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Development of the hydropower sector in Bhutan

Chhewang RinzinManaging DirectorDruk Green Power Corporation Ltd

Bhutan

Abstract

Bhutan has a huge hydropower potential estimated at 30,000 MW, out of which 23,760 MW is techno-economically

feasible for development. The harnessing of this huge natural resource started in the 1960s, and presently Bhutan has

an installed hydropower generating capacity of 1,488 MW as below:

1 Chhukha Hydropower Plant 336 MW

2 Basochhu Hydropower Plant 64 MW

3 Kurichhu Hydropower Plant 60 MW

4 Tala Hydropower Plant 1020 MW

5 23 plants (< 3 MW) 8 MW

Total 1,488 MW

This developed potential of 1,488 MW constitutes less than 5% of the total hydropower potential but contributes toover 45% of the revenues to the Royal Government of Bhutan. The power sector also constitutes about 18% of GDP.

With the availability of electricity, Bhutan has been lighted up with power supply reaching each and every corner ofthe country. More than 70% of rural Bhutan already has access to electricity. Bhutan plans to reach electricity to

each and every rural household by 2013. Electricity has had a most profound impact on the living standard,

livelihood, health, education, economic activities, and numerous other aspects of the Bhutanese society.

Industrial growth has also been spurred by the availability of cheap and reliable supply of electricity with the

industries sector accounting for more than 80% of the electricity consumed within Bhutan.

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Of the total generation, over 78% is being exported to India bringing in revenues that to a large extent finance the

socio-economic development activities of the Royal Government of Bhutan.

Considering the huge impact that the hydropower sector has had on the socio-economic development of the country,

the Royal Government of Bhutan embarked in 2008 on an ambitious mission to achieve an additional 10,000 MW ininstalled capacity by 2020; in close co-operation with the Government of India. A number of hydroelectric projectsare also being developed on the sidelines of the bilateral co-operation between Bhutan and India in keeping with

Bhutans Sustainable Hydropower Policy 2008.

The ten hydropower projects under the 10,000 MW by 2020 initiative of the Royal Government in co-operation with

the Government of India together with their implementation status are as below:

While the projects under construction are being developed under a bilateral arrangement, four of the projects

(Wangchhu, Bunakha Reservoir, Kholongchhu, and Chamkharchhu-I) will be implemented through a Build-Own-Operate-Transfer (BOOT) model through Joint Venture arrangements of public energy sector undertakings of

Bhutan and India. It is planned that, except for the 1,800 MW Kuri-Gongri project, all the projects will be under

construction by 2013.

Apart from the major projects being implemented in co-operation between Bhutan and India, Bhutan is executing a

number of projects on through other models such as joint ventures in the public private partnership arrangements

such as the 126 MW Dagachhu project. Under this arrangement, more projects such as the Nikachhu, Khomachu,

Rotpashong, Nyera Amari, and Gamri projects as below are under consideration at present :

Sl. No. Projects Capacity (MW) Implementation Model

1 Punatsangchhu-I 1,200 Under construction

2 Punatsangchhu-II 1.020 Under construction

3 Mangdechhu 720 Under construction

4 Sunkosh Reservoir 2,585 DPR under finalization5 Kuri-Gongri 1,800 ~ 3,500 DPR under finalization

6 Amochhu 620 DPR under approval

7 Wangchhu 570 Construction mode under discussion

8 Bunakha Reservoir 180 Construction mode under discussion

9 Kholongchhu 600 Construction mode under discussion

10 Chamkharchhu-I 770 Construction mode under discussion

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Bhutan is already in the process finalizing the pre-feasibility reports (PFR), feasibility studies (FS) and DPR of these

projects, while it is also considering other projects. Bhutan is exploring alternative means of financing thedevelopment of a few of the hydroelectric projects but Bhutans priority will always be to work with the

Government of India under the present mutually beneficial bilateral arrangements.

The sustainable development of the huge hydropower resources is a key area of priority for the Royal Government

of Bhutan considering the many facets of its contributions to the economy of the country.

The Royal Government of Bhutan is committed to protect and conserve Bhutans pristine environment, and theConstitution requires Bhutan to maintain at least 60% of its land under forest cover at all times. Ensuring this

commitment would also guarantee the sustaining of the huge hydropower resources of the country. As a contribution

to the overall efforts to preserve Bhutans pristine environment, hydropower projects will be required to contribute

some percentage of its revenues directly for the integrated management of the water resources. Hydropower projectadhere to all environmental legislations of the country and ensure implementation of measures to mitigate any

adverse impacts on the environment resulting from the development of hydropower project.

The Author

Chhewang Rinzinis presently the Managing Director of Druk Green Power Corporation Ltd. He is also the Chairman of the

Dagachhu Hydropower Corporation Ltd (a 126 MW hydropower CDM project under construction), and a Director on the Boardsof Bhutan Power Corporation Ltd, National Pension & Provident Fund, and DHI Infra Ltd (investing in greenfield projects other

than hydropower). He is also a Member on a number of important Committees of the Royal Government of Bhutan. ChhewangRinzin completed his Higher Secondary education from Sherubtse College in Bhutan, graduated with a Bachelor in ElectricalEngineering in 1985 and obtained a Masters in Electrical Engineering in 1992 from the University of Wisconsin, USA. From thetime of joining the Civil Service of the Royal Government of Bhutan in 1986, he was actively involved in the development of

renewable energy resources such as micro hydro, wind, solar and biomass and moved onto planning and implementing mediumand large hydropower projects. Since 1994, he has been on deputation from the Civil Service to government owned Corporateentities. He started off as the General Manager and then the Managing Director for the construction, operation and maintenance

of the 60 MW Kurichhu Hydroelectric Project. On unbundling of the power sector in Bhutan, he moved in 2004 to become theManaging Director of the Bhutan Power Corporation Ltd, the transmission and distribution utility of Bhutan. In 2008, he wasappointed as the first Managing Director of the Druk Green Power Corporation Ltd, Bhutans generation utility that is entrustedwith operating and maintaining all major hydropower plants, accelerating the development of Bhutans huge hydropower

potential of 30,000 MW for the export and domestic markets, ensuring security in the supply of electricity for the domesticmarket, and developing other renewable energy resources of Bhutan. On 17 December 2009, the National Day of Bhutan,Chhewang Rinzin was conferred the Red Scarf and the title of Dasho by His Majesty the King for dedicated service to thecountry.

Sl. No. Projects Capacity (MW) Implementation Model Status

1 Dagachhu 126 Public Private Partnership Under construction

2 Nikachhu 208 PPP FS/DPR

3 Khomachhu 327 PPP PFR

4 Rotpashong 1,230 PPP PFR

5 Nyera Amari 340 PPP

6 Gamri 102 PPP PFR