Power sector reforms: Consumers will be able to choose from multiple electricity supplier

ISLAMABAD: Pakistan has formally decided to overhaul its energy transmission sector with the restructuring of National Transmission and Dispatch Company (NTDC) and dividing it into three entities by early next year to boost efficiency and cut costs in the nation’s power grid.

Federal Minister for Energy Owais Leghari announced this at a news conference here on Saturday, revealing that the restructuring of NTDC was already underway, with full operational readiness expected by February 2025. “NTDC has long been plagued by mismanagement, but we are introducing sweeping changes to improve the sector,” he said. This restructuring, which has already been approved by the cabinet, is expected to improve oversight and eliminate longstanding issues like project delays, cost overruns, corruption and nepotism. The restructuring will create three independent entities: the National Grid Company of Pakistan (NGCP), Energy Infrastructure Development and Management Company (EIDMC), and Independent System and Market Operator (ISMO).

NGCP will focus on making the country’s power transmission services more reliable and efficient. EIDMC will oversee development activities and manage energy infrastructure projects, while ISMO will establish a competitive electricity market, allowing consumers to choose from multiple suppliers, including distributors, to drive down costs. Each of these new entities will operate under separate boards of directors to promote accountability and reduce bureaucratic delays. Unlike the previous structure which employed thousands of staff, each new company will have between 50 and 70 employees.

In addition to NTDC restructuring, the government is negotiating with private energy generators to reduce costs for consumers, with focus on lowering power tariffs. Following this, the government plans to negotiate with its own generators including local renewable energy sources like wind and solar plants to lower costs and cut power tariffs.

The minister highlighted Pakistan’s growing prominence in green energy, noting that renewable sources including wind, solar, nuclear and hydropower now account for 55 per cent of the country’s energy mix. He said within the next decade, 88 per cent of the nation’s energy production would come from clean sources. “We are proud to be a leader in green energy in the region,” he stated.

Leghari pointed to the prime minister’s recently announced Electricity Sahulat Package which will significantly reduce electricity prices by Rs26 per unit for consumers during the winter months (December 2024 to February 2025). He said the initiative was designed to encourage consumers to use electricity for heating instead of gas. If successful, the package could become an annual relief measure, providing lower prices during the winter months.

“Our goal is to make affordable electricity a consistent option for the public,” he said, adding that the government remained committed to further reforming the energy sector, with the ultimate goal of transforming Pakistan into the most efficient energy provider in the region.

He highlighted recent improvements in power theft prevention and recovery, which contributed to better energy management. He encouraged consumers to take advantage of the new winter electricity package, emphasizing that it would stimulate economic activity while supporting the country’s energy efficiency goals.