The Bhutanese Leading the way.
Bhutan is set to boost its winter power generation capacity by approximately 233 megawatts (MW) this year, thanks to the commissioning of several new hydropower projects and the addition of a solar project.
Last winter, the country produced around 450 MW of firm power from its existing plants—Tala, Mangdechhu, Chhukha, Dagachhu, Nikachhu, Kurichhu, and Basochhu. With the new projects coming online, total winter generation is expected to reach approximately 683 MW, depending on hydrological conditions.
The 1,020 MW Punatsangchhu-II project is expected to be fully operational by August and will contribute about 199 MW of firm power, according to Druk Green Power Corporation (DGPC). Additionally, the 54 MW Burangchhu and 32 MW Yungichhu projects, scheduled for completion by December, will together generate 22.34 MW of firm power.
Meanwhile, the Sephu solar project is already generating 17.38 MW in its first phase and will add another 5 MW by September, bringing its winter daytime firm generation to 22.38 MW. The 18 MW Suchhu project, which is already online, is expected to contribute 4 MW of firm winter power.
In total, these projects will add about 233 MW of firm power to the national grid this winter.
However, any celebration may be premature, as the anticipated sharp spike in demand this winter is likely to offset the additional 233 MW in new generation.
Last year the peak demand for power in winter reached a maximum of 1,026.44 MW on 25th December 2024 compared to the average generation of around 450 MW which meant a peak or highest shortfall of 576.44 MW.
To ensure that it is safe the Department of Energy last year requested the GoI for permission to import up to a maximum of 1,100 MW which means this is maximum power we can get, but it also does not mean that we have to import all of it.
This year even with close to 700 MW of firm power supply, the hunger and need for imported power is only expected to go up.
The power demand will go up as major industrial and other projects that consume a lot of power are expected to come online by winter pushing up the need for power and this imported power.
This means the peak load will be well above 1,026.44 MW this winter and the need for imported power will go up even higher despite the increase in winter power production.
The problem also is that the tariff rates for power imported from India in winter is well above domestic tariff rates.
The above shows the constraint on Bhutan’s power hungry industries and businesses in winter.
This is why Bhutan is in a rush to build an array of small and medium hydro projects, which can be built in a short time and at the same time also solar projects in various locations ongoing or being planned.
During the winter months, Bhutan strategically avoids purchasing electricity from India’s expensive day-ahead market during peak hours—typically between 5 p.m. and 9 p.m.—when power prices are at their highest. Moreover, India discourages power exports during this peak window, further limiting Bhutan’s options.
To navigate this challenge, Bhutan’s hydropower dams store water during the day and release it in the evening to maximize generation during the critical four-hour peak period. This strategy helps reduce reliance on costly imports and supports domestic supply.
An official noted that, despite such measures aimed at maintaining price stability and ensuring affordable, predictable power for industries, concerns persist over winter supply and cost volatility.
In response, the government is also exploring long-term power purchase agreements to secure cheaper and more stable rates.
However, such contracts come with higher fixed costs, requiring careful financial consideration.
