Author: Media and Communication


Workshop on “Power Market”

A workshop on “power market” was held in Thimphu on February 16, 2024, in collaboration with the Indian Energy Exchange. Participants from DGPC, Bhutan Power System Operator, and Electricity Regulatory Authority of Bhutan attended the workshop.

Growing domestic demand hurts power export

Kuensel | Thukten Zangpo | February 5, 2024

… power generation falls 2 percent in 2023

The country’s hydropower generation last year saw a decline of 2 percent compared to the previous year.

In terms of sales, export sales saw a decline of 26.7 percent mainly because of the increase in the domestic demand for domestic electricity sales, recording an increase of 98 percent last year.

The overall generation was recorded at 10, 534.81 million units (MU) of electricity last year, a decrease of 218.09 MU from 10, 749.63MU in 2022, according to the figures from the Druk Green Power Corporation (DGPC).

The electricity sales for both export and domestic also saw a decline from Nu 25.37 billion last year from Nu 27.07 billion in 2022.

The plants under DGPC—Tala, Kurichhu, Chhukha, and Basochhu generated 6,945.61MU, and the Mangdechhu hydropower plant (MHP) and Dagachhu projects added 3,145.05MU and 444.15MU respectively.

DGPC’s Managing Director, Dasho Chhewang Rinzin said that despite the shutdown of the Tala hydropower plant for repair and maintenance from January to March 2022, the generation from DGPC’s plants last year decreased by 275.58 MU mainly because of poor hydrology.

For the MHP, he added that generation saw an increase by 60.09 MU last year compared to the previous year although there was a major outage with Unit III, which resulted in less generation in 2022. “Otherwise, hydrology in 2022 was better than 2023.”

At the same time, generation from Dagachhu projects saw a decrease of 2.6 MU compared to 2022.

Considering that the export tariffs are higher than the domestic generation tariffs, there is an overall decreasing trend in revenues accrued to DGPC and the power plants.

In figures, the export sales in 2022 reported at Nu 22.6 billion saw a decrease to Nu 16.64 billion. However, the domestic sales increased to Nu 8.73 billion in 2023 from Nu 4.41 billion last year.

DGPC’s power plants saw export earnings worth Nu 5.38 billion and Nu 6.2 billion from domestic sales.

MHP’s export revenue was Nu 10.03 billion domestic sales were Nu 2.53 billion, Dagachhu’s export revenue was Nu 1.22 billion and domestic sales at Nu 11.76 million.

For the 2023-2024 lean season, the projected demand is 1,517 MU and the projected landed tariff for this season is expected to be in the range of Nu 4.12 per kilowatt-hour (kWh) to Nu 6.48 per kWh.

In December last year, Bhutan purchased 254.82 gigawatt hours of electricity. It is expected that electricity imports will increase in the fiscal year 2023-24 because of the increasing trend of domestic demand compared to the past.

From October 11 to November 16 last year, Basochhu exported 40.27 MU of electricity worth Nu 230.94 million after the deduction of fees, charges, and trading margin at the tariff rate of Nu 5.73 per kWh.

Moving forward

Bhutan’s energy demand could grow by over 400 percent by 2030 if the country’s energy demand peaks, the Department of Hydropower Systems forecasts.

To meet the growing domestic demand and to ensure Bhutan’s energy security, the power sector is considering prioritising reservoir and pumped storage projects in future, a move away from the current run-of-rivers projects, according to the DGPC.

There is also an emphasis on diversifying investments into other renewables, especially solar in the short term. “Solar hydro hybrids are a viable solution for energy security with the falling costs of solar,” it added.

The Department of Energy targets to generate 500 megawatts of electricity from the share of renewable energy in the next five years.

On January 18 this year, one of the units of the Nikachhu hydropower plants was connected to the national grid of two units with 59 megawatts each. The project is expected to generate a revenue of Nu 1.6 billion annually.

At the same time, the start of Punatsangchhu-II plant by the end of this year could contribute to Bhutan’s economy.

Hydropower, a key contributor to growth, was estimated to experience a temporary decline of negative 0.1 percent in 2023 before rebounding to 8.9 percent in 2024, driven by the commissioning of Punatsangchhu-II and Nikachhu hydro-projects, according to the Royal Monetary Authority.

Several small hydropower projects, which are presently under construction, are expected to be commissioned between 2024 and 2025.

According to the DGPC, the generation pattern is mainly dependent on the hydrology and forecasts are that, at least in the foreseeable future, there will not be many changes in the inflow patterns.

However, with climate change, it is projected that in the long term, the winters may be drier while the monsoons will be more intense and shorter.

2023 sees lowest ever hydropower generation and revenue

The Bhutanese | February 3, 2024

Nu 3 bn lesser than in 2022 but Nikachu and PII to improve generation in 2024

In what is bad news for the government treasury, poor hydrology has ensured that 2023 has seen the lowest ever power and revenue generation since 2019.

In 2023 a total of Nu 25.115 bn in power was generated compared to Nu 28 bn in 2022, 28.22 bn in 2021 and Nu 30 bn in 2020.

In 2023 the highest revenue was generated by the 720 MW Mangdechu at Nu 12.560 bn due to its higher tariff, followed by the 1020 MW Tala project at 5.962 bn, 336 MW Chukha at 4.582 bn, 126 MW Dagachu at 1.219 bn, 64 mw Basochu at 600.76 mn, 60 MW Kurichu at 532.30 mn, and finally mini hydro projects and solar at Nu 26.31 mn.

However, not everything produced is revenue as loan repayments have to be made of around 5 bn plus and then there are Operation and Maintenance costs which means the final actual revenue is around Nu 17.3 bn.

The domestic consumption of power is going up and 2023 is the highest ever.

For the first time, the power generated by Tala, Chukha, Basochu and Kurichu has seen higher internal consumption at 53% with only 47% being exported. This also makes sense as the tariff for these projects are lower.

The higher tariff Mangdechu saw 77.45% of its power being exported while 22.55% was consumed internally. This is also the highest ever domestic consumption for this project.

The hydropower generation figures should improve with the commissioning of the 118 MW Nikachu project and the 1020 MW Punatsangchu II project.

In Nikachu the main Contract Package of Civil and Hydro-Mechanical Works was awarded to Hindustan Construction Company on April 20, 2016. Commissioning is in progress and commissioning of one of the Units (Unit 2) was declared on January 25, 2024. There were delays encountered due to poor geology in the head race tunnel section and also due to Covid pandemic. The energy sale started from 00.00 hrs. of January 25, 2024.

The cost of the project so far is Nu 15.68 bn and it was financed through DGPC’s own funds and loans from the ADB and loan from an Indian bank.

Nikachu is expected to generate Nu 1.505 bn in revenue in a year which after loan deduction would be Nu 527.64 mn.

The Nikachu tariff is starting at Nu 3.30 per unit and will reach Nu 6.10 by 2040.

The electro mechanical equipment is from Voith Hydro, India and so it is a semi-automated plant.

The 1020 MW P II project’s official date to start commissioning its units are October 2024 but the project is aiming to commission its first two units of 340 MW by July or August 2024 and then one unit per month with full commission by December 2024.

P II is trying to hurry the works to take advantage of power generation in monsoon. It has 6 units of 170 MW each.

The P II management said that overall only 4 percent of the works is left with the dam complete, HRT tunnel complete and only 8% of civil works left in the powerhouse and 14% in the electromechanical equipment works.

The project cost Nu 94.45 bn.

Meanwhile drilling of rock samples are going on at the P I right bank area. In the first phase 7 samples will be drilled of 200 meters length with 6 samples in the second phase and some more if required in the third phase.

Then geologists and experts of both countries will study these rock samples to see of the dam can be built at the current location or not.

Basochhu earns over Nu 230M in two months

Kuensel | Dechen Dolkar | February 3, 2024

… country imports power worth Nu 2.53 billion

Bhutan earned Nu 230.94 million exporting surplus power from Basochhu plant for two months. 

The Basochhu hydropower plant began exporting its surplus power to the Indian Energy Exchange (IEX) from October 13, last year until November end.  

The Bashochhu plant successfully exported 40.27 million units (MU) of surplus energy.

The highest rate earned from the sale of Basochhu power in the Indian Power Exchange at Nu 10 per unit. The overall sale was made at the landed tariff of Nu. 5.73 per kWh.

The export will continue until May this year. However, from December 2023 to April 2024, there will be no export from Basochhu as Bhutan will have a deficit and will be importing from the IEX during this period.

The exchange operates similarly to a stock market for electricity, with both buyers and sellers.

The Market Clearing Price (MCP) is determined for the day ahead in 15-minute blocks based on prices bid into the market. As a result, tariffs could defer for every 15-minute block based on real-time supply and demand situations in the energy market. There is a market-clearing price cap of INR 10 a unit.

The country started importing energy from India in December. During the lean season, the country imported 591.96 MU of energy from IEX at a total cost of Nu 2.53 billion from December 1, 2023 to January 31, 2024.

According to the officials from Druk Green Power Corporation, there will be an increase in imports during the 2023-2024 period due to the increasing trend of domestic demand compared to the past.

The official said that for the 2023-2024 lean season, the projected demand is 1,517MU and the projected landed tariff for this season is expected to be in the range of Nu 4.12/kWh to Nu 6.48/kWh.

The total purchase for December 2023 was 254.82GWh.

Australia Awards Scholarships commencing in 2025

For prospective applicants (non-civil servants) under the purview of the Ministry of Education and Skills Development

Applications are now open

DGPC is pleased to inform all interested and eligible Bhutanese under the purview of MoESD (non-civil servants) that online application for Australia Awards Scholarships, for study commencing in 2025 is open from 1 February 2024 and will close on 30 April 2024. These scholarships are offered for pursuing both masters level program by coursework as well advance diploma level programs in Australia.

For more information on eligibility criteria, fields of study on offer, document requirements, navigating the online application processes, and registering for free virtual scholarships information sessions, visit  If you have any queries, please email or call the Australia Awards – Bhutan office at (02) 331845 during office hours (Monday to Friday).

PTC India Limited commences power supply from Nikachhu Hydroelectric Project, Bhutan to Assam

The Economic Times, India | Bikash Singh | January 25, 2024

Synopsis: Bilateral energy trade between India and its neighbors is a key building block of the integrated regional energy market. India and Bhutan have excellent relations and India has for decades assisted Bhutan in developing its hydropower. This mutually beneficial relationship is now being further strengthened.

PTC India Limited, provider of power trading solutions in India announced commencement of power supply from Nikachhu Hydroelectric Project, Bhutan to Assam under Long Term PPA.

PTC executed the PPA with Bhutan and PSA with Distribution Company of Assam (APDCL) in 2014.

Dr. Rajib K. Mishra, CMD PTC mentioned that considering the long term perspective of uninterrupted, reliable vis-à-vis cheaper power supply to cater the rapidly growing demand in the state, Assam Power Distribution Co. Ltd. (APDCL) executed this PPA. This 118 MW (2×59 MW) hydro project has provision to supply power during peak hours also which will be very helpful to meet peaking hours demand of the State. Bilateral energy trade between India and its neighbors is a key building block of the integrated regional energy market. India and Bhutan have excellent relations and India has for decades assisted Bhutan in developing its hydropower. This mutually beneficial relationship is now being further strengthened.

Nikachhu first generating unit synchronised to the national electricity grid

Kuensel | January 19, 2024

In one of the final milestones, the first generating unit of Nikachhu Hydropower Project was synchronised to the national electricity grid on yesterday. The testing and commissioning of both the generating units of 59MW each are expected to be completed within the next two weeks.

Sunkosh project could double in size from 2,560 MW to under 5,000 MW

The Bhutanese | Tenzing Lamsang | January 6, 2024

One of the important features of the Gelephu Mindfulness City project as revealed in the Master Plan vision design of Bjarke Engels and team is the Sunkosh Dam.

The vision design said the final bridge, a hydroelectric dam, will be constructed on the city’s western border with a step-well retaining wall that offers viewpoints, staircases for meditative walks, and a temple. Visitors and pilgrims can ascend and descend along countless individual routes to the visitor center and temple nested on the face of the manmade cliff.

It said the Sunkosh Temple-Dam embodies in architectural form all the foundational elements of Gelephu: the harmonious coexistence of culture and nature, conceived as a hybrid child of Bhutan’s rich past heritage and its prosperous future legacy.

Given that the vision said a dam is coming up the Druk Green Power Corporation (DGPC) has been doing some technical studies and the true potential of the reservoir dam is under 5,000 MW at 4,600 to 4,800 MW.

This is much more than the 2,560 MW project that had earlier been envisioned for the project.

The idea is instead of just doing a 2,560 MW project why not take advantage of the real reservoir potential of the project and build a bigger dam and project in one location.

Given that this is a reservoir project if it is built then it can solve Bhutan’s power woes in winter when generation in the run of the river projects all fall sharply to the point that Bhutan has to import power.

The dam height could be higher than the 220 meters long Hoover dam in USA and the backflow generated from the water would be for around 70 kms all the way to the Wakletar bridge between Wangdue and Tsirang.

However, there will be no displacement of people as there are no settlements, schools or hospitals there.

It would be a multi use project beyond just power generation as it can be used for supplying water and also recreation.

These are early days for the project and it is not yet clear how it will be funded or implemented.

Sunkosh was one of the projects in the 10,000 MW by 2020 but it could not take off after issues of implementation modality and financing issues.

For many years strong attempts were made to get the project done under this model but there was no success and it lay ignored until the Gelephu Mindfulness City project.

During the 116th National Day Address His Majesty The King said that considering our current expertise, we need to enhance the installed capacity of hydropower by expediting the construction of projects such as Kholongchu, Chamkharchu, Dorjilung, Nyera Amari, Wangchu, Bunakha and Sunkosh, for which Detailed Project Reports are ready.

His Majesty said Bhutan’s electricity prices should be among the most competitive in the region so that our hydro resources are not just a source of revenue, but also an enabler of other investments.

DGPC to pursue multiple hydro projects following National Day Address

The Bhutanese | Tenzing Lamsang | December 23, 2023

His Majesty The King outlined that one of the three priority areas to support the Gelephu project will be the energy sector including solar, wind, geo thermal and hydropower.

Following this, the Druk Green Power Corporation (DGPC) will be updating the DPRs of many of the many hydro projects and then look at raising funds and implementing them.


The one that can be done the fastest among them is the 600 MW Kholongchu project as it has already built Nu 4.626 billion (bn) worth of initial infrastructure like roads, power facilities, and residential and non-residential structures needed for the project.

The former MoEA Minister Loknath Sharma had announced that the project would start construction by mid 2023 after securing funding from Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC) which are both Public Sector Undertakings of India and fund power projects. However, funds have not yet been secured.

The Managing Director of the DGPC Dasho Chhewang Rinzin said the senior management team of PFC and REC are in Bhutan and detailed discussions are going on with them. He said the Government of India (GoI) is fully supportive in availing money.

Dasho said that the funding should be secured in the next two to three months.

The total project cost is Nu 60 bn of which Nu 4.626 bn is already spent leaving around 56 bn to be raised. The funding of the project will have to be 70 percent debt and 30 percent equity. The loan that will be taken from the PFC and REC will be around 40 bn and DGPC will have to raise around Nu 16 to Nu 17 bn as equity.

This equity will be raised from DGPC’s cash flow, NPPF and local banks.

The deal has not reached closure on financing yet and the most important thing for DGPC will be coming up with equity financing. The PFC and REC will also want securities or collateral which will be the project assets itself. The deal has not yet reached the stage to discuss the loan interest rates.

The interest rates will depend in part on repayment capacity and on that the DGPC has a good track record with the GoI in bilateral projects.

Once the financing is clinched then the MD said the project can go on in full swing and it can be completed in five years by around 2028.

The project started as a joint venture with with Satluj Jal Vidyut Nigam (SJVN) Limited but due to management, financing and implementation differences DGPC regained full ownership by repurchasing SJVN’s shares in early 2023.


The other next big project is the 1,125 MW Dorjilung project. Here the DGPC MD said they are in the process of updating the DPR which should be done by around March or April 2024.

Once the DPR is done then they will get into discussions on financing and the deadline is to secure all the funding by the end of 2024, after which the project will take around 5 to 6 years to complete.

The government earlier this year had written a formal letter to the World Bank asking them to look for the funding of Dorjilung project through consortium financing.

The WB is already in talks with the European Investment Bank (EIB) and could bring in the Asian Development Bank too.

The last estimated cost of the project was put at Nu 74 bn, but the latest estimate could be USD 1.2 to USD 1.3 billion.

The project was initially proposed as a trilateral project between Bhutan, Bangladesh and India with Bhutan building the project with Bangladesh financing and exporting the power to them via India, but while Bhutan and Bangladesh agreed there was no response from India.

Bunakha, Wangchu and Chamkarchu

An interesting project is the 180 MW Bunakha reservoir project which would be able to store water for winter and also help the downstream projects of 336 MW Chukha, 1,020 MW Tala and 570 or 900 MW Wangchu.

The DPR has already been done but is being updated. The project will have a 180-meter-long dam.

The project was supposed to cost Nu 29 bn in around 2014 but the revised DPR will show a much higher cost now given inflation.

This project was initially listed as a JV to be done with SJVN under the 10,000 MW by 2020 but again funding and other differences led to separate ways.

Back in 2014 because of Bunakha, Chukha would gain an additional Nu 575 mn in revenue a year, Tala would gain Nu 972 mn a year and Wangchu would gain Nu 420 mn (at 2014 Chukha tariff rates).

A related and interesting project is the Wangchu project which will be down stream of Tala. Here the DGPC has two options.

One option is doing it as a run of the river project which is a 570 MW project at around nu 40 bn back in 2014.

However, the other option is to do it as a reservoir project that will store water for the winter months and this would be a 900 MW project.

The DGPC MD said they are now exploring this reservoir option given the changes in the energy market in India and they are also studying the costs and opportunities.

A project for which the DGPC has done the DPR is the 442 MW Nyera-Amari project. The project is on the Nyera Amari river that flow down from Merak-Sakteng,  into Bangtar, Pemathang and Martshala. 

The first stage of the project will be near Trashigang and the second stage in Martshala in Samdrupjongkhar.

The project cost is Nu 34.78 bn back in 2014.

The DGPC will also update the DPR of the 770 MW Chamkarchu project and see how it can be taken forward.

Chamkarchu and Wangchu were both listed as JV projects under 10,000 MW by 2020 but could not happen due to differences on the JV model between companies.

The DGPC MD said that the above projects are based in the Power System Masterplan where they are ranked higher and are the better projects and so their DPR was done and they can be taken up earlier.


The biggest of all the projects is the 2,560 MW Sunkosh project. However, since the Sunkosh project comes under the larger Gelephu Mindfulness City, project there are not yet details on how the project will be taken up.

The project is estimated to cost well north of Nu 200 bn and will be a major reservoir project with tremendous potential to not only generate power, but ensure storage and generation in the winter months.

The project was in discussion in the past between Bhutan and India but got stuck due to implementation modalities and funding challenges.

So far, a press release talking about the aesthetics of the dam says the final bridge, will be hydroelectric dam, constructed on the city’s western border with a step-well retaining wall that offers viewpoints, staircases for meditative walks, and a temple. Visitors and pilgrims can ascend and descend along countless individual routes to the visitor center and temple nested on the face of the manmade cliff.

It says the Sunkosh Temple-Dam embodies in architectural form all the foundational elements of Gelephu: the harmonious coexistence of culture and nature, conceived as a hybrid child of Bhutan’s rich past heritage and its prosperous future legacy.

P II, P I, Nikachu, Solar and Wind

The DGPC MD said they will have to get going and the next one year will be taken up updating the DPR of the projects to factor in higher costs and any changes in the environment like changes in the river or river flow.

Earlier, in the 10,000 MW by 2020 GoI funding backed many of these projects but they did not happen and so a major challenge for Bhutan will be on how it secures billions in funding for these mega projects.

When comes to solar the DGPC MD said that the plan is to have 1,000 MW in solar power by 2030 by building small plants of 20 to 50 MW across the country. He said it cannot be done in a large way in one place.

On wind energy, some windfarms are possible but not at a large scale as many valleys in Bhutan do not have consistent wind.

DGPC is also doing at the possibility of doing geothermal energy in the longer term and here it will have to look at hot springs and other areas to do an assessment and see the options.

The DGPC MD said that the 118 MW Nikachu project will be done by the end of December or in January 2024. He said the project is funded by loans from the ADB and State Bank of India.

The Punatsangchu II project is making progress and is on track to be completed by mid 2024.

When it comes to the Punatsangchu I project the DGPC MD said that additional investigations are being carried out on the right bank and based on that the data will be studied by the experts.

Signing of the Project Preparedness Financing Agreement

The Project Preparedness Financing Agreement was signed between the Ministry of Finance, ADB and DGPC on December 18, 2023, for a concessional loan of USD 5 million to update the DPRs for the 404 MW Nyera Amari I&II and 180 MW Bunakha projects. DPGC will immediately initiate the updates of the DPRs. This will pave the way to ADB financing for these two important projects.