Author: Dotu

Kuensel | Dechen Dolkar | June 13, 2023

Construction of three small projects started

With the aim to generate 10,000MW of electricity by 2020 long failed, the new focus is to generate around 7,600MW from 10 projects.

According to the 2023-24 budget report, the 10 projects in pipeline are the 600MW Kholongchhu hydroelectric project, that has come to a halt, the 2,640MW Kuri-Gongri hydroelectric project, 1,125 Dorjilung hydropower project, 404MW Nyera Amari hydro-power project, 180MW Bunakha reservoir hydroelectric project, 2,500MW integrated Gongri reservoir/Jerichhu pumped storage project and five small hydropower projects that will generate 181MW.

The budget report, presented to the Parliament on Friday, states that the government will resume the implementation of the 600MW Kholongchhu HEP. The Joint Venture has been closed and the Druk Green Power Corporation (DGPC) has bought the shares of SJVNL in January this year. Discussion on debt financing for the project is in progress.

Officials from DGPC said that they are waiting for funds to start the project.

The report also states that the detailed project report of the 2640MW Kuri-Gongri HEP is being undertaken with WAPCOS limited, India as the consultant. The consultant has presented the draft DPR to the stakeholders in May, this year.

Meanwhile, the DPR for Dorjilung HEP, which DGPC has undertaken, is expected to be completed by December 2024. The World Bank has been requested to take the lead in coordinating a consortium financing for Dorjilung.

The project reports for 404MW Nyera Amari HEP and 180MW Bunakha reservoir HEP have been completed. The ADB has been requested for project structuring to take the project for-ward. The Nyera Amari HEP and Bunakha Reservoir HEP is expected to generate 1,599 million units and 719 million units annually.

DGPC is also carrying out the feasibility study of the 2,500MW integrated Gongri HEP reservoir/Jerichhu Pumped Storage Power Plant (PSPP). The integrated project aims at making use of the project component of Gongri project as the lower reservoir. The development of a reservoir/pumped storage type of hydropower project will play a critical role in enhancing energy security, managing power deficits, and maintaining grid stability besides enabling industrial growth, according to the report.

Feasibility study of five projects under Phase-2 small hydropower projects with a total installed capacity of 181 MW is currently on-going and is expected to be completed by June this year. Construction of the projects – 90 MW Jomori, 45 MW Gamri-I, 26 (18+8) MW Druk Bindu I&II, and 20 MW Begana – is planned to commence immediately after the study is approved.

Ongoing hydropower projects

The long delayed 1,200MW Punatsangchhu-I hydroelectric project is still waiting for the decision of the Inter- Governmental Group (IGG) whether to go ahead with the dam or switch to the barrage option.

As of April this year, Nu 85.2B has been disbursed to the 1,200MW Punatsangchhu-I. 87.7 percent of the works have been completed. The IGG was constituted on January 16 this year to review and find a technically safe and cost-effective way for-ward. The group is expected to submit the report to the two governments this month.

The 1,020MW Punatsangchhu – II project is scheduled to be commissioned in 2024. The project on the same river which start-ed much later will see cost escalate from Nu 72.9B (March 2015) to about Nu 94.4B. As of April, a total of Nu 79.7B has been disbursed and 94.7 percent of the works of the project has been completed.

The 118MW Nikachhu HEP will be the first to be commissioned. Commissioning is scheduled for later this year. The total project cost is estimated at Nu 11.964B. As of April, the project has spent Nu 11.903B and the overall project progress stands at 92.6 percent.

Small projects

Three small hydro projects with a total installed capacity of 104 MW are currently under construction. The projects – 54 MW Burgangchhu, 32 MW Yungichhu, and 18 MW Suchhu, are planned to be commissioned between 2024 and 2025. A total fund requirement of Nu 9.320B is projected.

Kuensel | Yangyel Lhaden | June 8, 2023

The 11.7-kilowatt solar panels installed in the campus of Ministry of Energy and Natural Resources (MoENR) generated 19,753 units of energy in kWh as of May 26.

Without considering appliance efficiency and power fluctuations, this amount of energy is sufficient to power a 10-watt LED light bulb continuously for approximately 225.6 years, operate an electric stove with a power rating of 2,000 watts for around 411 days, keep a refrigerator running at 100 watts for approximately 22.6 years, and run an air conditioner with a power rating of 1,500 watts for approximately 547 days.

On average the solar panels have generated 897.8 units of energy in a month which is enough to power eight rural residential consumers, 10 highlander consumers, and three urban consumers in a month, considering the average monthly energy consumption per consumer data from Bhutan Power Corporation (BPC). 

According to BPC data, 128,111 rural residential consumers consume on average 104.9 units of energy, 1,478 highlander consumers use 91.34 units, and 62,145 urban consumers use 244.2 units of energy in a month. 

Taking into account the tariff rate set by BPC, the MoENR office had the potential to save Nu 79,583 over a span of twenty-two months by using solar panels. 

The grid-tied solar panels were installed on the roof of a car park in 2021. The purpose was to showcase renewable energy on campus and provide practical experience to energy officials. Since August 2021, the panels have been generating and supplying energy to an office building.

Grid-tied solar plant

In the grid-tied solar plant, electricity is fed to a transmission line so that solar and hydropower energy can complement each other when solar energy is in short supply.  

According to Ugyen Rinzin, an engineer from the energy department, while the monetary value of the energy generated from the solar panels may not be substantial due to the low tariff rate, its actual energy output is significant. 

“What’s important is to work on diversifying energy in order to complement the existing hydropower generation,” Ugyen Rinzin said. 

The officials of the energy department have been engaged in operating and learning practically about the solar plants on the campus. Ugyen Rinzin said that with the demonstration project, the department gained much hands-on experience.

After the demonstration project, the energy department officials designed and installed solar projects with contractors in Aja Ney and Mendrelthang extended classrooms in Lunana.

“Hereafter, we are confident that we can undertake small-scale solar projects encompassing everything from designing to installing,” Ugyen Rinzin said.

The energy department has laid out plans to implement various solar projects including the installation of a small-scale 21-kilowatt solar system in Shangsa village, Lunana. The department is also working to provide three-kilowatt rooftop solar panels to 304 economically disadvantaged households in rural areas. 

The department is also studying seven sites for solar projects out of which three sites would be chosen. Feasibility studies on the implementation of solar panels on roofs of institution buildings and a 17.3-megawatt solar project in Seyphu are underway.

BBS | Devika Pradhan | June 4, 2023

Considering the need for clean and renewable energy in the country, a Rooftop Solar plant has been installed at the Centenary Farmer’s Market in Thimphu. It is the largest solar installation in the country with a capacity of 250 kilowatts. The project which is implemented by His Majesty’s Secretariat was commissioned today coinciding with the Birth Anniversary of Her Majesty The Gyaltsuen. The plant is expected to generate over 360,000 units of electricity annually.

During the commissioning ceremony today, the Minister for Energy and Natural Resources, Lok Nath Sharma said that it is an excellent initiative to generate electricity during winter which is an off-season for hydropower.

The status of the project and power generation is displayed in the control room at CFM.

Although the rooftop solar plant is installed at the Centenary Farmer’s Market, the electricity generated will be directly fed to the Bhutan Power Corporation’s grid which means it will be supplied to the consumers.

The project has largely been undertaken by Bhutanese engineers. Apart from monitoring, testing and quality assurance by a foreign expert, 13 DeSuups from the DeSuung Skilling Programme and engineers carried out the work.

The project titled CFM Solar Rooftop started in December last year and was completed in six months.

The Bhutan Trust Fund for Environmental Conservation provided a grant of over Nu 16 M.

A little over Nu 13 M was spent on the project.

The project has been implemented to work towards the country’s energy security needs.

Likewise, the project also strives to establish the technical and economic viability of solar panels in the country and pave the way for both private and public entities in the country.

Bhutan Solar Initiative Project has been instituted under the Royal Command of His Majesty the King to advance solar photovoltaic energy initiatives in the country to build local capacity in the area.

Kuensel | Thukten Zangpo | June 3, 2023

… power import up by over 50 percent, export fall by over 80 percent

Hydropower generation saw a drop of 7.5 percent between January and April compared to the same period last year.

The overall generation was recorded at 1, 385.97 million units in the first four months of 2023 compared to 1, 498.18 million units of electricity in the same period the previous year.

Managing Director of Druk Green Power Corporation (DGPC), Dasho Chhewang Rinzin said that the decrease was because of shutdown of Tala hydropower plant for the repairs and maintenance of the underwater infrastructure from January to March 16 this year and because of poor hydrology.

In the first four months of 2021 and 2020, the hydropower generation was 1,270 million units and 1,322.87 million units respectively.

The decrease in electricity generation and increase in the domestic consumption by over 40 percent led to the fall in export of electricity by over 80 percent.

The country’s export of electricity fell to 65.33 million units as of April this year compared to 543.13 million units in the same period the previous year. In monetary terms, it decreased to Nu 268.19 million from Nu 1.85 billion.

The export figure includes only the DGPC plants–Tala, Chukha, Kurichhu, Basochhu and Mangdechhu, and excludes Dagachhu power plant. Dagachhu’s electricity export was recorded at Nu 141.77 million in the first four months.

However, the domestic consumption of electricity increased to 1, 252.44 million units worth Nu 2.44 billion compared to 872.72 million units worth Nu 1.7 billion as of April last year.

In an earlier interview, Dasho Chhewang Rinzin said that an increase in domestic consumption affects overall revenues since the domestic tariff generation is lower than the export tariff.

The DGPC has forecasted the total generation of around 10,798 million units this year from the DGPC plants.

Bhutan also had to import about 50 percent more electricity in 2023. Bhutan purchased 367 million units of electricity worth Nu 1.73 billion for four months from January to April.

The import saw an increase by additional 127 million units or Nu 927.27 million compared to the previous year.

For 2022, Bhutan purchased 240 million units worth Nu 798 million from January to March. The energy import was passed on to high voltage consumers.

According to the DGPC, the import approval for 2022 was sought from the Indian government for the first three months where the purchase was made from the Day Ahead Market of Indian Energy Exchange through a competitive bidding process.

The exchange prices are determined through double-sided auction from buyers and sellers and prices are determined through competitive bidding for every 15 minutes time block, the DGPC MD said.

Kuensel | Thukten Zangpo | June 3, 2023

600 MW Kholongchu potential funders finish project visit and will give answer soon

The much talked about 1,125 MW Dorjilung project has finally gotten a lease of life as the government has written a formal letter to the World Bank asking them to look for the funding of Dorjilung project through consortium financing.

Consortium Financing means involving other international banks as the project would be too big for the World Bank (WB) to finance alone.

It is understood that the WB is already in talks with the European Investment Bank (EIB) so far.

The Prime Minister Dasho Dr Lotay Tshering had traveled to Europe to meet among others EIB heads to seek loans for projects in Bhutan.

The last estimated cost of the project was put at Nu 74 bn, but the latest estimate could be USD 1.2 to USD 1.3 billion.

The WB will work on mobilizing the funds and there will be discussions also on the loan interest rates and payment module.

This latest move by the government means that the earlier and original plan to make Dorjilung a trilateral project built in Bhutan with funds from Bangladesh to sell power via India to Bangladesh has been dropped.

Bhutan and Bangladesh signed an MoU on the project in February 2016, but the third partner India while voicing verbal support for the project never came on board.

The old DPR of the project is being updated to meet with international best practices to get international financing for taking the project forward.

The WB being a bank is not expected to give any grant component and there is no clarity yet at what rate they will give the money.

Even if the loan interest rate is lower than the usual 10 percent loan interest rate in bilateral projects between Bhutan and India one thing Bhutan will have to factor in is foreign exchange losses when the Ngultrum depreciates against the dollar in the future.

This may bring the financial loan cost similar to or nearby those charged in bilateral projects.

For different types of loans the WB and other international lenders have different interest rates so at the end they will come up with something for Bhutan.

Till date Bhutan has never failed to pay back project loans to India in time. The effort from Bhutan will be to ensure that the WB led loans are structured in such a way that it can be paid back comfortably.

Right now there is no talks on selling power to Bangladesh via India from this project but in the future an effort could be made.

This is especially after the recent announcement that Delhi and Kathmandu have agreed to let Nepal sell power to Bangladesh via India. This opens up hope that Bhutan can do so too in the future.

Kholongchu

In terms of the 600 MW Kholongchu Project everything is ready and the government is following up strongly to get funding for the project.

Around 10 days ago the technical team of the two potential funding agencies Power Finance Corporation Ltd (PFC) and Rural Electrification Corporation Limited which are both Indian public sector power project funding companies, came here to do due diligence.

A source said, “We are very positive we might get funding. They came here did due diligence and went. Our idea is that by this month end if they can give us the conclusion that they are ready to fund us or not.”

Both of the above projects seeking international financing one from the World Bank and another from Indian government companies show an evolution in Bhutan’s hydropower journey which was previously mainly reliant on Inter-Governmental models.

The source said, “One thing is for sure which is that we won’t be able to construct like in the past using the IG model. The IG model is time tested but a little outdated now as GoI itself is not in a position to give all money in the same manner like in the past.”

While Bhutan may suffer on the front of assured funding, the building of projects through commercial loans will allow Bhutan full management control, choice of companies and technologies and also full control over the execution of the project.

P-I

On the 1,200 mw Punatsangchu I project the meeting of the eight member inter governmental committee with 4 from Bhutan and 4 from India is still not concluded. They have been given the final time extension as technical and financial issues are taking time.

They are expected to submit a report by mid of June or within this month as their Terms of Reference says so.

Earlier the Bhutanese side was in favour of the barrage while Indian officials were not very comfortable with the barrage and wanted to do some safety measures to build a dam. Stucky the consultant hired by DGPC to do the DPR of the barrage was called by the committee to answer questions.

So far both sides are only presenting things but have not gone down to discussions as such. A source said the aim is not to try to stick to positions but to find a solution as the project is too important to stick to earlier positions.

The team is trying to find some things out on its own. The presentations are done and now they will go for the discussions.

His Holiness Dudjom Yangsi Rinpoche Tenzin Yeshe Dorje visited Nikachhu hydropower project on May 22, 2023. His Holiness offered prayer and blessings for the swift completion of the project.

Kuensel | Thukten Zangpo | May 17, 2023

To lessen reliance on imported fossil fuels, the Department of Energy is developing a green hydrogen roadmap. The department has already carried out technical research and a feasibility assessment, and the roadmap is expected to be completed by the end of this year.

According to department officials, the roadmap will detail the necessary procedures and milestones for the development and integration of hydrogen as a key energy carrier across numerous industries, particularly in the transportation sector. It will serve as a model for governments, industry, and stakeholders to follow in order to coordinate efforts and investments in the hydrogen economy.

Bhutan is well-suited for creating green hydrogen through electrolysis since it has abundance of renewable energy sources, especially hydropower. Hydrogen fuel provides a steady and dependable source of electricity that may be used in a variety of industries, including mobility, industrial, and power generation.

Bhutan’s decision to concentrate on green hydrogen is consistent with the country’s aim to carbon neutrality and sustainable growth. The greenhouse gas inventory confirmed the country’s carbon neutral position, with emissions of 3.8 million tonnes of carbon dioxide equivalent (CO2e) in 2015, offset by sequestration of 9.4 million tonnes of CO2e. Bhutan exceeded the Paris Agreement’s carbon-neutral goal, reaching a net carbon sink balance of 5.6 million tonnes of CO2e.

According to a study, Bhutan’s energy consumption will be more than sixfold, and oil demand will more than sevenfold by 2050, with the transportation sector being the major emitter of greenhouse gases under business-as-usual conditions. Bhutan, on the other hand, can retain its carbon neutrality until 2050 by cutting oil demand in the transportation sector and encouraging the use of electric vehicles and public transportation.

Bhutan’s second Nationally Determined Contribution (NDC) describes the need for USD 3.44 billion in investments until 2030 to combat climate change and fulfill its climate goals.

Furthermore, Bhutan has the opportunity to reduce its reliance on imported fuel by manufacturing hydrogen domestically, improving energy security.

Bhutan purchased Nu 11.37 billion in gasoline from India last year, up from Nu 8.35 billion in 2021.

Hydrogen, like natural gas, petroleum, and liquid petroleum gas, is capable of being stored and delivered via pipelines, tankers, and hydrogen trailer vehicles.

Pipelines, however, may not be the most viable choice due to Bhutan’s geographical limitations. Tankers and hydrogen trailer trucks, for example, could play an important role in the transportation and storage of hydrogen.

Because of variables such as high capital costs of equipment and limited economies of scale in hydrogen production, the cost of hydrogen fuel is now higher than that of traditional fossil fuels.

However, the Department of Energy believes that as technology progresses and economies of scale are reached, hydrogen will become more economical and competitive with fossil fuels.

A fuel cell SUV, for example, can go roughly 90 km using only 1 kilogram of hydrogen, but a petrol-powered SUV would take approximately 6-7 liters of gasoline to cover the same distance.

The price of hydrogen for Bhutanese customers would be determined by local market conditions, infrastructural development, and government policies supportive of the hydrogen economy, according to the department officials.

There are several advantages to using electricity for hydrogen production, including the integration of renewable energy sources and energy storage. Hydrogen production through electrolysis provides an avenue for incorporating wind and solar energy into the electricity grid.

The use of electricity for hydrogen synthesis has various advantages, including the use of renewable energy sources and energy storage. Electrolysis produces hydrogen, which can be used to integrate wind and solar energy into the power system.

As Bhutan finalises its green hydrogen programme, the government also plans to produce 700MW of solar electricity, 3MW of biomass, and 50MW of wind energy by 2032. The country has a solar energy capacity of 12GW and a wind energy capacity of 760MW. India started the Hydrogen Mission of India in early 2023, emphasising the global transition to low carbon intensity and reduced reliance on fossil fuel imports.

According to the Hydrogen Council, hydrogen has the potential to meet up to a fifth of the world’s energy needs and create a USD 2.5 trillion industry by 2050.

The growing global demand for green hydrogen reflects countries’ and businesses’ efforts to decarbonise their energy sectors and minimise greenhouse gas emissions. Countries across Europe, including Germany, the Netherlands, and Spain, are developing hydrogen policies and setting targets for hydrogen production and consumption.

Similarly, in Asia, Japan, and South Korea have expressed strong interest in green hydrogen to minimise their reliance on fossil fuels and attain carbon neutrality targets.

A delegation from the Central Electricity Authority and Grid-India visited Bhutan to discuss the deviation settlement mechanism (DSM) from May 7 to 12, 2023. The team visited BHP, CHP and THP followed by meetings with DoE, ERA, BPC, BPSO and DGPC. Discussions were held on the energy accounting, billing and settlement when Bhutan comes under the ambit of DSM as per the CBET guideline 2018 and CERC Cross-Border regulation.