Govt allows CPPA-G competitive electricity buying, supplying

KARACHI: The government on Thursday allowed the Central Power Purchasing Agency-Guarantee (CPPA-G) to buy and supply electricity on market-based principles in its new role as the independent operator.

The CPPA-G became the first and independent operator of the country’s electricity market, which would enable an expedient transition towards a competitive energy market.

As the market operator, the transformed CPPA-G will be responsible for buying of electricity at market prices from power generation and selling it to transmission and distribution companies and enable entry of third-party private players.

“Stringent and proactive regulation, oversight on part of the regulator is fundamental towards ensuring that the CPPA-G fulfils its role as the market operator in the interest of market development and stakeholders,” the National Electric Power Regulatory Authority (Nepra) said in a statement following registration of CPPA-G as the electricity market operator.

CPPA-G moved on from its existing role of a billing and financial settlement agent of the distribution companies. The agency’s primary obligation is to prepare a model for competitive market operations that encompass both sale of power at wholesale and retail levels and submit the same for the approval of the authority.

“Energy sectors around the globe are transitioning towards competitive energy market models, premised upon security of supply, efficiency, competitive pricing, progressive de-carbonisation and relief for the national exchequer,” the Nepra said.

Implementation of the market model, as developed by the CPPA-G, necessitates the organisation to act as the market operator.

The Competitive Power Market Model contains 17 proposed groups of action that will execute a phased and stepwise implementation process of the market model, which covers the relevant provisions of the market rules.

The CPPA was originally a part of the National Transmission and Dispatch Company (NTDC) and then separated as a CPPA-G licencee through a business transfer agreement.

Under the agreement, NTDC became the transmission network operator or system operator, while CPPA-G took over the role of market operator although at a limited scale.