C ONSULTATIVE W ORKSHOP ON C OMPETITIVE W HOLESALE P OWER M ARKET D ESIGN AND W AY F ORWARD www.cppa.gov.pk
Agenda Historical Perspective of Market Development in Pakistan Part-1 Market Development ( GoP’s Decisions and NEPRA Act 2018) Part-2 Market Structures Evolution in Pakistan Part-3 Preparation of CTBCM & Its Approval & Actions for Entities Part-4 Implementation Coordination as Proposed & Approved in CTBCM Model Part-5 CTBCM Detailed Design Part-6 Takeaways / Recommendations Part-7 Comments / Feedback Part-8
Part – I Historical Perspective of Market Development in Pakistan 3 www.cppa.gov.pk
Power Sector Reforms (Historical Perspective) 1992 1997 1998 WAPDA Strategic Plan NEPRA Act Unbundling of WAPDA • • Enhance capital formation Enactment of NEPRA Act - Thermal Power PE PEPC PCO GENCOs (4) GEN (4) • • Generation Companies Formation of Independent Improve efficiency and - Transition Regulator (NEPRA) to oversee • rationalize prices , and LESCO Management - Perform Supply the restructuring process • • GEPCO Move towards full Company Business • FESCO - Oversee the competition by providing - Perform (10) DISCOs (10) • corporatization & IESCO distribution , the greatest possible role privatization • construction, MEPCO for the private sector - Formed Business expansion, • PESCO DISC through privatization Plan for maintenance • HESCO Restructuring operation of the • QESCO process distribution system • TESCO • SEPCO - Transmission Network Operator NTDC - System Operator - Planner - Power Procurer - Power Market Development
His istorical l on on Mar arket De Development -The model and plan -NEPRA Approved submitted to - ECC’s Decision April 2015 CTBCM Model NEPRA for review - CPPA through consultation prepare - Request for ECC in Legal formation of CPPA . CTBCM Model and Plan by June 2017 amending timelines However, functioned as - The CTBCM is for wholesale market - New NEPRA Act Department of NTDC from - Will be approved by NEPRA Amendments 2009 to 2015. - Commercial Operations date: June 2020 - MO’s Authorization - CPPA Operationalized - Comments - CPPA formed Market - Partnerships Development Department 2009 2019 2002 2017 2018 2013 2015 - NTDC was granted Transmission - CPPA prepared and submitted the License to perform five functions: model and plan to Board in July 2017 - National Power Policy 2013 .1) TNO - The Board formed a Special Committee - “… Innovative business and regulatory .2) SO - The Special Committee evaluated the models will be deployed to weaken the .3) Planner plan monopolies, increase efficiencies, and .4) Metering Service Provider - Board principally approved CPPA’s re - decrease costs through competition. .5)Contract Registrar/ structuring and allowed submission Wheeling charges and whole sale PEX Administrator of CTBCM submission to NEPRA markets may be introduced to introduce - Consultations with SECP multiple buyers and sellers in the market - Per licensing requirement, NTDC was place .” mandated to develop the whole sale www.cppa.gov.pk market (CTBCM) by 2008
Overview: Market Operator in the Electricity Market Market Participant Service Government of Pakistan NEPRA Providers (Regulator) MO Ministry of Pakistan MoE (Power CPPA-G Private Sector Atomic Energy Water Division) Commission Resources Ownership Licensees SPPs/ K- CHASHN WAPDA AEDB PEPCO PPIB KANUPP IPPs CPPs Electric UPP SO + TNO Ownership Mega Water NTDC GENCOs DISCOs Dams Projects (TNO+SO) www.cppa.gov.pk
Ele lectricity Mar arket: Se Service Providers an and Par articip ipants s Wholesale Electricity Market Operator Generators as Market Participants Transmission Service - DISCOs: Wire Business & Electric - BPC > 1MW Provider NTDC Power Supplier - Others non-eligible - Participants as Electric Power customer Suppliers 10 DISCOs and KE - Service Provider for www.cppa.gov.pk wire business/distribution
Ele lectricity Market Fr Framework Legal Electricity Act 1910 NEPRA Act 2018 Constitution Parliament Pakistan’s Electricity Market Framework National Electricity Policy Power Policy 2013 1994, 2002, 2015 CCI/MoE Policy & Plan Grid, Commercial and Market Rules, Power Wheeling, Competitive Bidding, Regulatory NEPRA Import Regulations etc Distribution Codes Procurement Rules Regulated to Generation Public Sector IPPs K-Electric Competition Metering Service NTDC Regulated System Transmission Network Transmission Planner Provider Service Provider Operator (SO) Operator (TNO) NPCC Regulated System Supply = Demand Reliable Grid Operational Planning Service Provider Operator Market CPPA Regulated Market & Product Agency Role Billing & Settlement Service Provider Development Operator Distribution Wire Metering Service Sales or Supply Business DISCOs/KE Distribution Business (Regulated) Provider (Regulated) (Competition) Increase Markets Single Buyer Competitive Wholesale Competitive Retail Competition
www.cppa.gov.pk
Market Development Updates • The journey started in 2015 • MO’s capacity in Market Design and Development • Dedicated Market department • MRC Market Design Consultants hired through ADB’s support • MoUs with EPIAS, EPEXSPOT and LUMS as Market Development Partners • Training Partners (PSR Brazil, CRA and others) • Learning Exchanges (Turkey, India, NYISO, IESO, AESO, South Korea) • Market Literature studied (NordPool, European, North American and other Latin American Markets) • 100+ consultative sessions including workshop and one-to-one consultation meetings with stakeholders • Around 2,000 man days of training on market development www.cppa.gov.pk
Wholesale Market Design – Phased Approach Phase-II Phase-III Phase-I (Detailed Market Design) (Implementation) (Conceptual Market Design) June 2016 – July 2017 In parallel www.cppa.gov.pk
Number of Reports Produced • Following reports have been produced: • Report 1 CTBCM Model Design – Concept Paper • Report 2 CTBCM Model – Roadmap • Report 3 CTBCM – Model Consolidated Report • Report 4 CTBCM – Detailed Design Report • Report 5 CTBCM- Market Modelling /Simulations based on SDDP • Report 6 CTBCM Financial System for CPPA Report • Report 7 NPCC Gap Analysis Report* • Report 8 CPPA’s Restructuring Report & Plan • Report 09 Integrated Electricity Market Simulation Model (IEMSM) and Report • Report 10 Data Institutionalization Report* • Report 11 Single Buyer Plus Model – Concept Paper and Plan • Report 12 Marginal Price Discovery Report • Assistance by CPPA to DISCOs and NTDC in preparation of: • Report 13 PMS Report – Country Level x 2 • Report 14 PMS Report – All DISCO x 2 • Report 15 NTDC Regression Report • Report 16 Power Market Survey Manual • Report 17 Integrated Generation and Capacity Expansion Plan (IGCEP) • Report 18 NPCC Annual Production Plan based on SDDP www.cppa.gov.pk
Market Development Core Team - Gen. Planning Strategy & Market & Load Development Forecast Department Consultants Training Partners in Market Development Strategic Partnerships
DISCOs CPPA Core Electricity Market Working Market Dev. Team Groups Team www.cppa.gov.pk
CPPA’s IT Enablement for Competitive Market Operations IT Enablement for Future SPS Function IT Enablement for Future MO Function Balancing Mechanism Monitoring Data Inst. MP App ERP CDXP SFS Cost Opt. (BME + BMC) Portal Tools Data Center DR Site www.cppa.gov.pk
Electricity Market Team www.cppa.gov.pk
EMP Program 2018 www.cppa.gov.pk
Part – II II Mar arket De Develo lopment ( GoP’s Dec Decisio ions an and NEP EPRA Act ct 201 2018) 18 www.cppa.gov.pk
Wholesale Market Development Mandate • ECC Decision April 30, 2015 • Point 9 of the Decision: • Wholesale Competitive Trading Bilateral Contract Market (CTBCM) • CPPA-G prepares CTBCM Plan through consultation with stakeholders • Transition to be completed not later than July 2020 (Now Oct 2021) • Model to be submitted for approval by NEPRA www.cppa.gov.pk
NEPRA Act ct 2018 • Four Chapters and 51 Clauses • Chapter 1 General; Clause 2, Definitions : • Bulk Power Consumer • Electric Power Supplier • Electric Power Trader • Market Operator • National Electricity Policy & National Electricity Plan • Interconnection Service www.cppa.gov.pk
NEPRA Act ct 2018 Chapter 1 General; Clause 2, Definitions : • National Grid Company • Provincial Grid Company • System Operator • Transmission • Important Clauses of the Act w.r.t today’s discussion: Section 14C, Captive Generation • Section 14D, Duties of Generating Companies • • Section 16, Transmission License • Section 17, National Grid Company www.cppa.gov.pk
NEPRA Act ct 2018 • Section 23 • 23 A&B for Market Operator • 23 C&D for Trader • 23 E&F for Supplier (DISCOs Deemed Supplier & Last Resort Supplier) • 23 G&H for System Operator • Section 25 Licenses of Territory Served by KE • 25 A Registration • Section 31 Tariff • Section 32 Investments & Power Acquisition Programs www.cppa.gov.pk
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