Druk Green Power Corporation Limited (DGPC) is an electricity utility company that operates and maintains hydropower assets of Bhutan. It was established in January 2008 through the merger of the three hydropower corporations of Basochhu, Chhukha and Kurichhu. Tala was merged with DGPC in 2009.
With an installed capacity of 1,606 MW, the company’s mission is to efficiently manage existing hydropower plants and accelerate hydropower development in Bhutan by developing new hydropower projects.
As more projects were planned and developed and the electricity grid expanded to cover every nook and corner of the country, Bhutan embarked on restructuring the sector at the start of the 21st century through the adoption of a number of new policies and legislative interventions.
Towards this commitment, we, the employees of DGPC, shall:
- Strive to maintain maximum availability of the power plants to generate and provide uninterrupted power supply for the domestic consumption as well as for export;
- Ensure that all assets are secured and safeguarded;
- Maintain assets in such a manner that they continue to meet operational requirements for the duration of their expected life and beyond;
- Improve asset management processes continually by adopting best international practices of asset management;
- Enhance asset management performance through technology upgradations and optimal use of resources;
- Comply with all applicable legal, corporate and stakeholder requirements;
- Monitor our work habits constantly and develop awareness and competency levels of our human resource for effective implementation of asset management system;
- Ensure that all asset management decisions and activities comply with the policies relating to Quality, Environment, Occupational Health and Safety and other organizational policies; and
- Communicate this policy to all employees, visitors, contractors, suppliers and other stakeholders
To perform this, we the employees of DGPC shall:
- Strive to generate and provide uninterrupted power supply for domestic consumption as well as for export by adopting best regional and international practices so as to ensure maximum availability of the power plants through continual improvement, technology upgradations and optimal use of resources;
- Minimize adverse environmental impacts due to our activities;
- Prevent accidents, injuries and occupational hazards due to our activities through continuous assessments and implementation of appropriate controls;
- Comply with all applicable legal, corporate and customer requirements;
- Constantly monitor our processes and identify potential deficiencies and implement control measures to ensure a safe working Environment and Occupational Health & Safety;
- Constantly monitor our work habits and develop awareness and competency levels of our human resource for effective implementation of Integrated Management System; and
- Communicate this policy to all employees, visitors, contractors, suppliers and other interested parties.
A YEAR IN REVIEW AND LOOKING AHEAD
Druk Green Power Corporation Limited (DGPC) had another successful year with high levels of power plant availability and water utilisation factors achieved with its operating power plants of Chhukha, Kurichhu, Tala and Basochhu, thus ensuring the optimal utilisation of its hydropower assets. Electricity exports topped 4,465 MU bringing in INR 10,080 million. The revenue contributions to the shareholder Druk Holding and Investments Limited (DHI) and the government touched Nu. 9,499 million in the form of dividend, taxes, and royalty.
The Dagachhu power plant further contributed another INR 1,056 million through its electricity export earnings. With the successful commissioning of the 720 MW Mangdechhu project during June-August 2020, there was a further provisional earning of INR 5,347 million from sale of surplus power to India during the year.
DGPC continued to make investments to build Bhutanese capacity in hydropower from project investigations and studies, to design and engineering, to project structuring and contracting, to construction and quality control, to testing and commissioning, and in the effective and efficient operation and maintenance of the power plants. A strategic priority for DGPC is to develop water-to-wire human resources to not only wean away dependence on expatriate expertise and equipment manufacturers but also to someday be competitive in the market to provide hydropower services and expertise outside of Bhutan.
In the establishment of the operation and maintenance team for the Mangdechhu project just ahead of its commissioning, DGPC played a pivotal role including the posting of key O&M personnel with experience from its existing power plants. While being fully engaged in the construction of its Nikachhu and Kholongchhu projects, DGPC continued to depute a large number of its senior officers to be engaged in the construction of the 1200 MW Punatsangchhu 1 and the 1020 MW Punatsangchhu 2 projects.
The research and development centre under DGPC is focused on applied research in a number of critical technological fields to meet the immediate needs of DGPC’s power plants while also keeping in its sights the future anticipated requirements of the hydropower sector. The R&D centre has also expanded and is providing its services to the hydropower projects under construction and to some of the domestic industries. It is being further strengthened to provide training and certification of critical skills, proficiencies and competencies to the DGPC’s technicians and engineers.
In a major breakthrough, Bhutan Hydropower Services Limited (BHSL) turned a leaf in 2019 and expanded into the highly sophisticated and technology driven manufacture of Pelton runners with its first order from Basochhu hydropower plant. Henceforth, DGPC intends to source all the Pelton runners for its power plants from BHSL. BHSL also continued to provide state of the technology reclamation services for underwater hydro-mechanical components to all the operating hydropower plants, including Mangdechhu.
During the year, Bhutan Automation & Engineering Limited (BHUTAN AUTOMATION) successfully commissioned its first SCADA system for the Kurichhu hydropower plant. It was also awarded the SCADA contract for the Punatsangchhu II project, a first since its establishment. Further, plans are being finalised to build capacity in the design and manufacture hydro-mechanical components for hydropower projects.
Druk Green Consultancy (DGC) continued to provide its services in the investigations and studies for new hydropower projects and for the renovation and refurbishment of existing power plants. DGC is also working closely with GoI-assisted hydropower projects under construction such as the Punatsangchhu I and II projects. In collaboration with the department of hydropower and power systems, DGC is also set to initiate the pre-feasibility studies of a number of pumped storage projects, which the future regional energy markets are trending towards.
The strategy for the service oriented and manufacturing entities such as the R&D centre, BHSL, BHUTAN AUTOMATION, DGC and others that are in the plans is for them to become highly competitive in the hydropower market by leveraging on the opportunities that are presenting themselves with the existing power plants, projects under construction, and future plans for developing Bhutan’s huge water resources. Eventually, such investments in diversifying within the hydropower sector are expected to enable these service providers to also venture out and cater to markets outside of Bhutan.
The construction of the Punatsangchhu I and II, and Nikachhu projects continued with increasing benefits through employment opportunities, sourcing of construction materials from domestic industries, and involvement of Bhutanese contractors in the construction activities. A recent assessment has highlighted that at least 37% of the expenditures incurred in the construction of these large hydropower projects are now getting ploughed back into the Bhutanese economy. Future hydropower projects such as Kholongchhu are being mandated to continue to give priority for employment to Bhutanese as long as the expertise is available within Bhutan and also to offload as many of the works and contracts to Bhutanese companies and contractors where the capacity exists.
Over 99% of Bhutan’s population now has access to grid electricity; a tremendous success within the overall socio-economic growth that Bhutan experienced over the last couple of decades. Every time a new hydropower project is commissioned, there has also been a spurt in the growth of small, medium and large energy intensive industries due to the access to reliable and affordable electricity making domestic industrial products competitive in the local and export markets. A similar surge in industrial growth is expected with the commissioning of Mangdechhu.
Options for reservoir and eventually pumped storage schemes for operational flexibility to complement the huge differences in generation capacity between the winter lean discharge months and the summer monsoonal months are under consideration to provide possibilities for more power allocation to industries. This could also lead to investments in alternative renewable energy in a hybrid combination with hydro to increase overall generation in the winter months. A time might have come for Bhutan to explore power allocation to industries that utilize seasonal surpluses. There is also an urgency to invest in other end-uses of electricity such as in the transportation sector and in electricity storage options including hydrogen fuel.
Today, India is Bhutan’s only market for export of surplus energy. However, India’s emerging energy scenario, one of surplus generation capacity and a buyers’ market, is something that Bhutan’s hydropower sector will have to contend with sooner rather than later. An opportunity that is emerging is the opening up of sub-regional and regional trade in electricity for which Bhutan has to prepare itself. A power trading entity with presence outside of Bhutan, that could facilitate not only the existing export of electricity but also in expanding into these new market opportunities, is already under consideration.
The RGoB recently issued a number of new guidelines to ensure the adequacy of the investigations of projects at the time of the preparation of detailed project reports, that adequate measures for quality control of equipment and civil structures are in place during construction, and that project constructions are professionally managed. A couple of other reviews and reports have also been undertaken and their recommendations are being pursued for implementation in ongoing and future hydropower projects.
A key consideration of these reviews has to do with the long-term sustainability of the investments in the face of global warming, climate change and the more local changing environment and ecology. Bhutan remains committed to protect its forests and to remain carbon neutral. The National Environment Commission is also actively considering to introduce legislation on minimum environmental flows. These will make sustainability of the hydropower resources a difficult uphill task.
A forward looking 21st Century Economic Roadmap for Bhutan is under preparation. Hydropower is expected to figure prominently in the roadmap considering its importance. The Bhutan Electricity Act 2001 is also under review and this is expected to bring clarity to the future development prospects of Bhutan’s hydropower resources.
Looking ahead, DGPC will need to continue to invest in building its human resources capacity not only to take advantage of the emerging opportunities but also to deal with the multitude of challenges the hydropower sector is faced with and will continue to face. The key to the success of DGPC and hydropower as the backbone of the Bhutanese economy will lie with the people engaged in the sector.