DGPC had a successful year with high levels of power plant availability and water utilisation factors achieved with its Basochhu, Chhukha, Kurichhu and Tala power plants; ensuring the optimal utilisation of its hydropower assets despite the many challenges that were further exasperated by the COVID-19 pandemic. During the year, Basochhu and Tala achieved their highest-ever generation since their commissioning. The revenue contributions to the shareholder, Druk Holding and Investments Limited, and the government touched Nu. 10,062.82 million in the forms of dividends, royalties and taxes. Dagachhu hydropower plant also achieved its highest-ever generation since its commissioning.
DGPC made all efforts to ensure continued uninterrupted electricity supply as the country struggled to keep the COVID-19 pandemic at bay. From the onset of the pandemic in early 2020, in keeping with the evolving best practices and directives of the government, DGPC remained alert and was quick to respond with safety protocols and work habit changes to safeguard its employees and ensure continuity of business. Strict implementation of social distancing measures, isolating critical operation and maintenance groups from the rest of the employees, and instituting work-from-home environments played a pivotal role in mitigating the spread of infectious disease at the workplaces and more critically at the power plants.
Even with the very restricted environment within which it had to operate in terms of the mobilisation and movement of resources, DGPC completed the arduous and time-consuming annual maintenance of all its power plants thus ensuring the availability of all the generating units on the arrival of the monsoon rains. There was no generation loss during the year on account of the pandemic. Under the initiative of DHI, DGPC contributed Nu. 550 million to the national COVID-19 Relief Fund in response to the pandemic as a part of its corporate social responsibility. On the other hand, DGPC also benefited from Druk Gyalpo’s COVID-19 Relief Fund through the waiver of Nu. 51.20 million in interest on its loans during the year.
To extend the useful life of its generating assets and improve their performance, DGPC continued to invest in the renovation and refurbishment, and the modernisation and automation of especially the Chhukha, Kurichhu and Tala power plants. Further, apart from its major mandate of operating and maintaining the power plants, DGPC continued to play a key role in accelerating hydropower development in Bhutan and building Bhutanese capacity ranging from project investigations and studies, to design and engineering, to project structuring and contracting, to the actual construction of projects. This helped to further strengthen the competencies and expertise in hydropower within DGPC.
Druk Green Consultancy (DGC) intensified its efforts to build its capacity and provided support to the existing power plants in resolving major technical problems apart from taking forward its main mandate of undertaking several important field investigations and studies for new hydropower projects. For the first time, as entrusted by the government, DGC also initiated the recce level studies of three pumped storage projects.
Hydropower Research and Development Centre (HRDC) further expanded in its pursuit to create a world-class facility with a pool of resources and expertise to undertake applied research and provide specialised services in core technical areas, and help the hydropower sector keep abreast with the evolving technologies and changing environment. During the year, HRDC also initiated steps to create a centre of excellence in geological and geotechnical investigations including instrumentation while continuing to explore possibilities to provide its services beyond DGPC to the Punatsangchhu projects and to outside of Bhutan.
BHUTAN AUTOMATION completed the implementation of its first SCADA system for Kurichhu power plant and the successful retrofitting of the generator protection relays at the upper and lower stages of the Basochhu power plants. It expanded into substation automation with orders for the SCADA systems for four of Bhutan Power Corporation’s substations. BHUTAN AUTOMATION further continued with its efforts to provide SCADA systems for the 1,200 MW Punatsangchhu-I and 1,020 MW Punatsangchhu-I projects. DGPC further continued to work closely with its partner in Bhutan Hydropower Services Limited (BHSL) on restructuring the company to ensure that it becomes financially viable with expansion into the manufacturing of runners and other such initiatives.
Amidst the huge challenges posed by the COVID-19 pandemic, the Nikachhu project took initiatives to encourage Bhutanese workers to take advantage of the employment opportunities that would otherwise be normally taken up by expatriate workers. A large number of Bhutanese joined the workforce and this enabled not only the construction of the project to continue but also capacity building amongst the Bhutanese workers, which would prove to be useful in the ongoing and future hydropower construction activities. In a breakthrough, the Concession Agreement (CA) for the Kholongchhu project was concluded between the RGoB and the JV company in June 2020; thus paving the way to the start of the project construction. The negotiations for the CA had otherwise proven to be a major hurdle in moving the Kholongchhu JV project forward with the highly anticipated award of the major civil works packages for the dam, powerhouse and head race tunnel.
BHSL continued to face commercial viability issues with inadequate loading of its facilities, which had been designed to serve power plants aggregating to 10,000 MW. DGPC initiated discussions with its partner GE to buy off the latter’s 49% shareholding and to venture into the manufacturing of runners and other such underwater hydro-mechanical equipment.
The COVID-19 pandemic provided time to retrospect on the hydropower sector and serious concerns emerged about the overall energy security of the country. The domestic demand continued to grow with a number of the energy-intensive industries coming online, that had been approved in anticipation of the 10,000 MW projects getting commissioned by 2020. However, with only the 720 MW Mangdechhu project getting commissioned in 2019, the peak winter demand of a little over 400 MW hovered near the firm power energy generation capacity.
With the huge variations in installed capacity vis-à-vis the firm power generation potential from the run-of-the-river hydropower projects, there was a renewed focus on dialogue to take forward reservoir and pumped storage projects to mitigate energy and water security issues in the future, which are projected to be further aggravated by global warming and climate change. Other options such as supplementing generation in winter months through implementing small hydropower projects and harnessing alternative energy resources like solar and wind gained momentum, while for the first time Bhutan initiated dialogue on the import of electricity from India. From an overall energy security perspective and the reality of an energy surplus Bhutan becoming a net importer of energy, there was also a new perspective on investments in emerging technologies such as electric mobility and green hydrogen. These changing times and the evolving energy scenarios led the government to consider a review of its 2008 Sustainable Hydropower Policy.
DGPC continued to play its part in the evolving changes in the energy sector with the full backing of its Board and its Shareholder. Through the effective management of its assets, making strategic investments, and insulating itself from evolving risks, DGPC will continue to contribute to the growth of Bhutan’s energy sector and play an important role in ensuring energy and water security for the country.