The Bhutanese Leading the way.
The 2023-24 annual budget is the tightest one till date with very little revenue room and this is setting to get worse as the hydropower revenue generation data so far from January to September 2023 shows that we are having our lowest power generation in the last four years.
From January to September 2023 the total generation by all plants in the country is worth Nu 20.656 bn which is lower than for the same time period of 2022 January to September at Nu 22.355 bn.
In 2021 January to September to revenue was Nu 21.940 bn while in 2020 it was Nu 24.685 bn.
It must be remembered that all the above are just revenue before the deduction of hydropower loans and the costs of running the plants.
The DGPC said the generation till September 2023 has been below the projection due to a very dry winter and a slow start of the monsoons. Except Kurichu, all the projects are behind projection energy up to September 2023. There has been some rain in recent time and if it continues for some weeks the generation might catch up with some deficit else it is not expected that the actual generation will be anywhere near the projection for the year.
With the 2023 generation not expected to meet the projection figures it will not only hit government revenue but also the reserves.
The trend in the generation are mainly dependent on the hydrology. Sometimes, it could depend on the availability of generating units also as in the case of 2022 when the Tala power plant had to be taken for shutdown from January to mid-March 2022 for inspection and rectification underground head race tunnel.
The DGPC said that domestic demand had been increasing and therefore there is an increasing trend in domestic revenues from sale of electricity to BPC.
However, there is equivalent lower export in electricity as quantum of generation remains almost the same although dependent on hydrology. Considering that export tariffs are higher than domestic generation tariffs, there is an overall decreasing trend in revenues accruing to DGPC and the power plants.
In 2020 the export revenue from January to September was Nu 22.238 bn while the domestic revenue was Nu 2.446 bn. In 2021 export from January to September was Nu 19.293 bn while domestic consumption was Nu 2.647 bn. In 2022 export from January to September was Nu 18. 519 bn while domestic consumption was Nu 3.835 bn.
In 2022 export from January to September was Nu 18. 519 bn while domestic consumption was Nu 3.835 bn.
In 2023 export from January to September was Nu 14. 489 bn bn while domestic consumption was Nu 6.167 bn.
In the longer term the DGPC said the generation pattern will mainly be dependent on the hydrology and the forecasts are that, at least in the foreseeable future, there will not be much 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.
It said to meet the growing domestic demand and to ensure Bhutan’s energy security, the power sector is considering to prioritise reservoir and pumped storage projects in future, a move away from the current run-of-the-rivers projects. Emphasis is also being made for 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.
The hydro revenue outlook as expected to improve in the coming years as DGPC said that the 118 MW Nikachu project is expected to be commissioned by the end of 2023. The 1,020 MW Punatsangchu-II project is expected to come online by the later part of 2024. A number of small hydropower projects, which are presently under construction, should get commissioned between 2024 and 2025. Investments are also being made in solar generation. With growing domestic demand, there is a need to plan and invest in more solar and hydropower projects.
