Hydropower revenue increases in 2020 as compared to 2019

The revenue earned from domestic sale to the BPC amounted to Nu 3,153.73mn in 2020

Despite the Covid-19 pandemic, there has been a substantial increase in revenue from hydropower projects during 2020 as compared to 2019.

The increase can be attributed to the additional generation of electricity during 2020 (better hydrological flows) and slightly lower domestic consumption.

In 2020, the Druk Green Power Corporation (DGPC) saw an increase in generation by over 10% to 7,630 MU as compared to 6,926 MU in 2019. This has been possible because of the better hydrology inflows in the rivers and timely maintenance of the power plants.

According to the DGPC, in general, there was no direct impact on the sale of energy and the Operation & Maintenance of the power plants due to the pandemic, although some difficulties were experienced in the arrangement of essential spare parts from across the border.

From the export of electricity to India, Bhutan earned (Excluding Royalty Energy) Nu 22,482.89mn in 2020, while the upward sharing of Nu 179mn for Dagachhu is not included. 

The revenue earned from domestic sale to the BPC amounted to Nu 3,153.73mn in 2020.

However, the DGPC was able to manage much of the supply of spares through the continuous support of DHI and the government for cross border arrangements, and where the spares could not be arranged, DGPC was able to get them fabricated/manufactured at its subsidiary company, Bhutan Hydropower Services Ltd at Jigmeling.

The generation from the Dagachhu, its subsidiary power plant, was also higher in 2020 at 518 MU as compared to only 400 MU in 2019. This was mainly on account of good hydrology during 2020 with some early and late rains.

The generation of the Mangdechhu project (which is not under the DGPC) also increased to 3,218 MU in 2020 with all the generating units available for generation as compared to 1,320 MU in 2019 when the units were available for generation in a staggered manner as each unit started to be commissioned from June 2019.

And if the two lockdowns had any impact on the export of hydropower, according to the DGPC, the export of electricity to India was not affected as hydropower generation was not affected by the COVID pandemic and the demand from India remained steady.

Although the pandemic might not have an impact on the hydropower projects, there were few major issues such as materials supply chain disruptions including the difficulties faced in bringing the required spare parts for machineries and equipment from India and abroad.

According to the DGPC, with the exodus of manpower, the projects under construction (Punatsangchhu I & II and Nikachhu) are faced with a shortage of workers that is affecting the pace of construction at the various work fronts (especially with the major packages of civil construction works, and installation of hydro-mechanical and electro-mechanical equipment).

Delays in delivery of equipment and availability of construction materials coupled by cross border quarantine requirements for transportation and some additional costs associated with quarantine requirements and mobilization of Bhutanese workers to supplement the exodus of expatriate workers, the delays, which could lead to cost and time overruns for the projects, were issues faced in the hydropower project sector.

Bhutan exports electricity to India through the PTC India from the DGPC power plants and the Mangdechhu project. Dagachhu power is exported to India through the Tata Power Trading Corporation Ltd (TPTCL).

According to the DGPC, besides providing steady revenue flows, the hydropower sector ensured that there was no disruption to the power generation, distribution of the essential service of electricity supply to domestic consumers, and the export of surplus power to India despite the Covid-19 situation.

Chencho Dema from Thimphu