Electricity import bill doubles, expected to keep increasing

BBS | Kinzang Lhadon | September 29, 2023

Electricity import from India more than doubled this year compared to last year. According to figures from the Druk Green Power Corporation (DGPC) the electricity import bill rose from about INR 800 M in 2022 to almost INR 1.8bn this year. The DGPC say the increase in domestic demand and decreased river flow has impacted the country’s electricity generation capacity this year. Electricity import is expected to keep increasing in the coming seven to eight years.  

Bhutan’s electricity import is purchased from the Day Ahead Market of the Indian Energy Exchange. Per unit price of electricity is determined through a day ahead market double-sided auction from both buyers and sellers.

The country imported over 240 million units of electricity from January to March, last year, at an average import price was 3.32 Indian Rupees per unit.

Meanwhile, this year, over 360 million units of electricity were imported between January and April at an increased average price of 4.9 Indian Rupees per unit.

Further, with the DGPC seeing increasing domestic demand, the import figure is projected to exceed 800 megawatts from December this year to April next year. The DGPC told BBS that a considerable increase is expected on the domestic front with a number of high-voltage consumers coming online. The per unit price is also expected to increase to an average of six Indian Rupees during that period.

However, the DGPC say the expected commissioning of the 118-megawatt Nikachu Hydro Power Project in December this year, is expected to supplement the energy supply. There are also plans to set up about 500 megawatts of solar generation capacity in the coming years.

Meanwhile, the country witnessed a decrease in hydropower generation in the first half of the year compared to the same period in the previous years.

In a previous report by the BBS, DGPC said the decrease in power generation is primarily due to poor hydrology with no snowfall in the winter months and delayed monsoon rains. The country’s peak demand during winter months is crossing 750 megawatts while electricity generation in the same period is just between 400 to 450 megawatts.