ISLAMABAD — Pakistan's renewable-energy market is entering a new phase as regulators prepare for competitive electricity procurement involving solar and wind projects.

The National Electric Power Regulatory Authority (NEPRA) has approved changes to the wheeling auction process that will allow the first 400MW block to move forward. Participating solar and wind projects will also be required to include battery energy storage systems.

Under the revised framework, a renewable project participating in the auction must have battery storage equivalent to at least 10% of the firm's capacity of its solar or wind generation facility.

The requirement is designed to help address fluctuations in renewable electricity generation. Solar output, for example, changes during the day, while wind generation can vary according to weather conditions.

The move is part of a broader shift toward competitive electricity markets. The government has also progressed on the regulatory framework required for open access and electricity wheeling, allowing eligible large consumers to purchase electricity through competitive arrangements.

For industrial consumers, the development could create new opportunities to source electricity directly from private power producers under the emerging competitive framework.

The initial auction is part of a wider plan involving 800MW of generation capacity, with the first 400MW expected to serve as the initial phase.

The development could also encourage investment in battery-storage technology, solar generation and wind projects as Pakistan works to diversify its electricity supply.