Pakistan Mandates Battery Storage for First 800MW Power Auction in 30 Years

The government has proposed making Battery Energy Storage Systems mandatory for participants in the auction of a notional 800MW capacity, marking a step toward a competitive energy market after more than 30 years of delay.

Why the Change Matters Now

The Independent System and Market Operator has put forward the requirement following engagements with prospective auction participants on the wheeling auction framework. The move targets grid challenges such as curtailment and the duck curve while aiming to improve returns for participants through better integration of solar or wind generation. ISMO reported that stakeholder meetings and a public consultation session showed broad support for starting with a minimum mandatory BESS level while keeping the requirement financially viable.

Details of the BESS Proposal

Under the first of three major changes suggested by ISMO, auction participants must include a Battery Energy Storage System with at least 10 percent firm capacity alongside their solar or wind technologies. ISMO modelling indicated that returns increase with BESS installation up to a certain percentage, leading to the selection of the 10 percent minimum based on participant feedback. The proposal states that the requirement addresses grid issues and benefits participants by improving their financial outcomes.

Next Steps in the Process

The National Electric Power Regulatory Authority has received the request for approval and is seeking stakeholder comments within seven days. The government continues to engage the private sector to finalise the bidding schedule for the 800MW auction. This development applies the wheeling framework to surplus capacity in a manner intended to support smoother implementation across the power sector.

Qualitative assessments from the engagements suggest the changes will help stabilise supply without introducing new quantitative projections beyond those already modelled by ISMO. The focus remains on practical rollout of the auction framework following the extended period without competitive bidding.