Saturday, 17 November 2018

Our Strategy

Our Strategy for Market Development:

The CPPA-G being the Market Operator is facilitating the power market transition from the current single buyer to competitive market. While changing the market model, the overall strategy is to bring efficiency through competition in generation and retail, while transmission and distribution wire business remains regulated as they are natural monopolies. Increased efficiency and financing by market evolution ultimately leads to lower tariffs and better service quality for end users, which are the drivers for the market development.

Further the Power Market Development strategy is informed by NEPRA’s (Market Operator Registration, Standards and Procedures) Rules, 2015, rule 2.1(f), wherein the arrangements and stages for the transition of power market to a competitive regime are defined. The rule specifies that the current structure of the Pakistani wholesale power market is a Single Buyer Arrangement. It also provides the timelines to transition the market from current state to Single Buyer Plus (2016-2020) and ultimately to Competitive Market Operations (July 2020 thereon).

The role and involvement of CPPA with regards to power procurement in these three phases will change over time. Currently, CPPA is involved in all power procurements (maintaining a central power pool), however, later by introduction of bilateral contracts and competitive market models, CPPA’s role will be limited in power procurement business.

We also understand that a sudden acceleration from a single buyer market to a competitive electricity market would neither be practical nor feasible. A gradual transformation is required.

Taking into consideration, the complicated mechanics of electricity market, CPPA-G has formed a team of CPPA-G’s strategy and market development section and international experts who have witnessed and contributed in the shift in their respective countries and regions.

The CPPA-G’s team understands that the market evolution is not possible without extensive collaboration, consultation and capacity building of market participants and the other key entities. Therefore, the market development roadmap is divided into three major phases; capacity building and pre-feasibility, detailed market design and implementation.

The Phase-I (already started) includes Capacity Building and Market Model Design that will lead to the preparation of Competitive Trading Bilateral Contract Market (CTBCM) plan. This plan will be submitted before NEPRA for approval by February 2017 and its approval will form the basis for the remaining two phases. The Phase-II is anticipated to commence in mid of 2017 for a period of up to nine months will and will entail the detailed market design. The Phase-III will be implementation will start partially in parallel with Phase-II