Looking Ahead

2018 did not bode too well for Druk Green Power Corporation Limited (DGPC). Two of its employees lost their lives in January when an MIV bypass pipe ruptured at THP. In June, a fire accident in the drift of the ongoing detailed investigations for Nyera Amari Hydropower Project due to presence of inflammable gases resulted in the loss of five lives.

The award of major contract packages for 600 MW Kholongchhu project continued to be delayed with the project yet to conclude a Concession Agreement with Royal Government of Bhutan (RGoB). The 118 MW Nikachhu Hydropower Project also continued to see delays due to encountering geotechnical surprises with some of the project components.

DGPC’s power plants registered the lowest generation at 6,574 MU, much below the 7,440 MU forecasted for the year due to very poor hydrology, especially in the Wangchhu watershed. Dagachhu Hydro Power Corporation Limited, a subsidiary of DGPC, also recorded the lowest generation since its commissioning.

Despite the setbacks, DGPC maintained very high levels of power plant availability and water utilisation factors in the operation and maintenance of its generating power plants. While lower generation affected overall revenues, the effective management of its resources enabled the Company to still declare a dividend of Nu. 4,500 million to the Shareholder in addition to the royalty payments to RGoB.

In the capacity of the Shareholder, DGPC continued to actively try and get both Kholongchhu and Nikachhu projects back on track. In the ongoing implementation of 720 MW Mangdechhu, 1,200 MW Punatsangchhu-I and 1,020 MW Punatsangchhu-II Hydroelectric Projects, DGPC officers on deputation hold key positions in many of the critical activities as every effort is being made to expedite these projects. The Mangdechhu project management and the Ministry of Economic Affairs entrusted DGPC with the establishment of the operation and maintenance team that would eventually take over the project from the Authority on behalf of RGoB. DGPC is working closely with Mangdechhu project management in the final phases of construction, erection and commissioning of the project.

As it aspires to excel and become world class in all aspects of the water-to-wire hydropower business, DGPC continued to invest in building its human resources with support to trainings, attachments to industries and long term studies. DGPC also adopted a new Performance Management System that more closely links performance at the individual employee level to that of the Company. DGPC expanded on its linkages to relevant global institutions in learning, research and development, while continuing to nurture existing linkages. The Hydropower Research and Development Centre (HR&DC) was established on the premises of THP to give it focus and to put it on its path to growth and expand on the Centres of Excellences. With the experience and expertise gained, HR&DC has moved beyond providing its services to DGPC’s entities to other hydropower projects and private industries. DGPC got itself ISO certified in Integrated Management Systems to further strengthen internal systems to take forward these and other new initiatives.

As DGPC expanded and grew with diversification within the hydropower sector, it established BHUTAN AUTOMATION in joint venture with Andritz Hydro for integration and manufacture of automation systems for hydropower and other related industries in Bhutan and beyond. During the year, BHUTAN AUTOMATION initiated work on a SCADA system including the replacement of governing and excitation systems for Kurichhu Hydropower Plant. Punatsangchhu-II project also placed order for its computerised control and protection system on BHUTAN AUTOMATION. For the first time, DGPC also deputed 12 of its employees for the operation and maintenance of a power plant in India as DGPC looks beyond the national borders for providing its services.

Challenges continue with resolving the teething problems of the computer control system, the nozzle injector system, and with the convergence in the underground powerhouse caverns and the failures of rock-bolts at THP. At Chhukha Hydropower Plant, investments continue to be made in rehabilitation and modernisation of the aging electro-mechanical and hydro-mechanical equipment to extend the plant’s life. There is some level of uncertainty with the pace of the future development of hydropower projects as Bhutan tries to understand the evolving energy markets. With the slowdown in new projects, Druk Green Consultancy group has been mandated to also take on the design, engineering and management of any major renovation and rehabilitation activities with the existing power plants.

There are also concerns with the performance of a few of its subsidiary companies, especially Bhutan Hydropower Services Limited. BHSL was created in joint venture with Alstom/GE for specialised services for reclamation of underwater hydro-mechanical components such as runners. The facility was created for 10,000 MW but with the delay of the 10,000 MW by 2020 projects, the facility is not loaded optimally. In 2018, BHSL expanded to manufacture Francis runners with technical backstopping from GE. Plans are afoot to expand into the manufacture of Pelton runners starting 2019 to provide more loading to the facility.

The Government of India issued a revised set of guidelines for cross border trade in electricity. This could address the long-term viability concern for Dagachhu as Dagachhu power might start to fetch better tariffs with expanded accessibility to short-term energy markets.

With the hydropower sector evolving and the felt need for diversification within and outside the sector, DGPC has started to work on its Roadmap 2030. A hydropower development strategy is likely to be endorsed by the RGoB soon. Irrespective of the changes taking place and adoption of new strategies, hydropower will remain the cornerstone of Bhutan’s economic growth and transformation. DGPC will therefore need to continue to invest in its people, grow on its present strengths and shoulder its major mandates to effectively and efficiently manage generating power plants, to play a key role in the development of Bhutan’s hydropower resources, and to be a regionally and internationally recognised hydropower generation utility now and in future.

Tashi Delek

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