By Muhammad Mudassar ISLAMABAD, Mar. 22 (INP-WealthPK): The commercial operation of the Competitive Trading Bilateral Contract Market (CTBCM), which aims to discourage monopolies and encourage a competitive market, is likely to become operational by May 2022. The Economic Coordination Committee (ECC) of Pakistan’s Cabinet approved the CTBCM model for the first time in Pakistan in 2015. Multiple buyers will purchase electricity from the power generation companies (GENCOs) under the CTBCM. Bilateral or spot agreements may be used for these purchases. These markets are operated by independent system operators. Power distribution companies (DISCOs) will be regulated on the basis of a cost-based or price-based concept. It will create competition between power distributors and generators. The benefit for consumers will come in the form of lower price and better service. In Pakistan, the CTBCM model would enable greater transparency, predictability, accountability, and a level playing field for multiple buyers and sellers in the energy sector. The major objectives of the wholesale market system (CTBCM) are: The CTBCM is committed to providing non-discriminatory open access to its services to all consumers. Improve efficiency arising from “competition in the market” and “competition for the market”. Ensure that wholesale payments are handled in a disciplined manner. Ensure transparency and predictability. “With the current marketing system, Pakistan’s electricity system is facing transmission and distribution losses, and operating inefficacies,” said Khurram Lalani, Principal of Resources Future Pakistan (Pvt) Limited, at a meeting on ‘Examining the future direction of the electricity market in Pakistan: The case of CTBCM’ organized by Sustainable Development Policy Institute (SDPI), in Islamabad last week. Dr Vaqar Ahmed, Joint Executive Director of SDPI, asserted that the implementation of competitive markets would continue to require in-depth consultations between relevant stakeholders. Moreover, transition from the single buyer model to the wholesale market, where power will be traded like competitive commodities, requires us to continuously envisage how various inefficiencies in the system would be addressed. According to Sameer Hasan, Deputy General Manager of K-Electric, the CTBCM does not merely refer to technological change, but also to certain institutional reforms. In the power sector, all entities (NEPRA, NTDCs, etc.) are aligned with this model. Currently, there is a vertical integration system in Pakistan’s energy sector with a single buyer and multiple generation companies. There is no competition among these GENCOs because they sign long-term contracts. The market will open up after providing opportunity for the private investment. Pakistan has accumulated a circular debt of Rs2.47 trillion. By implementing the CTBCM, this debt will decrease significantly. It is imperative that the government remains cautious about non-competitive behavior. The market participants will be DISCOs as regulated suppliers, generators, traders, and competitive suppliers.