CCP Report Urges Power Sector Reforms DISCOS Privatization
A report on the state of competition in the power sector, released by the CCP, points out the strong presence of SOEs and the resulting impact on competition within the power sector.
The report recommends the government open the power market and enforce the model of a Competitive Trading Bilateral Contract Market (CTBCM).
The CCP report recommends direct agreements between the power-producing and selling companies for purchase and transmission. The Competition Commission report also suggests the end of the in-between role of the Central Power Purchasing Agency (CPPA).
The NEPRA approved the implementation of the CTBCM model in 2020.
The commission’s report also recommends the separation of power production, transmission, and distribution.
“There is a need to upgrade the outdated power transmission system on an emergency basis,” according to the report.
“The state-owned distribution companies have been in nine to 35 percent line losses and the only solution of line losses has been the privatization of the distribution companies,” the report said. “More efficient distribution entities are bearing losses of the underperforming DISCOs,” according to CCP report.
The report suggests that the buyers should enter into direct purchase agreements with the power generation plants.
The CCP also recommends the instant shutdown of outdated power plants to decrease the burden of capacity payment. It recommends the implementation of the Transmission Line Policy 2015.
The competition commission also recommends inviting the private sector to join the transmission infrastructure.
The CCP recommends the privatization of the DISCOS to bring the line losses down.
At the report’s launch, CCP Chairman Dr Kabir Ahmed Sidhu emphasized the critical role of a competitive power sector in driving economic growth and providing affordable energy to consumers.
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