KE committed to implementation of CTBCM model

The Competitive Trading Bilateral Contract Market (CTBCM) Model is under discussion in the power authority. The National Electric Power Regulatory Authority (NEPRA) conducted a public hearing to ensure timely integration of the CTBCM model.

The CTBCM will allow the suppliers and consumers the freedom to enter into direct contracts with one another. At present, the electricity transactions are done under a single-buyer model whereby the Central Power Purchase Authority Guarantee Limited (CPPA-G), an entity that was created out of the National Transmission and Dispatch Company (NTDC), buys power from all the producers whether government-owned generation companies (Gencos) or the IPPs as an agent of and on behalf of the power distribution companies (Discos). The CPPA-G also plays the role of system operator whereby it matches supply with the demand of various Discos. It also acts as the market operator and in this role it carries out the billing and settlement functions.

Under the CTBCM model a wholesale electricity market will be launched in which all the power-producing entities will start selling their output. The wholesale market will evolve into a fully-competitive retail market in a few years in which all consumers will be free to buy from the seller of their own choice that participates in the market.

During the hearing, the power utility expressed its commitment for a sustainable transition towards open markets in line with GoP and NEPRA objectives and highlighted a few recommendations in this regard. K-Electric suggested that the framework for open markets must be aligned with the National Electricity Policy approved by the Council of Common Interest (CCI) and Cabinet Committee on Energy (CCoE) approved principles for competitive wholesale markets enabling a sustainable transition as well as a healthy and efficient competitive power market.

The utility proposed that it is essential that a mechanism is developed to ensure recovery of associated costs enabling a transition with no additional burden on regulated consumers. KE also advocated for a dry-run to be conducted that will be critical in assessing the readiness of the system at large as well as help in identification of any subsequent revisions that maybe required to the market design or any other reforms that maybe needed to ensure a sustainable and more efficient competitive power market