WATER RESOURCES IN BHUTAN

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HYDROPOWER DEVELOPMENT IN BHUTAN A PERSPECTIVE
BIMSTEC WORKSHOP ON SHARING OF EXPERIENCES IN
DEVELOPING HYDRO PROJECTS 30th 31st October
2006, New Delhi
Country Presentation Bhutan
Tashi Dorjee Department of Energy, MTI Kencho
Dorji Chukha Hydropower Corporation Ltd.
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Outline of the Presentation

• Bhutan Salient Features
• Institutional Set-up for Energy Sector
• Hydropower Potential
• Energy Sources Status of Hydropower Development
• Economic Impact of Hydropower
• Future Plans for Development of Hydropower
• Planning and Policy interventions to enhance the
  role of hydropower
• Opportunities Challenges for Hydropower
  Development
• Electricity Act 2001
• Role of Private Sector
• Conclusions

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Bhutan Salient Features

• Located in the eastern part of the Himalayas
• Area 38,394 Sq. Km
• Population 672,425 (69.1 living in rural
  areas)
• Altitude range from 100 above 7500 m above mean
  sea level
• 170 Km north south distance and 340 km east west
  distance
• 72 under vegetation cover
• Climate Wet summer monsoon and cool dry winters
• GDP per capita, 2004 843 US
• GDP growth, 2004 at 2000 prices 7.5
• Overall National electrification coverage 50
  (60 of rural areas still non-electrified)

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Institutional Set-Up for Energy Sector

• Under Ministry of Trade Industry
• Electricity Renewable Energy Policy, Planning
  Regulations
• Utility functions (Generation, transmission
  Distribution companies) CHPCL, KHPCL, BHPCL,
  BPCL
• Project Authority Tala
• Import of Fossil Fuels (Trade)
• Under Ministry of Agriculture
• Fire-wood, food and animal draught power

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Energy Sector Organization
Ministry of Trade Industry
Department of Energy (Policy, Plan, Regulation)
Department of Trade Fossil Fuels
Project Authority like Tala
Power Corporations like BPCL, CHPCL, KHPCL,
BHPCL, Proposed DHPC
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Organogram (Dept of Energy) w.e.f. 1 July 2002
DEPARTMENT OF ENERGY
Hydromet Services Division
Planning Coordination Division
Renewable Energy Division
Bhutan Electricity Authority
Meteorology Section
Hydrology Section
Flood Warning Section
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Functions of Dept of Energy

• Formulation of Macro-Level National Plans,
  Policies, Programmes Projects and coordination
  of energy sector activities.
• Provide technical advice/support to RGoB on
  energy issues
• Monitoring Evaluation of programmes and
  projects
• Techno-economic budgetary clearance of large
  energy projects and technical sanction of small
  RGOB funded Projects.
• Electricity Regulations (Bhutan Electricity
  Authority- interim measure)

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Hydropower Potential and Status (as of October
2006)
Hydro Power Backbone Of Bhutanese Economy
Hydropower potential 30,000 MW Technically
feasible 23,760 MW Current installed
capacity 468 MW(1.5) Capacity by December
2006 1488 MW(5) Three Main Regional
Basins Basin I 4819 MW, 20874 GWh Basin II
8182 MW, 25842 GWh Basin III 10759 MW, 52531 GWh
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List of Potential Hydropower Projects identified
in PSMP 2004
River basin Nos. of Projects Identified Total Installed Power Potential (MW) Total Mean Annual Energy (GWh) Plant Cap./ Load factor Remarks on the study status
Amochhu 6 2060 9656 0.44-0.62 Desktop (5) PFR (1)
Wangchhu 10 2740 11139 0.29-0.63 Desktop (4) Recon (2) DPR (2) Under constr. (1) Op. (1)
Total for Basin I 16 4800 20795
Punatsangchhu 19 8099 25495 0.19-0.72 Desktop (9) Recon. (3) PFR (1) FR (1) FR pro (1) DPR (2) Op (2)
Total for Basin II 19 8099 25495
Mangdechhu 17 3889 18322 0.50-0.57 Desktop (10) Recon (4) FR (3)
Drangmechhu 20 6692 33422 0.45-0.63 Desktop (13) Recon (4) FR (2) Op (1)
Small rivers 4 280 1213 0.47-0.51 Desktop (4)
Total for Basin III 41 10861 52957
 Total for all Basins 76 23,760 99,247 0.48 (Avg.)  
Developed 4 sites 468 2540 0.61 lt2
Under Dev. 1 site 1020 4865 0.54  
By end 2006 5 sites 1488 7405 0.58 6
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Sources of Energy Status of Hydropower
Development

• Primary energy Bio-mass (1.2 million m3 per
  annum consumption, 1.8 m3 per capita) for
  lighting, cooking and heating
• Import during 2005 of Kerosene (12545 kl), Diesel
  (51,440 kl), Petrol (13,775 kl), LPG (4472 MT)
  increasing demand !
• Solar PV installed 343 kW
• Diesel Power installed capacity 16.404 MW
• Hydroelectric installed capacity 468.068 MW,
  2576 GWh (1.5 of total potential) without Tala

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Status of Hydropower Development
Sl. Hydro Plant MW/GWh Remarks
1.0 Chukha 336/1860 1986-88
2.0 Kurichhu 60/400 2001
3.0 Basochhu I 24/106 2001
4.0 Basochhu II 40/186 2004
5.0 Tala 1020/4866 Sept. 2006-Dec. 2006
6.0 Mini/Micro 8.068/24 1967-2005
Total 1488.068/7442 5 of total
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Impact of Hydropower on the National Economy

• Key to achieving economic self reliance
• Prior to harnessing of hydropower, Bhutanese
  economy almost entirely dependent on foreign aid
• In the 9th Plan (2002-2007) about 46 dependent
  on external aid.
• Revenue from sale of electricity provided 45 of
  national revenue (gt60 after full commissioning
  of Tala).
• Electricity Sector contribution to GDP 12
  (expected to be increased to 30 once Tala in on
  line)
• 75 of hydropower generation exported to India.
• Earnings from this sector ploughed back into the
  social sector.
• Large social spin-off benefits
• Sustainable development of natural renewable
  resources and contribute to mitigating GHG
  emissions
• Affordability
• Domestic tariff kept low to stimulate economic
  growth.
• Encouraged development of large industries that
  consume 70 of total electricity consumption
  within the country (peak internal demand 120 MW)
  
• Rural electrification given high priority (100
  electrification by 2020).
• Environmentally benign
• All major rivers in Bhutan flow through deep
  valleys.
• No settlements effected.
• Run of the river projects
• Catchment well conserved (72 forest coverage)

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Future Plan for Hydropower Development

• 20 Years Power System Master Plan (2003-2022)
  updated
• Six Projects (4484 MW, 21085 GWh) short-listed
  for development during 2007-2024, short-listing
  by Multi Criteria Analysis (70 Techno-economic,
  30 Socio-environmental).
• Total investment required US 3,660.8 million
  (About US 200 million per annum requirement for
  244 MW per annum capacity addition
• Average development cost estimate gt 0.835 million
  US per MW

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Planning and Policy interventions to enhance the
role of hydropower

• Vision 2020
• 3000 MW Generation Capacity addition by 2017 (
  4484 MW addition by 2025 )
• Electricity for all by 2020
• 20 Years Power System Master Plan (2003-2022)
  updated
• RE Master Plan Integrated Dzongkhag wise
  electrification

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Hydropower projects in pipeline for development
in the next 20 years
Sl. Project MW, GWh/a Timeline
1.0 Punatsangchhu-I 1095, 5377 2007-2012
2.0 Mangdechhu 672, 2910 2009-2014
3.0 Punatsangchhu-II 992, 4667 2011-2016
4.0 Chamkharchhu-I 672, 3208 2014-2020
5.0 Chamkharchhu-II 568, 2714 2018-2023
6.0 Kholongchhu 485, 2209 2020-2024
Total 4484, 21085
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Hydro Development Opportunities Challenges

• Renewable, Clean form of Energy
• CDM Substitution to fossil fuels/reduction in
  GHG emission
• Export /Market demand in India and South Asia
  (peaking energy)
• Benign environment (political, social
  physical/techno-economic).

• Resources constraints (capital intensive skills
  technology !)
• Conservative Environment laws !
• Risks (long gestation, weather, geology,
  seismology)
• Market (pricing, competition)
• Transport cost (land locked !)

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• Electricity Act 2001
• - Provides the legal framework for regulation of
  electricity industry in the Kingdom
• - Provides mechanisms for licensing and
  regulating the operations of Power companies
• - Defines the roles and responsibilities of
  suppliers and protect the interests of the
  general public

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Private Sector Participation

• Present Scenario
• - Private sector in general is in its infancy
  (developing)
• - Involved in small hydro generation,
  transmission (JV with Indian firms), distribution
  system (RE works)
• - No capacity resources for large hydro
  projects development
• - IPP, Public-Private model for hydropower
  development not existing
• Power sector not in FDI Policy
• IPP Policy guidelines to be prepared soon
• Electricity Act 2001 - No license required for
  hydro capacity upto 500 kW

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Private Sector Participation

• Private participation Avoided Cost and
  Additionality.
• ADDITIONALITY Is the benefit to the
  consumers and to the economy of having the energy
  services available NOW rather than having to wait
  until the government can provide the energy
  services much later.
• Concessions to meet energy shortage.
• Not for increasing revenue from electricity
  sales.
• In Bhutans context, mainly for enhancing
  revenue.
• Public private partnership to enhance investor
  confidence.
• IPPs in small plants but subsidy maybe necessary.

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Some conclusions

• Hydropower resource has brought about immense
  development benefits all geared towards achieving
  economic self-reliance and overall socio-economic
  development of the country.
• In the Bhutanese context, large hydropower
  project has the benefit of economy of scale, as
  well as it provides large spin-off social
  benefits such as road access, rural
  electrification, employment opportunities,
  hospital, school etc and thus fulfils the
  national strategy of regional balanced
  development.
• Hydro power projects in Bhutan are mainly run of
  the river schemes and have had minimal
  environmental impact. There have been minimum
  and/or no displacement and rehabilitation of
  people living in the Project area.

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THANK YOU FOR YOUR KIND ATTENTION