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Sephu hosts Bhutan’s first mega solar power plant

Kuensel | Yangyel Lhaden | July 13, 2023

… the installation is expected to complete by end of December 2024

The groundbreaking ceremony for the country’s first mega solar power plant with a capacity of 17.38-megawatt was held in Sephu, Wangdue yesterday.

The plant, which is expected to complete by the end of 2024, will occupy 65.49 acres in Yongtru village.

The plant can generate 25 million units of energy which would be fed to the national electricity grid. On average, an urban household consumes five-kilowatt energy. This means the Sephu plant can power 3,476 households.

Minister of Energy and Natural Resources, Loknath Sharma said, “Sephu solar plant is the first medium solar farm in the country.”

The minister said that Sephu solar plant marked the beginning of achieving a 500-megawatt energy target through solar power in the next three years. He said that the plant project is undertaken by the ministry. “The other projects would be carried out by Druk Green Power Corporation Limited.”

The government plans to achieve solar energy generation of 500 megawatts by 2025 and 1,000 megawatts by 2030.

Lyonpo thanked the people of Sephu gewog, former and current gups of Sephu, and dzongkhag for supporting the project despite the fact that there might not be immediate gains for the community. “It is a huge support from the community towards achieving the country’s energy mix and security.”

In 2021, the first planned mega solar power plant, a 30 megawatt, in Shingkhar Bumthang was dropped because the community refused to give clearance for various reasons.

The plant was expected to generate 46.19 million units of energy annually with an annual revenue generation of Nu 233.725 million.

The ministry also cancelled a project to construct a 23-megawatt wind power plant in Gaselo, Wangdue.

The Shingkhar and Sephu solar power plants and Gaselo’s wind farm were part of ministry’s plan in 2020 to install three major renewable power plants with funding from ADB. When Shingkhar solar power plant was dropped the ADB couldn’t fund the wind farm as it became economically non-viable.

As per the Renewable Energy Management Master Plan 2016, it is estimated that Bhutan has the potential to produce 12 gigawatts of solar and 760 megawatts of wind energy.

The energy department has installed a 276.7-kilowatt solar power system, besides the Sephu solar plant, and about 1,450-kilowatt solar power system has been installed by other agencies. 

The energy department installed the first 180-kilowatt grid-tied solar plant in Rubesa, Wangdue, 11.7-kilowatt grid-tied solar panel at the energy and natural resources ministry’s compound, and 80-kilowatt off-grid solar pant at Aja ney, Mongar among others.

This year, Bhutan Solar Initiative Project installed one grid-tied solar plant each at Centenary Farmers’ Market and Dechencholing with a capacity of 250 kilowatts and 500 kilowatts respectively.

Committee experts indecisive on barrage option for PHPA I

Kuensel | Dechen Dolkar | July 6, 2023

The Inter-Government Group (IGG) committee has still not decided on whether to construct a barrage and dam for the 1,200MW Punatsangchhu Hydroelectric Project (PI) in the last six months since it was formed in January.

The eight-member committee of four experts each from Bhutan and India reviewed the proposal to build a barrage to replace the dam at PI for six months.

The issue was deliberated in the Parliament yesterday. During the presentation of the Public Accounts Committee’s (PAC) review Report on Annual Audit Report (AAR) 2021-22, yesterday.

The PAC Chairperson, Bardo-Trong MP Gyambo Tshering, said that the IGG committee conducted numerous meetings and consulted with the experts and visited both dam and barrage sites.

“The final meeting of the IGG was scheduled on June 8-9, 2023 and the IGG’s report was expected by June end after which a clear decision for barrage or dam or a way forward for PHPA-1 was expected,” the Chairperson said.

Energy and Natural Resources Minister, Loknath Sharma, said that the last meeting of the IGG was done last month and no more meetings of the IGG are expected further.

“However, they could not decide and come to an agreement.”

Lyonpo said that the committee meetings were held in Delhi and Bhutan as well and they have visited the PI sites.

According to the Terms of Reference (TOR) of the committee, they were supposed to submit their report to the two governments after their meetings. It was learnt that the IGG is yet to finalise its report.

As per the TOR of the IGG, a presentation of the IGG’s progress and findings are to be made to the two governments before finalising the report.

It was learnt that as soon as a date is set, the IGG will make a presentation of its findings to the two governments. The final report will be submitted only after presenting the findings to the two governments in keeping with the IGG’s TOR.

According to sources, once the findings of the IGG are presented to the two governments, a way forward should emerge for the Punatsangchhu-I project.

“From our side, Committee for Coordinating Secretaries (C4CS) will present a report to the government of India and from their side they will appoint one secretary to present the report,” Lyonpo said, adding that then it will be decided through the diplomatic channel on the way forward.

Lyonpo said that Nu 25 billion was spent on the construction of the dam and the project has spent Nu 85 billion so far.

Lyonpo also said that every day, IDC stands at Nu 13 million, the interest rate at 10 percent and the interest rate stands at Nu 45 billion so far.

“It will cost around Nu 17 billion for barrage and complete within 3 to 4 years,” Lyonpo said.

Lyonpo said that the report would be presented to the government within July and it would take another two months to decide on a way forward.

Paro Member of Parliament Ugyen Tshering said that Pl is incurring loss to the nation in two ways, one in revenue loss and increasing interest during construction (IDC).

MP said that it was supposed to decide on which option is feasible in June this year.

The Joint Sitting endorsed all resolutions of the 7th Session, yesterday.

Donors consultation for Dorjilung HPP

A donors consultative meeting for Dorjilung HPP was held in Thimphu on July 3, 2023. The development partners from the World Bank Group, ADB, JICA, EIB, OPEC Fund for Development, Saudi Fund for Development, Kuwait Fund for Arab Economic Development and SAARC Development Fund attended the meeting.

During the meeting, the DPR for Dorjilung was presented and informed that the DPR update is ongoing with assistance from WBG. Development partners have expressed their interest in financing the project. Once the DPR is updated, there would be similar consultative meetings with the donors with the expectation of firm commitment from the partners.

On the off-take arrangement, there is an evolution of integration of the energy sector with Bangladesh, Bhutan, India and Nepal (BBIN). The bilateral agreement between Bhutan and Bangladesh is scheduled for signing in September 2023 for trading 1,500 MW of power. The event was jointly organised by MoF, DGPC and WBG.

BSIP launches 500kW solar installation

Kuensel | Sherab Lhamo and Sonam Dema | June 30, 2023

On 28 June, coinciding with the birth anniversary of Guru Rinpoche, Bhutan Solar Initiative Project (BSIP) inaugurated the 500 kW ground-mounted and grid-tied solar PV project at Dechencholing in Thimphu yesterday.

The endeavour, installation which covers a ground area of 1.2 acres, is the second of its kind under the royal command. The installation, with 784 panels, is expected to produce 835,000 units of energy annually which is equivalent to Nu 3.8 million in revenue.

A 250 kW rooftop installation on the Centenary Farmers’ Market (CFM) was completed On June 4. The 393 rooftop panels are expected to generate over 365,000 units of energy annually.

Electricity from these installations will be integrated seamlessly into the Bhutan Power Corporation’s low-voltage grid, bypassing the need for batteries.

Energy consumption in urban areas is about 5 kW per household. That means the installation at the CFM can power up to 50 households and more than 100 households can be powered by Dechencholing’s 500 kW installation.

The projects cost Nu 50 million to complete in six months.

Forty-five de-ssups were involved in the two projects besides four graduates of Technical Training Institute(TTI), three engineers, and an expert from the USA.

The BSIP was initiated under the royal command to enhance the country’s energy security, to demonstrate continued leadership in environmental conservation, establish technical and economic viability of solar PV in the country, and to build local capacity in a growing and important sector.

The phase-II of the project will install solar panels in the remaining 4.4-acres land in Dechencholing.

The project “will be implemented 100 percent by Bhutanese,” said Karma Wangdi, director of Royal Society for Science Technology Engineering and Mathematics.

The 500kW installation at Dechencholing is the largest mounted solar PV system in the country yet. CFM’s 250 kW rooftop installation is the biggest solar rooftop installation in the country.

Small hydros to ensure steady rural power supply: PM

Kuensel | Sherab Lhamo | June 28, 2023

Many rural communities in the country do not have access to a stable power supply although Bhutan is a major exporter of electricity to India.

Bardo-Trong MP Gyambo Tshering, during the question-and-answer session at the National Assembly yesterday said that people of remote areas in Samtse, Sarpang, Samdrupjongkhar, and Zhemgang dzongkhags experience frequent power outages, leaving them dependent on private generators.

The power supply is erratic in Panbang, Dorokha and Sipsu, Weringla, Jomtsangkha, and Lhamoizingkha.

The Prime Minister Dr Lotay Tshering while acknowledging the concern said that the issues would be resolved soon.

He said that the rural communities have access to only 33 kilovolts, just enough to run the household appliances and light the house. To run large machines, the supply has to be in megawatts, which the government couldn’t provide yet. “These recurring issues are not caused by low voltage but the quality of the amenities.”

Transformers, he said, are substandard. The government in collaboration with the Bhutan Power Corporation Limited plans to install quality transformers that can help detect redundancy faster.

The outages are also caused by weather conditions such as lightning and thunderstorms that cause short circuits in electric poles.

“To fix these issues, we have to insulate the wires and secure them, so that we don’t have to spend a significant amount for maintenance,” Lyonchhen said.

Challenging weather conditions, he said, delays maintenance as the team cannot reach the damaged sites on time. There are plans to relocate the electrical lines near the road, but at a higher cost.

But, to ensure constant power supply, small power plants will have increased capacity. For example, the capacity will be increased from 50 to 100 megawatts. In places like Haa, Lhuntse, and Zhemgang, the project has already started while other four places are identified for the next projects.

Such projects will help address the challenges of power fluctuations in the aforementioned places. The Druk Bindu Hydropower project will supply power to Samtse. Similarly, there are plans to start a project in Jomri that will be connected to Merak Sakteng and Dewathang. This, he said, will help to reduce power loss.

“As the use of electricity is expected to increase in the future, we are focused on increasing the production” he added.

PM attends OPEC Fund meeting

The Bhutanese | Staff | June 24, 2023

Lyonchhen Dr Lotay Tshering went to Vienna, Austria, to attend the OPEC Fund for International Development Forum scheduled on June 20.

The Prime minister spoke as the “special guest” at the one-day forum, sharing Bhutan’s stories.

The PM met the Asian Development Bank team led by the Director General of Private Sector Operations Department Ms Suzanne Gaboury.

While continuing to work closely with the ADB country office, this is the first of an interaction with the Private Sector Operations Department of the ADB.

The prime minister invited an ADB team to Bhutan for a focused approach on private sector growth.

Environment, tourism, hydro and solar energy were also some of common areas of interests discussed.

The ADB team committed their support and reinforcement to the regional and country teams.

On the sidelines of the OPEC Fund Development Forum in Vienna, Prime Minister Dr Lotay Tshering met the finance minister of Saudi Arabia, Mohammed Al-Jadaan.

He also met the heads and representatives of the Saudi Fund and Kuwait Fund.

Among others, green initiatives, tourism and loan and technical collaborations were discussed.

Wrapping up the meetings in Vienna, Austria, Prime Minister Dr Lotay Tshering sat down with the OPEC Fund team, led by the Director General of OPEC Fund for International Development, Dr Abdulhamid Alkhalifa.

He conveyed his happiness to work with Bhutan, with active works underway for OPEC to finance two small hydropower projects. The OPEC Fund is also considering the co-financing of one mega hydropower project.

 OPEC will attend the upcoming donor coordination meeting in Bhutan in next month.

Taking light to the Highlands

Business Bhutan | Tshering Pelden | June 20, 2023

The estimated cost for implementing solar energy in three villages of Lunana amounts to around USD 2.55 million

The Minister of Energy and Natural Resources, (MoENR) Loknath Sharma, said that the installation of solar energy in Lunana gewog has commenced, bringing electricity to numerous villages. However, three villages, namely Thangza, Tenchoe, and Dotag, are yet to receive power due to their significant size and the substantial funding required.

According to Minister Loknath Sharma, these three villages encompass a large area and require approximately 279 KW of power.

 “The estimated cost for implementing solar energy in these areas amounts to around USD 2.55 million. The government had presented a business proposal for solar energy in these regions to potential investors in Indonesia, but unfortunately, no commitments were made,” the minister said

Meanwhile, he reassured the public that discussions are currently underway to secure necessary funds for the solar installation in Thangza, Tenchoe, and Dotag.

“The government is actively seeking financial support while exploring various avenues to bring electricity to these three villages.”

During the parliamentary session’s question-and-answer session today, Member of Parliament (MP) Yeshey Dem from Khamaed-Lunana Constituency asked the minister about the status of solar installation in Lunana.

While responding to the MP’s question, the minister also highlighted  challenges faced in electrifying Lunana due to its remote location, comprising 37 villages and 180 households.

“Although a mini-hydro power project with a capacity of 500 KW was successfully implemented with a fund of Nu 500 million, it was unable to reach all areas in Lunana,” added the minister.

“Only 11 villages have received power, as we encountered difficulties in extending the grid electrification to the more remote areas,” he said.

 However, he expressed optimism about the progress made in solar energy efforts. Currently, there are nine solar clusters in operation, with installations already reaching Mendralgang school and Ramina village in Lunana. Additionally, Shangza village is scheduled to receive power this year.

DGPC to construct Kholongchhu hydropower project

Kuensel | Dechen Dolkar | June 19, 2023

… the project is estimated to cost Nu 54.4B

The Druk Green Power Corporation (DGPC) will construct the 600MW Kholongchhu Hydro Energy Ltd which will be financed through a debt-equity ratio of 70:30.

The DGPC is trying to arrange 70 percent of debt financing through Power Finance Corporation (PFC), and Rural Electrification Corporation (REC), both GoI non-banking financial institutions that invest in the energy sector in India. 

DGPC will have to arrange a 30 percent equity component, which the company hopes to raise through the capital markets. 

DGPC took over the 50 percent shareholding of SJVNL in January this year to become the sole owner of Kholongchhu Hydro Energy Ltd, the special-purpose vehicle created to construct and operate and maintain the project. 

The project is estimated to cost around Nu 54.40B at the 2024 price level. 

The officials from the project said that in May this year, a due diligence team from PFC and REC visited Bhutan. The closure of the debt-financing is expected to materialise between June and July 2023. 

The project officials also said that they are pursuing PFC and REC for debt-financing, which works out as Nu 38B but with financing charges, this could exceed Nu 50B.

The project officials also said that in the hope that the financial closure can be achieved within June-July 2023 and construction activities restarted immediately, the contracts for the major civil works packages such as the dam, head race tunnel, and powerhouse have been kept alive. 

“The consultancy agreement with WAPCOS has also been kept alive but under the suspended mode,” project officials said.

However, officials said that no major construction activities are taking place at the site, DGPC has a small group of officers at the site to watch the completed infrastructure as well as to continue and complete the construction of balance infrastructure works such as the roads, construction of power, and colony (residential and non-residential). 

However, officials said that at present they are under negotiation on the modality of repayment with the PFC and REC.

The project officials said that most of the energy will be consumed within the country during winter months. “We are working with the GoI for the sale of the summer surplus power to India.”

Inter-Governmental Committee on P-I unable to agree so far

The Bhutanese | Tenzing Lamsang | June 17, 2023

An eight-member expert committee had been set up by Bhutan and the Government of India (GoI) as a final attempt to reach a solution on the 1,200 MW Punatsangchu-I project.

After delays, the committee had got an extension until June 2023 and they are supposed to submit a report soon.

However, according to a reliable source despite the several presentations and talks there was no common ground reached in the last discussions held in Delhi earlier this month among this group.

The 4 experts from India stuck to the earlier position of saying it is safe enough to build a dam on the current site while the Bhutanese side did not agree and pressed for the cheaper barrage idea.

The experts from the Indian side says there there is no danger and movement of the right bank hill has subsided. They say the shear zone has come to the surface and is not deep rooted and can be fixed using piles and the dam can also be made on piles. Piles are essentially giant concrete nails driven into the mountain side to secure it.

They are insisting on the dam and saying no to the barrage and are asking why it even came up.

The Indian experts also feel that an S shaped stilling basin can be built which is not done in other places. A stilling basin absorbs the energy of the water as it leaves the dam to prevent erosion. 

The Bhutanese side does not feel it is safe so they cannot move ahead with these kinds of assumptions.

The worry for the Bhutanese side is not only the right bank hill but also the hill settlement and Bjimithangka colony above where there is some disturbance on the road side  and movement with cracks above the road.

While the Indian side say the movement has subsided on the right bank, but that is probably because there is no work and digging going on below.

Sources from the field say that the inclinometers put to give reading of any movement still show that there is some internal movement on the slope.

This makes the dam site still very vulnerable.

The Indian experts, who are mainly relying on the advice of the P-I lead consultant WAPCOS, say the dam can be built at certain angles and with piles underneath securing the base and piles driven into the right bank to pin the slide areas.

However, the Bhutanese side would not be okay with this as a lot of piles driven into the right bank in the past at huge cost had failed spectacularly twice and had failed to arrest the slide. None of the piles are functional and most of them are lost. More so as it was done under the guidance of the same consultant WAPCOS.

The Indian side is being guided by the WAPCOS under whose watch the entire problem of the right bank unfolded with failed mitigation measures but WAPCOS still has not changed its stance saying that the dam is possible.

The biggest worry for the Bhutanese side is that once the dam is built and there is a problem then it would also wipe out the P-II project downstream and the future Sunkosh project and this huge wall of water would lead to loss of human settlements and lives in both Bhutan and India downstream. The Bhutanese side is unwilling to take that risk.

The Indian experts have argued that the barrage will be impacted during an earthquake, but the Bhutanese side is confident there is a technology that can be used during construction take make it secure.

Stucky, the DGPC hired third party consultant, did many presentations on the barrage and are very sure the barrage can be done and they can manage it, but the other side is not even considering it.

The Bhutanese side feels that the piles will mean an additional Nu 25 to 30 bn in construction costs when already around Nu 24 to 25 bn has been spent at the dam site. With no agreement from both sides it is unlikely that the final report will have any solution with the deadline to submit the report being this month.

Way forward?

Once the report comes in the government will have to think of the way forward for the project.

One way forward could be Bhutan insisting the dam is not safe and going with the barrage.

If the Indian experts and WAPCOS insists on the dam, then another option is going for a legally executable agreement which asks by when they will finish and if they do not finish then they start paying Bhutan the revenue the project is supposed to earn.

Also, if anything happens to the dam within the lifespan of the dam then they will bear all the accountability and responsibility and if anything happens to the other things like the hill and other projects then they will also have to bear the responsibility.

One option is for Bhutan to look for the top up money and go for the barrage.

If nothing works, and the barrage is not agreed to then the project may have to be suspended.

With the technical experts looking like they cannot come up with a solution then another option would be to escalate the matter to the diplomatic and political level where the leadership of both countries take a decision.

The worse case scenario is for the project to be completely abandoned and in that scenario a big question will be on what about the money already spent so far.

So far more than Nu 83 bn has been spent on the project, but in case the project is abandoned it will have to be dealt differently and diplomatically as the fund is for the project and not for either government. The funds, in short, may have to sink with the project.

The minister for Energy and Natural Resources Loknath Sharma in the past had assured that this project would be sorted out before he leaves office but that looks unsure now with how things are playing out.

However, while things are not going well an official said that the P-I project is too important for both sides to not be able to agree or to be left like that and the official said both sides are consulting and working hard to come up with a solution.

A clue to the whole problem is in the traditional name ‘Bjimithangka’ which means a place with a lot of sand.

Background

The problem all started in 2008 when the then PHPA MD R.N Khazanchi proposed to change the original dam site to generate more power. The then cabinet agreed in June 2008 based on Khazanchi’s presentation.

A Joint Audit Report of the Royal Audit Authority (RAA) of Bhutan and the Comptroller General Audit of India (CAG) of 2012-13 said that the PHPA, its main consultant WAPCOS and CWC knew that there were geological weaknesses at the right bank area but still went ahead with the tendering of the dam on the same site in 2009.

Instead of conducting further investigations PHPA’s overall consultant WAPCOS, on behalf of GSI, issued a clearance for the project dam bids to be opened on 16th February 2009.

The problem made itself known with a major slide on the right bank in July 2013 which at the time the overall consultant WAPCOS and the civil consultant CWC said could be fixed with Nu 3.5 bn of mitigation measures which included concrete piles. However, despite the measures another major slide happened in August 2016 and again despite additional mitigation measures of more concrete piles and other measures the same area slid on 22nd January 2019. A total of Nu 4.85 bn spent on mitigation measures had failed.

After this, the government in the 21st PHPA Authority meeting in January 2019 insisted to the Indian consultants to come up with a comprehensive solution.

CWC was tasked to come up with a holistic solution to strengthen the Right Bank without which construction of the Dam on the right bank side could not proceed.  The report was submitted by CWC on 1st October 2019 and detailed drawings later in December of the same year.

One suggestion of the CWC was that the dam on the right bank side be constructed over 288 concrete piles driven into the ground to avoid excavating the shear zone below the right bank side

The Bhutanese side not very convinced with the idea of concrete piles under the dam for the long term and feeling the need for an overall review of CWC’s proposal called for a review in the Technical Coordination Committee meeting

The National Hydro Power Corporation (NHPC) was then called upon to do a third party review of the WAPCOS and CWC proposal.

The NHPC in mid 2020 presented its review of the CWC report as a third party and disagreed with the CWC assessment and said the factor of safety is below 1 and hence it is not safe enough to build a dam.

The NHPC instead recommended to build a smaller structure in the form of a barrage 820 meters upstream of the current site.

The project authority asked the two companies with different findings to reconcile their contradictory findings. The two companies came back giving a factor of safety of 1.4 safe enough for a dam.

However, this calls into question how the NHPC drastically changed its own stance and data to fit in with the CWC.

The government through DGPC had hired a foreign company Stucky to do a review of the review which also showed the current site to be unsafe with a recommendation for a barrage.

If the dam is abandoned of the Nu 23 bn spent on it around half of the cost in other structures like the 4 large de-silting chambers and around 11 km of tunnels can be reused for the barrage.

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