Author: Dotu

Kuensel | Thukten Zangpo | November 28, 2023

…sales dropped by around 19 percent in Jan – Sept

Bhutan’s electricity export witnessed a significant drop of 18.8 percent in the initial nine months (January to September), despite the consistent electricity generation. 

The recorded export sales amounted to Nu 15.04 billion, compared to Nu 18.52 billion in the corresponding period last year. 

Hydropower sales constitute over 75 percent of the total electricity exports.

In 2022, Bhutan exported electricity valued at Nu 22.66 billion, and in 2021, the figure stood at Nu 24.2 billion. The export statistics encompass power generated by Tala, Chhukha, Kurichhu, Basochhu, Mangdechhu, and Dagachhu power plants.

The overall electricity generation during the first nine months reached 8,348.07 million units (MU), a marginal decline from 8,358.46MU in the same period last year. The maintenance of Tala hydropower’s underwater infrastructure took place from January to March 16 this year.

The decrease in hydropower export sales is attributed to a considerable rise in domestic consumption.

Increased domestic consumption impacts overall revenues since the domestic tariff generation is comparatively lower than the export tariff. 

Domestic consumption during the first nine months of this year surpassed that of 2022, amounting to Nu 4.59 billion compared to Nu 4.41 billion.

The electricity export tariffs for various power plants are maintained at Nu 2.55 per unit for Chhukha, Nu 2.23 per unit for Kurichhu and Tala, and Nu 3.399 per unit for Dagachhu. In contrast, domestic sales follow a tariff of Nu 0.13 per unit for royalty energy and Nu 1.2 per unit for other consumption.

Bhutan experienced a surge in electricity imports in early 2023, procuring 50 percent more electricity than the previous year. The country purchased 367MU of electricity worth Nu 1.73 billion from January to April, marking an increase of 127MU or Nu 927.27 million compared to the same period in 2022.

The import approval for 2022 was sought from the Indian government, with the purchase conducted through a competitive bidding process on the Indian Energy Exchange’s Day Ahead Market. The exchange prices are determined through a double-sided auction, reflecting competitive bidding every 15 minutes.

Kuensel | Dechen Dolkar | November 15, 2023

Even as political parties talk about starting small hydropower projects, the 118MW Nikachhu Hydropower project in Trongsa commenced its pre-commissioning test on November 13, marking a pivotal step forward for this ambitious endeavour.

With the latest development – dam impoundment – underway, the project will carry out testing along with the charging of the water conductor system, which would take about a month.

Dam impoundment means filling water to the reservoir, which is the first step towards commissioning of the project.

Project officials said that anticipation is high as the water is expected to reach the turbine by next month, initiating subsequent wet tests on the Electro-Mechanical equipment.

Project officials said that a successful start of the initial dam impoundment ceremony signifies not only a critical achievement for the project, but bringing it one step closer to completion that will significantly contribute to the region’s energy landscape.

“As the project progresses, we are eagerly awaiting further updates on the testing phases and the eventual operationalisation of this monumental effort,” said a project official.

The Nikachhu project is set to be commissioned by end of December this year. The total estimated completion cost for the project is Nu 13.8Billion, reflecting a substantial investment in advancing sustainable energy solutions.

The total approved project cost is Nu 11.89 billion (B), which is financed through a debt-equity ratio of 65:35.

According to the Power Purchase Agreement (PPA), the levelized tariff is Nu 4.05 per unit and the initial quoted tariff starts at Nu 3.30/kWh with annual escalation till 15 years. “The tariff will increase every year.

Meanwhile, as the project nears its completion more than 100 employees have left the project and joined new projects.

The project is a 100 percent subsidy company of Druk Green Power Corporation (DGPC).

With the completion of dam, headrace tunnel, and powerhouse, the impounding of the dam at the 118 MW Nikachhu hydropower project was carried out today.

BBS | Kinley Wangchuk | November 12, 2023

The construction of the 90-megawatt Jomori hydropower project in Samdrup Jongkhar has begun. The groundbreaking ceremony for the construction of the access road to various components of the Project was held yesterday in Serthig Gewog. The construction of the project is expected to enhance the livelihoods of residents and provide job opportunities.

The 20-kilometre access road will connect the tunnel, the dam, and the powerhouse for the Jomori hydropower project.

Two contractors will carry out the construction of the access road. It is expected to be completed in eight to 12 months.

During the groundbreaking ceremony, the Secretary for the Ministry of Energy and Natural Resources said all the construction works of the hydropower project would be carried out by Bhutanese.

“Project design work, engineering, project management, construction, and commissioning work will be done by Bhutanese.”

The project is expected to be completed in four and a half years. It is expected to cost about 8.8 billion ngultrum.

The completion of the project is expected to provide the people of Lauri, Serthig, and Langchenphu Gewogs in Jomotshangkha Dungkhag with a reliable power supply. Residents of the three gewogs currently struggle with erratic power supply for months, especially during the monsoon.

“With this project, I think the problem of erratic power supply will be resolved. Currently, we face power outages for months,” said Sangay Yuden, a shopkeeper.

“Villagers here grow vegetables and we will be able to sell them here. So, we can earn income and we will get a reliable power supply,” said Kesang Wangchuk, a resident.

“We have a power supply here but it is not reliable. We have to stay without a power supply for a month sometimes. With this project, I hope we will receive a reliable power supply,” said Melem Zangmo, another resident.

“The project will provide employment opportunities here. Youth having relevant skills will return to the village and can work here. So, everyone is happy to get this project,” said Lobzang Dorji, Lauri Mangmi.

According to a news release from Druk Hydro Energy Limited, the development of small and medium-sized hydropower projects with capacities of up to 150 megawatts is to enhance domestic energy security, stimulate grassroots economic activities, and generate employment opportunities.

Kuensel | November 7, 2023

His Majesty The King visited India from November 3 to 10, 2023

1. His Majesty The King, accompanied by senior officials from the Royal Government of Bhutan, is paying an official visit to India from 03-10 November 2023. His Majesty travelled to the States of Assam and New Delhi. From New Delhi, he will be travelling to Maharashtra. This was His Majesty’s first official visit to Assam and will be his first official visit to Maharashtra.

2.​During the visit, His Majesty and the Prime Minister of India held discussions on the entire gamut of bilateral cooperation and regional and global issues of mutual interest. The External Affairs Minister Dr. S. Jaishankar called on His Majesty.

3.​His Majesty commended the excellent organization of the recently concluded G20 Summit hosted by India, and forging consensus for constructive decisions and outcomes contained in the Delhi Declaration. He particularly appreciated India’s efforts in effectively integrating the interest and priorities of the countries in the Global South in the G20 deliberations and outcome documents.

4.​India and Bhutan enjoy long-standing and exceptional bilateral ties characterized by utmost trust, goodwill, and mutual understanding at all levels. The visit provided an opportunity for the two sides to discuss various aspects of the multi-faceted bilateral ties and forge understanding to futher cooperate across diverse sectors.​

5.​The two leaders expressed satisfaction with the significant progress made since their last meeting in April 2023. They positively assessed expanding partnership between the two countries, including in new areas of connectivity in its broadest form, cross-border trade infrastructure, trade and mutual investments, energy, health, education, skill development, space technology, and environment conservation, and close people-to-people contacts.

6.​His Majesty shared valuable perspective and insights on ongoing reforms process underway in Bhutan. He conveyed appreciation for the invaluable support that the Government of India continues to provide for Bhutan’s socio-economic development.

7.​In his interaction with His Majesty, Prime Minister reaffirmed India’s abiding commitment to its unique ties of friendship and cooperation with Bhutan and reiterated continued and full support to the socio-economic development in Bhutan based on the priorities of the Royal Government and as per the vision of His Majesty.​​

8.​The Bhutanese side thanked GoI for the timely release of development assistance to ensure smooth and uninterrupted conclusion of crucial projects under the 12th Five Year Plan (2018-2023). To take the exemplary bilateral partnership forward, the Indian side reiterated commitment to step up support for Bhutan’s 13th Five Year Plan, which was welcomed by the Bhutanese side.

9.​Hydro-power cooperation has been an important pillar of India-Bhutan bilateral economic partnership and it has been a productive partnership for both countries. The two sides welcomed export of surplus power by Basochhu hydro power project through the Indian Energy Exchange beginning October 2023 paving the way for access to another energy market.

10.​The two sides expressed satisfaction with the progress in construction of the 1020 MW Punatshangchhu-II hydro power project and looked forward to its early commissioning in 2024. They noted with satisfaction the progress made towards speedy conclusion of the Punatsangchhu-I hydro power project. The two sides reiterated the importance of cooperation in hydropower sector, and their commitment to advancing it further.

11.​It was agreed to extend the existing India-Bhutan energy partnership in hydro to non-hydro renewables, such as solar as well as green initiatives for hydrogen and e-mobility. The Indian side assured necessary technical and financial support for projects in these areas.

12.​In terms of new areas of partnership, which now encompasses Startups, Space and STEM education, both sides welcomed the progress made in space sector cooperation, including the launch of the first satellite jointly developed by India and Bhutan and the inauguration of the satellite’s ground earth station in Thimphu this year. The two sides expressed satisfaction on the increased collaboration in the field of education, with emphasis on STEM disciplines. The Indian side welcomed Bhutan’s decision to join the International Big Cat Alliance (IBCA).

13.​During the visit to Assam, Hon’ble Governor of Assam Shri Gulab Chand Kataria hosted a dinner in honour of His Majesty. Hon’ble Chief Minister of Assam Dr. Himanta Biswa Sarma called on His Majesty and discussed a wide range of issues, including rail connectivity, cross-border trade infrastructure, economic cooperation, tourism, education, skill development, environmental conservation, and nurturing people to people connections.

14.​To further expand bilateral cooperation on trade, technology, cross-border connectivity, mutual investments, education and people to people connections, following was agreed upon:

(i)​To undertake the Final Location Survey (FLS), in consultation with the Bhutanese side, of the proposed cross-border rail link connecting Kokrajhar in Assam to Gelephu in Bhutan through GoI support. The two sides noted successful completion of the Preliminary Engineering-cum-Traffic (PET) survey of the rail-link by Indian Railways. The two sides also agreed to consider establishing rail-link between Banarhat (West Bengal) and Samtse (Bhutan).

(ii)​To designate Darranga (Assam)/Samdrup Jongkhar (Bhutan) as immigration check post between Bhutan and India to facilitate the entry and exit of third country nationals by land route for enhancing connectivity, and promoting tourism.

(iii)​GOI to positively consider Bhutan’s request for concessional financing in the area of skill development and capacity building under the GyalSung Project.

(iv)​To designate Haldibari (West Bengal) – Chilahati (Bangladesh) rail route as an additional trade route for Bhutan’s trade with Bangladesh.

(v)​GOI to provide bridge financing for the period between 12th and 13th Five Year Plans of Bhutan for GoI assisted projects and schemes.

(vi)​To strengthen trade infrastructure, including by suitable upgradation of the existing Land Customs station at Dadgiri (Assam) to Integrated Check Post through GOI support along with development of facilities on the Bhutanese side at Gelephu (Bhutan).

(vii)​To strengthen collaborative framework in environmental conservation, wildlife preservation, forestry under the framework MoU for developing cooperation in the areas of environment, underscoring shared commitment to safeguarding the ecological diversity of the region.

(viii)​To allocate additional MBBS seats for Bhutanese students in medical colleges in Assam as an endeavour to ensure access to quality medical education and training to Bhutanese nationals.

(ix)​To double the outlay under Ambassador’s scholarship for Bhutanese students pursuing higher education in India.

15.​From New Delhi, His Majesty will travel to Mumbai. In Mumbai, Hon’ble Chief Minister of Maharashtra Shri Eknath Shinde will call on His Majesty. His Majesty will also meet Hon’ble Governor of Maharashtra Shri Ramesh Bais. His Majesty will also interact with Indian business leaders in Mumbai to explore new avenues for expanding economic and commercial ties between India and Bhutan.

16.​The visit of His Majesty The King reinforced the long-standing tradition of regular high-level exchanges between the two countries. His Majesty extended an invitation to Prime Minister of India to pay an official visit to Bhutan. Hon’ble Prime Minister accepted the invitation; dates for the visit will be decided through diplomatic channels.

Facebook-His Majesty King Jigme Khesar Namgyel Wangchuck | November 1, 2023

His Majesty The King granted a Royal Kasho to appoint the Interim Government, which will carry out the routine functions of the Government during the election period.

In accordance with the Constitution, the Interim Government is appointed by The Druk Gyalpo to function for a period not exceeding 90 days, to enable the Election Commission to hold free and fair elections. The Chief Advisor of the Interim Government is the Chief Justice of the Supreme Court, Chogyal Dago Rigdzin.

The other Advisors are: Dasho Penjore, RMA Governor, Dasho Chhewang Rinzin, DGPC MD, Dasho Karma Yezer Raydi, Chairperson, DHI, Major General Dorji Rinchen, Deputy COO, RBA, Karma Hamu Dorjee, Chairperson, RCSC, Deki Pema, Chairperson, ACC, Tashi, Auditor General, RAA, and Phuntsho Rapten, Eminent Member, National Council.

The Interim Government received an Audience with His Majesty The King in the Throne Room of Tashichhodzong, for their Inaugural ceremony.

Meanwhile, the Prime Minister and Cabinet Ministers held a concluding session of the Lhengye Zhungtshog, marking the dissolution of the Government earlier this morning.

Following the Inaugural ceremony, the Interim Government and the outgoing Prime Minister and Cabinet together offered prayers and Karmi Tongchoey at the Kuenrey of Tashichhodzong to commemorate the auspicious 15th Anniversary of His Majesty’s Coronation.

Bhutan Today | Tshering Dorji | October 29, 2023

…Feasibility studies for four other small hydro projects consisting of 45MW Gamri-I, 26MW Druk Bindu-I and II, 20MW Begana, and 90MW Jomori are nearing completion after which construction will be immediately initiated

The annual electricity generation from the plants in operation in 2022 reached 10,752 million units (MU). Out of this, 3,295 MU was consumed domestically, while 7,819 MU was exported to India. Notably, the Mangdechhu hydropower plant alone contributed Nu. 12,542 million to the total gross revenue of Nu. 27,887 million generated in 2022. For the Mangdechhu hydropower plant, a principal loan repayment of Nu. 6,962 million and an interest payment of Nu. 5,033 million were made in 2022. In April 2023, during His Majesty The King’s visit to New Delhi, the export tariff of the Chhukha hydropower plant was revised from Nu. 2.55 to Nu. 3.00 per unit, with retrospective effect from January 1, 2021.

As of July 2023, the physical progress of the Punatsangchhu I and II projects stands at 87.74 percent and 95.42 percent, respectively. Additionally, the 118MW Nikachhu hydropower project is nearing completion and is set to be commissioned by the end of this year. The Punatsangchhu II project remains on track for commissioning in December 2024.

The Basochhu project is marking a significant milestone by directly selling power through the Indian power trading market at a rate of Rs. 10 per KWh, signifying its entry into the power market.

Prime Minister Dasho Dr. Lotay Tsherig announced during the 51st Meet the Press that three phase-I small hydro projects, with a total generation capacity of 104MW, are currently under construction. Financing instruments, such as raising capital through issuing renewable energy bonds, are being explored for these projects, which are expected to be commissioned by 2025. The Prime Minister mentioned that the three projects, which include the 90 MW Jomori under Samdrup Jongkhar, 54 MW Gamri I under Trashigang, and 26 MW Druk Bindu (I & II) under Samtse, have undergone public consultations, received approval, and had the tender process initiated. Additionally, the government has engaged in discussions with multilateral banks and explored new funding mechanisms for these projects.

Furthermore, feasibility studies for four other small hydro projects, including 45MW Gamri-I, 26MW Druk Bindu-I and II, 20MW Begana, and 90MW Jomori, are nearing completion, after which construction will commence. Discussions are ongoing with Indian financial institutions as financing sources to resume the construction of the 600MW Kholongchhu hydropower project.

The “Renewable Energy for Climate Resilience Project,” a utility-scale 17.38MW Sephu solar PV project with funding support of USD 18.26 million from the Asian Development Bank, is in progress. This project is expected to generate 25MU of energy annually and is anticipated to be commissioned in December 2024, marking a significant milestone towards energy diversification and enhanced energy security.

Looking ahead, Bhutan’s energy sector is developing a comprehensive strategy for the next decade, focusing on objectives, strategies, policy reforms, investments, and programs. This holistic approach aims to achieve diversification, efficiency, reliability, and socioeconomic growth, ensuring a resilient and sustainable energy future. The strategy includes various aspects, such as hydropower and non-hydro renewables, capacity enhancement, and job creation. It represents a robust framework that will shape Bhutan’s energy trajectory and contribute to the country’s GDP.

To achieve energy security, diversification of energy sources is a key strategy in Bhutan. This involves the construction of various hydropower facilities, ranging from large-scale projects like the 1,125MW Dorjilung to smaller initiatives like the 18MW Suchhu. Feasibility studies for energy storage projects, such as the 1,800MW GongriJerichhu pumped storage projects, are also prioritized.

Integrated energy solutions are being pursued to improve energy access, including projects like the 5MW agri-solar and 1MW rural energy supply, ensuring modern energy availability even in remote areas like Lunana. Bhutan is also developing a national hydrogen roadmap and strategy to attract investments and diversify energy resources, including exploring the implementation of a 5MW hydrogen project.

This comprehensive approach will be realized through various initiatives, including strengthening transmission and distribution networks, establishing a 400kV eastwest link, reinforcing power pooling stations, implementing smart grid technology, and facilitating cross-border power trade. Reforms in policies and regulations involve the formulation of energy acts, regulations, and guidelines, as well as the development of a national energy policy aimed at enhancing energy security, affordability, and efficiency.

In the short term, strategies for energy security include importing power from the Indian power markets. Significant investments are being made in renewable energy projects. This includes the development of utility-scale solar facilities, solar rooftops in public institutions, and promotion of prosumers, wind power projects, solar thermal projects, and bioenergy projects. Providing employment opportunities within the power sector, as well as jobs generated by power generation projects under construction, is a key priority. Hydropower continues to be a key driver of Bhutan’s economic growth. Bhutan’s abundant rivers offer a significant hydropower potential, allowing the country to harness renewable energy sources. Hydropower is clean, sustainable, and helps reduce dependence on fossil fuels, contributing to environmental conservation and mitigating climate change.

BBS | Passang Dorji | October 27, 2023

After years of anticipation, construction of the Druk Bindu Hydropower Project is now officially underway. The groundbreaking ceremony for the construction of a crucial 4.5-kilometre access road to the Druk Bindu 1 and 2 powerhouses was held in Tendruk today. The project will be completed in two stages, Druk Bindu 1 and 2, with a combined installed capacity of 26 MW.

After more than a decade of discussions and planning, the hydropower potential of Tendruk will finally be harnessed.

Talks to initiate the project began in 2009. Initially, the Bhutan Power Corporation explored the project sites and suggested an installed capacity of 12 MW. However, in 2015, the Druk Green Power Corporation recommended an installed capacity of 18 MW, reflecting the growing energy needs and potential of the region. It was eventually approved for construction with an additional 8 MW to be taken up under the implementation of the Small Hydropower Projects, this year.

Dasho Chhewang Rinzin, DGPC’s Managing Director said, “currently the power supply for various places in Samtse comes all the way from Chhukha. In cases of power disruptions, the Druk Bindu project will help Samtse get a reliable power supply.”

Speaking at the ceremony, the Energy and Natural Resources Minister said the power supply will not only enhance the quality of life and boost economic prospects but also provide new job opportunities for Tendruk and nearby residents.

“We, the residents of Tendruk, are extremely happy with the commencement of the project. Most of the residents have been eagerly waiting for the project and they were even willing to give their lands for the project,” said Karma Wangchuk, a resident.

“With the start of the project, we expect to get more jobs and we are also anticipating a good business for business community in Tendruk. Moreover, we hope the project will also help enhance the local economy here,” said Sonam Dorji, who is also a resident.

Moreover, the Small Hydropower Projects are also expected to help develop the capacities of local construction companies. The Druk Bindu Hydropower Project will be taken up by Hi-Tech Company Private Limited.

The DGPC will be financing Nu 3.7 B required for the project.

The project is expected to be completed in three and a half years. Once complete, the project will benefit over 5,400 residents of Tendruk Gewog and the surrounding areas.

Business Bhutan | Sherab Dorji | October 21, 2023

Hydropower revenue saw a dip of about Nu 0.9 billion (bn) in July and August this year as compared to the same month in 2022. This is attributed to the Dagachhu Hydropower Corporation Limited (DHPCL), which didn’t produce any units of electricity during these two months.

The country generated power revenue worth Nu 7.6bn this year in the months of July and August. Last year, the revenue generated was around Nu 8.5bn. This is thus a decrease by about Nu 0.9bn.

Similarly, the overall generation of power was recorded at 3,524 million units in July and August 2023 compared to 3,174 million units of electricity in the same months of last year.

The revenue generation and electricity production units include Basochhu Hydropower Plant (BHP), Chhukha Hydropower Plant (CHP), Kurichhu Hydropower Plant (KHP), Tala Hydropower Plant (THP), Mangdechhu Hydroelectric Project Authority (MHPA), amongst others.

From the six hydropower projects, MHPA generated the highest revenue through export sales in July and August with about Nu 2.3bn and about Nu 2.2bn respectively and KHP generated the least with about Nu 13.48 million (mn) and about Nu 16.01mn respectively through export sales.

In terms of domestic sales, BHP generated the highest revenue with about Nu 64.84mn and Nu 64.62mn in July and August respectively, while CHP made the least revenue in July with Nu 13.52mn and MHPA with Nu 26.28mn in the month of August this year.

In July and August this year, THP generated the highest power with about 830 million units and 827 million units respectively as compared to about 698 million units and 808 million units in the same month last year.

Similarly, the least power was generated by KHP in July and August this year with about 47 million units each as compared to 47 million units and 48 million units in the same month last year.

According to the State of The Nation’s report 2023, the annual electricity generation from the plants under operation in 2022 was 10,752 million units, of which 3,295 million units were consumed domestically, and 7,819 million units exported to India.

From the total gross revenue of about Nu 27.88bn generated in 2022, MHP alone contributed about Nu 12.54bn in 2022.

Meanwhile, three phase-I small hydro projects with a total generation capacity of 104MW are under construction and financing instruments are being explored including raising of capital through issuing renewable energy bonds. The three projects are expected to be commissioned within 2025. In addition, four more small hydro projects, namely the 45 MW Gamri-I, the 26 MW Druk Bindu-I and II, the 20 MW Begana, and the 90 MW Jomori, are nearing completion of their feasibility studies. Following this, building will start right away. Continued negotiations are being held with Indian financial institutions regarding potential funding sources to restart the 600 MW Kholongchhu hydropower project, the report stated.