Higher output and domestic sales bolster the power sector, but rising electricity imports and flat export earnings highlight the complexities of Bhutan’s energy balance.
Bhutan’s hydropower generation rose by 9.9 percent in the first eight months of 2026, while the value of domestic electricity sales increased by 25.9 percent, signaling stronger production and higher domestic sales even as export earnings remained virtually unchanged and electricity imports more than doubled.
Data from the Royal Monetary Authority’s October monthly bulletin show that Bhutan generated 10,645.7 million units of electricity between January and August, up from 9,690.5 million units during the same period last year.
The increase was driven largely by stronger generation during the summer months, when hydropower output typically rises with greater water availability. Generation reached 2,603.7 million units in July and 2,681.6 million units in August, compared with 2,253.8 million and 2,403.7 million units, respectively, in 2025.
Output also rose sharply in April, reaching 855.9 million units compared with 602.5 million units a year earlier. However, generation was lower in February and June than in the corresponding months of 2025, indicating that the improvement was not uniform throughout the period.
The figures underline the importance of seasonal generation patterns to Bhutan’s electricity sector, where output, domestic demand and export availability can vary significantly across the year.
Domestic electricity sales gain momentum
The value of domestic electricity sales rose to Nu 12.25 billion in January-August 2026, from Nu 9.73 billion in the same period last year.
The increase was particularly pronounced in May and June. Domestic sales reached Nu 2.10 billion in May and Nu 2.35 billion in June, compared with Nu 1.74 billion and Nu 945.6 million, respectively, in 2025.
However, sales fell to Nu 779.4 million in July, from Nu 1.14 billion a year earlier, before recovering to Nu 2.03 billion in August.
The increase in the cumulative value of domestic sales is significant because it indicates that the domestic market accounted for a larger value of electricity sales during the period. However, the figures do not establish whether the increase resulted from higher consumption, changes in tariffs, the composition of electricity sales or other factors.
Distinguishing between these factors is important in assessing whether the growth reflects greater domestic electricity use, higher realised prices or a combination of both.
Export earnings remain flat despite higher generation
Despite stronger electricity production, the value of electricity exports remained almost unchanged. Export sales totalled Nu 17.20 billion in the first eight months of 2026, marginally below the Nu 17.21 billion recorded in the same period last year.
The cumulative figures mask considerable monthly variations. Export sales in May and June this year stood at Nu 514.3 million and Nu 1.05 billion, respectively, well below the corresponding figures of Nu 2.01 billion and Nu 3.91 billion in 2025.
Exports subsequently surged to Nu 8.08 billion in July, compared with Nu 5.13 billion in July last year. August exports also increased, reaching Nu 7.17 billion against Nu 5.47 billion in the same month of 2025.
The contrasting monthly patterns suggest that the timing of electricity exports differed substantially between the two years. The figures alone, however, do not explain the reasons for the shifts.
The near-identical cumulative export values, despite higher generation, also highlight why electricity production cannot be assessed in isolation from domestic sales, imports and the timing of exports.
Electricity imports more than double
One of the most notable developments was the sharp increase in electricity imports despite higher domestic generation.
Imported electricity rose from 752.1 million units in January-August 2025 to 1,788.2 million units during the same period this year. The corresponding import bill increased from Nu 2.59 billion to Nu 5.80 billion.
Imports were highest in February, at 550.2 million units, followed by January at 521.3 million units. In the corresponding months last year, imports stood at 244.1 million and 194 million units, respectively.
The increase raises questions about the timing of domestic generation, electricity demand and the availability of power during different seasons. Higher annual generation does not necessarily eliminate the need for imports if domestic demand rises or generation is insufficient at particular times.
The figures do not establish the precise reasons for the increase, but they demonstrate the importance of examining Bhutan’s electricity balance across the year rather than relying solely on total generation.
Imports of solar electricity also increased, reaching 41.2 million units in the first eight months of 2026, compared with 29.5 million units a year earlier. Their recorded cost rose from Nu 121.9 million to Nu 182 million. Solar imports were recorded from January to April in both years, with none reported from May through August.
Taken together, the figures present a mixed picture of Bhutan’s power sector: hydropower generation and domestic electricity sales increased, export earnings remained flat, and electricity imports rose substantially.
For a country whose economy and export earnings depend heavily on hydropower, the key question is not simply how much electricity is generated, but how effectively production is matched with domestic demand and export opportunities throughout the year.
Sherab Dorji, Thimphu
