Hydropower revenue drops

May 22 | Kuensel
By Tshering Palden

With the Wangchhu recording the lowest flow due to the worst hydrology since 2008, the Druk Green Power Corporation (DGPC) saw the lowest generation of electricity last year.

DGPC was short of 13.18 percent of the target generation in 2018.

Chukha, Kurichhu, Basochhu, and Tala hydropower plants together generated 6,574 million units against the forecast of 7,440MU last year. Dagachhu hydropower plant, a subsidiary company of the DGPC, also recorded the lowest generation since its commissioning in 2015.

The net export of electricity to India dropped from 5,068MU in 2017 to 4,054MU last year. Domestic energy consumption increased from 2,137MU in 2017 to 2,454MU in 2018. As a result of poor hydrology and increased domestic consumption, import of electricity rose by 92MU from 208MU in the previous year to 300MU in 2018.

“With the lowest generation and increased domestic consumption, the impact on the finances were evident,” DGPC director Dorji Pavo Phuntshok said.

DGPC earned Nu 11.68 billion against Nu 12.27 billion in 2017.

Hydropower is one of the top contributors to the country’s gross domestic product besides tourism. The hydropower sector generates 85 percent of DHI’s annual revenue.

Dorji Pavo Phuntshok said that this phenomenon has not yet become a pattern and that there is no substantial change in hydrology over the life of Chukha hydropower plant. DGPC recorded the highest generation of electricity two years ago at 7,573MU and another low generation in 2012 with 6,811MU.

“As of today, we’re far ahead of last year’s generation so what we’ve seen is year to year change and not really a pattern,” he said. “We’ve not seen any scientific results that quantify what would be the impact on Bhutan’s hydrology.”

He said with the melting glaciers, the country had more water to generate power in the short term.

DGPC is planning to build reservoir schemes like Sunkosh and Kuri-Gongri hydropower plants to mitigate the impacts of climate change.

Druk Holding and Investments’ (DHI) chairperson, Dasho Ugen Chewang, said that diversification of the economy was required to minimise impacts from such events in the long term.

Estimate by the DHI showed that the dividends from other sectors were unable to make up 50 percent of DHI’s total dividends by 2030. “The simulations and calculations showed it was not possible the reason being there are inhibitions,” he said.

Dasho Ugen Chewang said that companies like the Construction Development Corporation Ltd. and Druk Green Power Corporation Ltd. should look beyond business as usual and take up projects in construction of hydropower plants abroad. “We are not limiting ourselves only to the revenue the rains or clouds give us, we have to look beyond,” he said.

That is the diversification, and economic transformation that DHI is seeking.

DHI chief executive officer Dasho Karma Yezer Raydi said that the fluctuations in hydrology would be a regular affair and it only symbolises the country’s vulnerability.

“While we’re a vulnerable country, we must also act like one,” he said. “On the revenue front, there are all these limitations, but the spending is done as if the country has huge sack of money.”

He said that the talk of becoming a self-reliant country has continued for long, yet the country had become more dependent.

However, he said that Bhutan might not have much options beyond hydropower. “Even when we talk of economic diversification, we are talking about industries that depend on hydropower,” he said.

DGPC maintained high levels of power plant availability and water utilisation factors in the operation and maintenance of its generating power plants.

While lower generation affected the overall revenue, DGPC declared a dividend of Nu 4.5 billion in addition to the royalty to the government.


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