Author: Dotu

The Economic Times, India | Bikash Singh | January 25, 2024

Synopsis: Bilateral energy trade between India and its neighbors is a key building block of the integrated regional energy market. India and Bhutan have excellent relations and India has for decades assisted Bhutan in developing its hydropower. This mutually beneficial relationship is now being further strengthened.

PTC India Limited, provider of power trading solutions in India announced commencement of power supply from Nikachhu Hydroelectric Project, Bhutan to Assam under Long Term PPA.

PTC executed the PPA with Bhutan and PSA with Distribution Company of Assam (APDCL) in 2014.

Dr. Rajib K. Mishra, CMD PTC mentioned that considering the long term perspective of uninterrupted, reliable vis-à-vis cheaper power supply to cater the rapidly growing demand in the state, Assam Power Distribution Co. Ltd. (APDCL) executed this PPA. This 118 MW (2×59 MW) hydro project has provision to supply power during peak hours also which will be very helpful to meet peaking hours demand of the State. Bilateral energy trade between India and its neighbors is a key building block of the integrated regional energy market. India and Bhutan have excellent relations and India has for decades assisted Bhutan in developing its hydropower. This mutually beneficial relationship is now being further strengthened.

Kuensel | January 19, 2024

In one of the final milestones, the first generating unit of Nikachhu Hydropower Project was synchronised to the national electricity grid on yesterday. The testing and commissioning of both the generating units of 59MW each are expected to be completed within the next two weeks.

The Bhutanese | Tenzing Lamsang | January 6, 2024

One of the important features of the Gelephu Mindfulness City project as revealed in the Master Plan vision design of Bjarke Engels and team is the Sunkosh Dam.

The vision design said the final bridge, a hydroelectric dam, will be constructed on the city’s western border with a step-well retaining wall that offers viewpoints, staircases for meditative walks, and a temple. Visitors and pilgrims can ascend and descend along countless individual routes to the visitor center and temple nested on the face of the manmade cliff.

It said the Sunkosh Temple-Dam embodies in architectural form all the foundational elements of Gelephu: the harmonious coexistence of culture and nature, conceived as a hybrid child of Bhutan’s rich past heritage and its prosperous future legacy.

Given that the vision said a dam is coming up the Druk Green Power Corporation (DGPC) has been doing some technical studies and the true potential of the reservoir dam is under 5,000 MW at 4,600 to 4,800 MW.

This is much more than the 2,560 MW project that had earlier been envisioned for the project.

The idea is instead of just doing a 2,560 MW project why not take advantage of the real reservoir potential of the project and build a bigger dam and project in one location.

Given that this is a reservoir project if it is built then it can solve Bhutan’s power woes in winter when generation in the run of the river projects all fall sharply to the point that Bhutan has to import power.

The dam height could be higher than the 220 meters long Hoover dam in USA and the backflow generated from the water would be for around 70 kms all the way to the Wakletar bridge between Wangdue and Tsirang.

However, there will be no displacement of people as there are no settlements, schools or hospitals there.

It would be a multi use project beyond just power generation as it can be used for supplying water and also recreation.

These are early days for the project and it is not yet clear how it will be funded or implemented.

Sunkosh was one of the projects in the 10,000 MW by 2020 but it could not take off after issues of implementation modality and financing issues.

For many years strong attempts were made to get the project done under this model but there was no success and it lay ignored until the Gelephu Mindfulness City project.

During the 116th National Day Address His Majesty The King said that considering our current expertise, we need to enhance the installed capacity of hydropower by expediting the construction of projects such as Kholongchu, Chamkharchu, Dorjilung, Nyera Amari, Wangchu, Bunakha and Sunkosh, for which Detailed Project Reports are ready.

His Majesty said Bhutan’s electricity prices should be among the most competitive in the region so that our hydro resources are not just a source of revenue, but also an enabler of other investments.

The Bhutanese | Tenzing Lamsang | December 23, 2023

His Majesty The King outlined that one of the three priority areas to support the Gelephu project will be the energy sector including solar, wind, geo thermal and hydropower.

Following this, the Druk Green Power Corporation (DGPC) will be updating the DPRs of many of the many hydro projects and then look at raising funds and implementing them.

Kholongchu

The one that can be done the fastest among them is the 600 MW Kholongchu project as it has already built Nu 4.626 billion (bn) worth of initial infrastructure like roads, power facilities, and residential and non-residential structures needed for the project.

The former MoEA Minister Loknath Sharma had announced that the project would start construction by mid 2023 after securing funding from Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC) which are both Public Sector Undertakings of India and fund power projects. However, funds have not yet been secured.

The Managing Director of the DGPC Dasho Chhewang Rinzin said the senior management team of PFC and REC are in Bhutan and detailed discussions are going on with them. He said the Government of India (GoI) is fully supportive in availing money.

Dasho said that the funding should be secured in the next two to three months.

The total project cost is Nu 60 bn of which Nu 4.626 bn is already spent leaving around 56 bn to be raised. The funding of the project will have to be 70 percent debt and 30 percent equity. The loan that will be taken from the PFC and REC will be around 40 bn and DGPC will have to raise around Nu 16 to Nu 17 bn as equity.

This equity will be raised from DGPC’s cash flow, NPPF and local banks.

The deal has not reached closure on financing yet and the most important thing for DGPC will be coming up with equity financing. The PFC and REC will also want securities or collateral which will be the project assets itself. The deal has not yet reached the stage to discuss the loan interest rates.

The interest rates will depend in part on repayment capacity and on that the DGPC has a good track record with the GoI in bilateral projects.

Once the financing is clinched then the MD said the project can go on in full swing and it can be completed in five years by around 2028.

The project started as a joint venture with with Satluj Jal Vidyut Nigam (SJVN) Limited but due to management, financing and implementation differences DGPC regained full ownership by repurchasing SJVN’s shares in early 2023.

Dorjilung

The other next big project is the 1,125 MW Dorjilung project. Here the DGPC MD said they are in the process of updating the DPR which should be done by around March or April 2024.

Once the DPR is done then they will get into discussions on financing and the deadline is to secure all the funding by the end of 2024, after which the project will take around 5 to 6 years to complete.

The government earlier this year had written a formal letter to the World Bank asking them to look for the funding of Dorjilung project through consortium financing.

The WB is already in talks with the European Investment Bank (EIB) and could bring in the Asian Development Bank too.

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 project was initially proposed as a trilateral project between Bhutan, Bangladesh and India with Bhutan building the project with Bangladesh financing and exporting the power to them via India, but while Bhutan and Bangladesh agreed there was no response from India.

Bunakha, Wangchu and Chamkarchu

An interesting project is the 180 MW Bunakha reservoir project which would be able to store water for winter and also help the downstream projects of 336 MW Chukha, 1,020 MW Tala and 570 or 900 MW Wangchu.

The DPR has already been done but is being updated. The project will have a 180-meter-long dam.

The project was supposed to cost Nu 29 bn in around 2014 but the revised DPR will show a much higher cost now given inflation.

This project was initially listed as a JV to be done with SJVN under the 10,000 MW by 2020 but again funding and other differences led to separate ways.

Back in 2014 because of Bunakha, Chukha would gain an additional Nu 575 mn in revenue a year, Tala would gain Nu 972 mn a year and Wangchu would gain Nu 420 mn (at 2014 Chukha tariff rates).

A related and interesting project is the Wangchu project which will be down stream of Tala. Here the DGPC has two options.

One option is doing it as a run of the river project which is a 570 MW project at around nu 40 bn back in 2014.

However, the other option is to do it as a reservoir project that will store water for the winter months and this would be a 900 MW project.

The DGPC MD said they are now exploring this reservoir option given the changes in the energy market in India and they are also studying the costs and opportunities.

A project for which the DGPC has done the DPR is the 442 MW Nyera-Amari project. The project is on the Nyera Amari river that flow down from Merak-Sakteng,  into Bangtar, Pemathang and Martshala. 

The first stage of the project will be near Trashigang and the second stage in Martshala in Samdrupjongkhar.

The project cost is Nu 34.78 bn back in 2014.

The DGPC will also update the DPR of the 770 MW Chamkarchu project and see how it can be taken forward.

Chamkarchu and Wangchu were both listed as JV projects under 10,000 MW by 2020 but could not happen due to differences on the JV model between companies.

The DGPC MD said that the above projects are based in the Power System Masterplan where they are ranked higher and are the better projects and so their DPR was done and they can be taken up earlier.

Sunkosh

The biggest of all the projects is the 2,560 MW Sunkosh project. However, since the Sunkosh project comes under the larger Gelephu Mindfulness City, project there are not yet details on how the project will be taken up.

The project is estimated to cost well north of Nu 200 bn and will be a major reservoir project with tremendous potential to not only generate power, but ensure storage and generation in the winter months.

The project was in discussion in the past between Bhutan and India but got stuck due to implementation modalities and funding challenges.

So far, a press release talking about the aesthetics of the dam says the final bridge, will be hydroelectric dam, constructed on the city’s western border with a step-well retaining wall that offers viewpoints, staircases for meditative walks, and a temple. Visitors and pilgrims can ascend and descend along countless individual routes to the visitor center and temple nested on the face of the manmade cliff.

It says the Sunkosh Temple-Dam embodies in architectural form all the foundational elements of Gelephu: the harmonious coexistence of culture and nature, conceived as a hybrid child of Bhutan’s rich past heritage and its prosperous future legacy.

P II, P I, Nikachu, Solar and Wind

The DGPC MD said they will have to get going and the next one year will be taken up updating the DPR of the projects to factor in higher costs and any changes in the environment like changes in the river or river flow.

Earlier, in the 10,000 MW by 2020 GoI funding backed many of these projects but they did not happen and so a major challenge for Bhutan will be on how it secures billions in funding for these mega projects.

When comes to solar the DGPC MD said that the plan is to have 1,000 MW in solar power by 2030 by building small plants of 20 to 50 MW across the country. He said it cannot be done in a large way in one place.

On wind energy, some windfarms are possible but not at a large scale as many valleys in Bhutan do not have consistent wind.

DGPC is also doing at the possibility of doing geothermal energy in the longer term and here it will have to look at hot springs and other areas to do an assessment and see the options.

The DGPC MD said that the 118 MW Nikachu project will be done by the end of December or in January 2024. He said the project is funded by loans from the ADB and State Bank of India.

The Punatsangchu II project is making progress and is on track to be completed by mid 2024.

When it comes to the Punatsangchu I project the DGPC MD said that additional investigations are being carried out on the right bank and based on that the data will be studied by the experts.

The Project Preparedness Financing Agreement was signed between the Ministry of Finance, ADB and DGPC on December 18, 2023, for a concessional loan of USD 5 million to update the DPRs for the 404 MW Nyera Amari I&II and 180 MW Bunakha projects. DPGC will immediately initiate the updates of the DPRs. This will pave the way to ADB financing for these two important projects.

BBS | Sonam Tshering | December 7, 2023

If all goes to plan, the Nikachhu Hydropower Project in Trongsa will start commissioning from next month. According to the project management, all the major works required for electricity generation have been completed. The Druk Green Power Corporation says the project has completed almost 98 per cent of the overall work as of October this year. The project was initially planned to be completed in 2019.

According to the DGPC, all the necessary wet testing procedures which are testing water turbines are complete.

Construction works of the dam, headrace tunnel, and powerhouse have also been completed.

Following the commencement of the dam operation in November this year, the project team is set to initiate the charging of the water conductor system in the tunnel.

It is anticipated that water will reach the turbines inside the powerhouse for wet commissioning on or before 17^th December.

The Nikachhu Hydropower Project which began in 2016 is a subsidiary company of the Druk Green Power Corporation.

The 118MW project was estimated to cost nearly 12 billion ngultrum. It is being constructed by taking loans from the Asian Development Bank and commercial banks in India. The Asian Development Bank disbursed over five billion ngultrum and Indian Commercial Banks released more than three billion ngultrum for the project.

According to the project management, the Nikachhu Hydropower Plant is expected to generate 491 million units of electricity annually.

Kuensel | YK Poudel | December 7, 2023

Dubai, UAE—As Bhutan commits to advancing the development of a green economy, it unveiled the Green Hydrogen Roadmap on December 5 at the ongoing Bhutan Pavilion in Dubai.

Bhutan committed to carbon neutrality in the United Nations Framework Convention on Climate Change (UNFCCC) in 1992.

At COP15 in 2009, Bhutan declared its commitment to carbon neutrality, a promise that was reiterated in its NDCs in 2015. The second NDC in 2021 reinstates carbon neutrality through low-emission development strategies in food security, human settlements, and surface transportation.

The roadmap is part of Bhutan’s commitment to advancing the development of a green hydrogen economy to meet its energy and climate goals.

Green hydrogen is considered to be the cleanest and most sustainable energy source that can produce electricity, power industry, and enable transportation. It doesn’t generate any polluting emissions into the atmosphere.

Outlining the expert advisory groups and creating an investment packet to promote green hydrogen projects in Bhutan, the roadmap sets a goal for hydrogen pilot projects and plans to match hydrogen generation with demand. Further, demonstrates the nation’s energy strategy at a global scale.

Director for the Department of Energy, Ministry of Energy and Natural Resources, Karma P Dorji said that Bhutan has been able to launch the future of the green hydrogen roadmap to the larger world at the COP and pursue the energy for the future. “This in the long run will provide a tremendous economic opportunity for our economy.” 

“The roadmap outlines phased targets for hydrogen pilot projects, aligning generation capacity with demand growth. It establishes expert advisory groups, coordinates stakeholders and creates an investment outreach packet for green hydrogen projects in Bhutan,” he said. 

The plan, according to him, highlights opportunities and showcases a strategy for enhancing the energy value chain domestically and in the global market through the green hydrogen initiative.

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 to coordinate efforts and investments in the hydrogen economy.

Bhutan is well-suited for creating green hydrogen through electrolysis since it has an 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 of 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.

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

According to a study, Bhutan’s energy consumption will be more than sixfold, and oil demand will be 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.

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.