Who bought it, who sold it, at what commercial terms, and how should the transaction be settled?
A competitive electricity market needs both answers.
This is also why NPCC’s historic operational role and the newer market architecture should not be conflated. Operating the physical power system and operating an electricity market are related, but they are not identical functions.
This Connects Directly to What I Said About IPPs
In the podcast I spent some time discussing IPPs and capacity payments.
Capacity payments are often described as though someone is simply being paid for producing nothing.
That isn’t a technically sufficient description.
Power plants have fixed costs. Capital has a cost. Debt has to be serviced. Equipment must remain available. Investors who build infrastructure under long-term contractual arrangements need a mechanism to recover those costs.
The real policy question is therefore not whether fixed-capacity costs can ever be legitimate.
They can.
The more difficult question is:
Who should carry the risk if the electricity is ultimately not required?
That is where competitive electricity markets become particularly interesting.
Under a more market-oriented model, an investor can identify demand, build generation and contract with consumers.
If the investment thesis is wrong, a larger portion of that commercial risk can potentially remain with the parties making the investment decision rather than automatically being transferred to every electricity consumer.
That is conceptually very different from socialising demand risk through long-term guaranteed procurement.
It doesn’t make private markets infallible.
It changes who makes the decision and who carries the consequences.
Pakistan Can Have Surplus Generation and Load Shedding at the Same Time
This sounds contradictory until you separate generation from delivery.
People regularly point to Pakistan’s installed capacity and ask:
If we have so much generation, why is there load shedding?
Because a power plant and a consumer are not connected by arithmetic.
They are connected by a grid.
Installed capacity is not the same as dependable capacity.
Dependable capacity is not the same as dispatched generation.
Dispatched generation is not the same as what can be transported through a particular transmission corridor.
Transmission capacity is not the same as distribution capacity at the consumer’s location.
And a megawatt available in one part of the network is not automatically a megawatt deliverable everywhere else.
This is why I would also avoid repeating the popular formulation that Pakistan’s entire grid has one fixed 25,000 MW transmission limit.
Power systems don’t work like a single pipe with one national flow rating.
Constraints occur at transmission corridors, transformers, substations and distribution networks under particular operating conditions.
The underlying concern is valid.
The simplification isn’t.
The Grid Isn’t Dying
One of the strangest conclusions people draw from Pakistan’s solar boom is that the grid will eventually become irrelevant.
I think the opposite is possible.
Consider a future industrial consumer that has:
rooftop solar during the day;
a bilateral renewable-energy contract through CTBCM;
battery storage for peak management;
grid electricity when required;
perhaps EV charging;
perhaps flexible industrial loads;
and eventually some form of demand response.
That consumer actually needs a more sophisticated grid, not no grid.
The grid stops being merely the place from which electricity is purchased.
It becomes a platform across which electricity is exchanged.
That is a much more interesting future.
Solar Is Already Forcing This Conversation
This connects to one of my central arguments in the podcast.
For a long time, solar sales were largely about generation.
“How many panels?”
“How many kilowatts?”
“How much will I export?”
Those questions made sense in an environment where exported solar electricity could be economically valuable enough to compensate for consumption at other times.
The economics are changing.
So the engineering question becomes:
What should this customer’s energy system actually accomplish?
Perhaps the objective is maximum self-consumption.
Perhaps it is backup.
Perhaps it is peak shaving.
Perhaps it is protection against load shedding.
Perhaps it is lowering industrial energy cost.
Perhaps, eventually, it includes purchasing renewable electricity from a third-party generator through a competitive market.
The answer determines the architecture.
This Is Why I Keep Coming Back to Right-Sizing
One line from the podcast summarizes much of my thinking:
Best components do not automatically make the best system. Good engineering does.
The same principle applies at national scale.
Pakistan does not necessarily need the maximum conceivable number of power plants.
Nor does it need the minimum.
It needs the right combination of:
generation,
transmission,
distribution,
storage,
distributed energy,
demand flexibility,
market competition,
