The Bhutanese Leading the way.
The sixth and final unit of the 1020 MW Punatsangchu II project is aimed to be commissioned on 27th August, which means that the project will be producing all of the 1020 MW.
As the project is slated for commissioning in a few days, there is the important matter of the tariff rate and the Power Purchase Agreement.
A reliable source told this paper that the tariff is likely to be something just above Nu 5 per unit, and it may be announced around the commissioning of the project or soon after.
The levelized tariff which is the average of the increase in tariff over the next 40 years is also likely to be announced, and it is also slated to be under Nu 6 per unit but above Nu 5 per unit.
The source said that there is a common consensus between Bhutan and India on the tariff rate and the levelized tariff, and it is now a matter of completing some processes and formalities in India, and the tariff will be announced by both sides soon.
Once the tariff is announced, the automatic next step will be to sign the Power Purchase Agreement which will allow Bhutan to start exporting P II power to India. Currently, all P II power is being used within Bhutan.
Given that the P II project is expected to generate 4,357 million units in a year, the revenue is expected to be around Nu 22 billion a year.
After the sixth unit is commissioned on 27th August, there will be a P II Project Authority meeting which will endorse the total project cost, authorize any balance payments, discuss the handover to an operation and maintenance team.
P II from the date of commissioning will have two years to enjoy full revenue, after which the loan repayments start to kick in.
The P II’s fifth unit was down for a week recently due some ring problem creating some vibration and the part had to be brought in and the unit is back up.
The P II and P I authority members are largely the same except for two members, and so the meeting of the members may also allow for some discussions on P I.
On P I, a positive movement was on the Joint Technical Team of both countries agreeing on rectification measures of the right bank at a 26 degree angle as proposed by Bhutan. The Technical Coordination Committee of both countries has to endorse the minutes of the meeting of the joint technical committee after which the matter can be put to the authority.
