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🏠 Home › MCQs › Pakistan Current Affairs › Question

In energy sector economics, what is the primary purpose of ‘capacity payments’ within power purchase agreements?

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By Zain

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Published 20 Feb 2026

A. Reimbursing the actual cost of fuel consumed

B. Covering fixed costs to ensure generation availability

C. Funding the expansion of transmission networks

D. Providing direct electricity subsidies to consumers

💡 Explanation:

Capacity payments are fixed charges paid to electricity generators to guarantee that their plant is available to produce power when needed, regardless of whether the electricity is actually dispatched or consumed.

📚 Topics: Pakistan Current Affairs

🎯 Exams: CSS NTS PMS UK_CS

🏷️ Tags: Economic Governance Energy Economics Infrastructure Finance Public Policy

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