energy globally, CTBCM enables Pakistan to utilize its abundant renewable potential in Sindh, Punjab, and the North, dramatically cutting emissions while boosting long-term energy security. Also, low long run cost will enable the circular debt to lower as well because competitive purchasing and merchant sales will cut the reliance on long term, will take or pay PPAs, enabling retirement or decline of dispatch of uneconomic plants. Over time, this will slowly rid the circular debt burden, supporting the government’s liquidation actions on legacy debt. It will also accelerate renewable and Low Carbon Deployment

Currently, Pakistan’s generation mix is still largely thermal, although this is moving slowly but steadily toward green and other clean sources. Finance Division encourages investment in local resources (hydro, Thar coal up to higher efficiency, wind, solar, bagasse) commensurate with IGCEP targets and less reliance on volatile imported fuel prices. Large industrial and commercial consumers will have the ability to choose their supplier, negotiate tariffs, and customized services (such as green tariffs, time of use contracts) leading to a competitive cost base for exports for Pakistan and the development of clear market rules, prices published for all to see, and better metering/IT systems will shrink information asymmetry and extend responsibility throughout the value chain.

Pakistan must establish a National CTBCM Implementation Council, enforce transparent market rules, expand renewable zones, digitize DISCOs, create green energy incentives, upgrade transmission lines, harmonize wheeling charges, and build regulatory capacity. Public private coordination, international partnerships, and stable policy frameworks will determine CTBCM’s long-term success.