Govt invites bids for first electricity wheeling auction

The government is moving out of the electricity purchasing business from today, Federal Energy Minister Awais Ahmad Khan Leghari said on Sunday, announcing the process for the country's first power wheeling auction under the Competitive Trading Bilateral Contract Market (CTBCM).

Speaking to the media in Islamabad, the minister said providing cheaper electricity to consumers was the government’s priority. He said 800 megawatts of electricity would be auctioned over the next five years, with 400MW being offered in the first phase.

Under the new arrangement, businesses and industries will be able to purchase electricity from power plants on a competitive basis, he said.

Leghari said that the government currently buys electricity through an established system and supplies it to consumers. However, questions had repeatedly been raised about the terms and conditions under which electricity was purchased.

“The name of IPPs has unfortunately become discredited today,” the minister said. He added that the government would no longer be a mandatory buyer of electricity under the new system.

“From today, the government is practically moving out of electricity procurement. No one will have the right to sell electricity to the government, and the government will not be able to purchase it,” Leghari said.

Instead, electricity producers and consumers would be allowed to conduct transactions directly, he added.

The minister said the new electricity trading mechanism would be based on transparency. It would initially be introduced for industrial and other large consumers before being expanded in the coming years.

According to Leghari, the aim is to eventually establish a proper electricity market where even ordinary consumers would have the option of choosing where to purchase their electricity. “The government will no longer buy electricity and force people to purchase it from the government at rates set by it,” he said.