CHHUKHA HYDROPOWER PLANT

The Chhukha Hydropower project is Bhutan’s oldest mega power project. Out of the country’s several major river basins, the Wangchhu was chosen as the project site as it offered the best scope for constructing the first power project due to the existence of road links and other infrastructures.

The Chhukha Project Authority was formed in 1975 and it was entrusted with the responsibility of constructing and commissioning the project. Since no project of such a magnitude was constructed earlier, the period from 1974 to 1978 was mainly spent on infrastructure development, like access roads, schools, hospitals and residential colonies. The main civil and electro-mechanical works of the project were started in 1979. The project’s first 84 MW hydro-turbine Unit was commissioned on September 7, 1986 and by August 22, 1988 all the other three Units were commissioned.

The Chhukha Hydro Power Corporation Limited (CHPCL) was formed on July 1, 1991 under the 1989 Company’s Act of the Kingdom of Bhutan to operate and maintain the hydroelectric power plant and the transmission system and to export surplus power to India after meeting the requirement within Bhutan.

With the formation of the Druk Green, CHPCL became an operational unit under Druk Green and is renamed as Chhukha Hydropower Plant (CHP).

Project Finance

Upon the request of the Royal Government, the Government of India (GoI) offered to undertake the study for construction of a hydropower plant. In April 1973, the GoI submitted proposal for construction of the Chhukha Hydro Electric Project. On March 23, 1974, the Agreement was signed between the GoI and the Royal Government to implement the project as a joint venture project. The project was financed fully by the Government of India with 60% of the project cost as grant and 40% as loan. The loan was repayable over a period of 15 years in 30 instalments with an interest rate of 5% per annum. The completion cost of the project was Nu. 2465 million and the CHP had fully liquidated the GoI loan on December 31, 2007.

The Power Sector in Bhutan experienced a major restructuring in the year 2002 where a separate corporation, the Bhutan Power Corporation Limited (BPC) was formed to look after the maintenance and operation of transmission networks in the Kingdom as well as for the distribution of power to the domestic consumers.

Before the formation of BPC, CHP apart from generating power was also responsible for the operation and maintenance of important transmission lines. Subsequently, CHP handed over all assets, inventories, and associated manpower of the Transmission Wing of CHP to BPC on July 1, 2002. The total assets value handed over to BPC was Nu. 209,115,383.48.

Salient Features of Chhukha Hydropower Plant

Dam/Reservoir

Hydrology

Power House

Switch Yard

Operational and Financial Performance

Since commissioning of its first two Units in 1986, CHP has been meeting the electricity requirements within Bhutan, as well as exporting surplus power to India. In the initial years of operation, almost 90 percent of the power was exported to India. By year 2005 end, CHP’s annual export of energy out of its total generation had decreased to about 81.44% with the increase in domestic load. With the full commissioning of the Tala Hydroelectric Project from 2006 onwards, major share of domestic demand is met by Tala and CHP became the bulk purchaser in the western region Bhutan from 2005 onwards where the BHP energy generated is directly purchased by CHP. Power is exported to India through the Power Trading Corporation of India Limited. In Bhutan, CHP sells power to the Bhutan Power Corporation which in turn distributes to the domestic consumers.

CHP has always performed outstandingly and more so in the last five years. The financial performance of CHP undeniably is dependent on two important factors – i.e. the power tariff and river inflow. Periodic and favourable revisions of export tariff for Chhukha power has had substantial impact on the financial performance. Historic tariff revision for export and sale to BPC is shown in table below :

The tariff being constant, the volume of river inflow, especially in the pre and post monsoon period, has a major impact on the financial performance of the Corporation. This is however beyond the control of the management. Other factors also contribute to the performance. Chiefly, the amount of outages - shutdown of power plant due to failure in the grid, planned maintenance, or breakdown of machines.

Manpower

CHP Organogram