The Rural Electrification Project for clean energy, better living and sustainable growth in Bhutan was registered as a Clean Development Mechanism (CDM) project on 21 October 2014.
According to the press release issued by the Department of Renewable Energy (DRE), Ministry of Economic Affairs (MoEA) in collaboration with the Bhutan Power Corporation (BPC), the DRE has been working with the Mitsubishi UFJ Morgan Stanley Securities Co., Ltd (MUMSS) of Japan and Bhutan Power Corporation Limited since 2007 for CDM registration process of Bhutan Rural Electrification Programme.
Further, the press release states that a new methodology (electrification of rural communities by grid extension) had to be designed and approved for the project due to the unavailability of a suitable methodology.
Under the project, rural communities will have the access to distributed electricity for cooking, lighting and other purposes. The electricity supply will replace the consumption of fossil fuels such as kerosene, diesel, LPG or candles. “The baseline scenario is the Green House Gas (GHG) emissions from the use of fossil fuels in rural communities not connected to the grid to meet annual electricity demand of approximately 24,644MWh,” states the press release.
The press release reads, “After the project implementation approximately 24,644 MWh per year of renewable electricity will be distributed to 29,338 rural households in Bhutan. Therefore, the project implementation will lead to 0 tonne of CO2 emission and will result in the substitution of fossil fuels for electricity generation and CO2 emission reductions of approximately 18,883 tonnes of CO2 per year during the first crediting period”.
DRE Environment Officer, Tandin Wangmo, said that kerosene, candle and diesel generator are not a clean source of energy and cause pollution. She said the Rural Electrification Project will help to reduce CO2 emission in the atmosphere. “The main advantage of this project is, we will be gaining carbon credit, and if we sell carbon credit in the market, we will be generating some revenue,” she added.
The developed industrial countries are mandated to reduce carbon pollution, but if they cannot, then they buy the carbon credit from a non polluting country.
Tandin Wangmo said that 29,338 rural households is not proper figure as it was taken from rural electrification market, but the actual figures go as high as 80,000 rural households to be electrified. She said about 97 percent of the target to electrify households has been achieved.
“The project is expected to generate revenue up to 56,000Euros in a year depending on the market, assuming that 1 tonne of carbon credit will fetch around 2-3Euros,” she said.Bhutan is recognized by the United Nation Framework Convention on Climate Change (UNFCC) as a Least Developed Country and the estimated emissions reduction of the project activity are 18,883 tonnes of CO2 emission per year during the first crediting period, which is less than 20 ktCO2 emmission per year. The project is considered additional if the geographic location of the project activity is in one of the project activity is in one of the LCDs or the small island countries.