The Power Division has approved a phased plan to auction 800 megawatts (MW) of electricity through the wheeling mechanism over the next five years, a move aimed at gradually opening up Pakistan’s power market to competition, according to officials familiar with the development.
The auction process will begin with an initial 200MW in 2026, followed by annual auctions of 150MW each from 2027 to 2030. The approvals have been granted under the framework of the National Electricity Plan and the Supplier Rules, which require the government to set clear guidelines for wheeling-based power transactions.
Officials said the federal government has now formally approved these guidelines, paving the way for the Independent System and Market Operator (ISMO) to move forward with the auction process. Under the approved framework, ISMO is required to submit the auction mechanism to the National Electric Power Regulatory Authority (Nepra) within a week of the notification.
Sources said ISMO had already prepared a draft auction process to avoid delays and had held multiple consultations with Nepra in December 2025. After incorporating feedback, the final draft was presented to the Market Monitoring Committee earlier this month, which recommended its submission to the regulator for approval.
The auction framework outlines key aspects such as the annual auction calendar, bidding procedures, eligibility requirements, bid securities, performance guarantees, and post-award obligations for participants. It also sets out how auction volumes will be allocated in case of over- or under-subscription.
Officials explained that the 200MW set aside for the first auction reflects current market demand, particularly from companies that have already applied to Nepra for competitive supplier licenses. The remaining 600MW has been evenly distributed across the following four years to ensure a controlled and manageable rollout.