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;
