Bhutan’s hydropower sector has delivered a strong start to 2026, recording a sharp rise in electricity generation and domestic revenue during the first five months of the year. While electricity export earnings declined as more power was retained to meet growing domestic demand, the latest figures point to the increasing importance of the country’s internal electricity market and the resilience of its hydropower industry.
The Royal Monetary Authority’s (RMA) records of July show that Bhutan generated 3,677.4 million units of electricity between January and May 2026, an increase of 393.8 million units, or nearly 12 percent, from 3,283.6 million units generated during the same period last year. The increase was driven by stronger production from several of the country’s largest hydropower stations, including the Mangdechhu Hydropower Plant (MHP), Punatsangchhu-II Hydropower Project (PHPA-II), Tala Hydropower Plant (THP) and Chhukha Hydropower Plant (CHP).
The higher electricity generation translated into stronger domestic revenue. Income from domestic electricity sales reached Nu. 7.09 billion in the first five months of 2026, compared to Nu. 6.39 billion during the corresponding period in 2025. This is an increase of approximately Nu. 702 million, or about 11 percent.
The figures underscore Bhutan’s growing domestic electricity consumption, reflecting expanding economic activity, increasing electrification and rising demand from households, businesses and industries.
However, while domestic earnings climbed, electricity export revenue fell sharply. Between January and May this year, Bhutan earned Nu. 908.7 million from electricity exports, significantly lower than the Nu. 2.69 billion earned during the same period in 2025. Export earnings declined by nearly Nu. 1.78 billion, representing a drop of around 66 percent.
The decline was largely attributed to reduced electricity exports during the winter and early summer months, when domestic demand remained high and a greater share of electricity generated was diverted to meet local consumption instead of being exported.
Monthly data reveal that electricity generation outperformed last year’s levels in four of the first five months.
In January, Bhutan generated 500.8 million units, marginally higher than the 498.6 million units produced in January 2025. Output dipped slightly in February to 387.1 million units, compared with 396.7 million units a year earlier.
Generation rebounded strongly in March, increasing to 561 million units from 485.7 million units in 2025. The momentum accelerated in April, when production surged to 855.9 million units, up from 602.5 million units during the same month last year.
May recorded the strongest performance of the year, with electricity generation reaching 1,372.6 million units, surpassing the 1,231.7 million units produced in May 2025.
Domestic electricity sales also recorded steady growth throughout the review period.
Revenue remained largely stable at around Nu. 1.20 billion in January before climbing in the following months. By April, domestic electricity sales had increased to Nu. 1.69 billion, up from Nu. 1.42 billion during the same month in 2025.
In May alone, domestic electricity revenue reached Nu. 2.10 billion, compared with Nu. 1.74 billion a year earlier, reflecting stronger domestic consumption and higher electricity availability.
The increase in domestic revenue helped cushion the impact of lower export earnings and highlights the growing role of Bhutan’s domestic electricity market as the country continues to electrify its economy.
Hydropower remains one of Bhutan’s most important economic pillars, contributing significantly to government revenue, export earnings and energy security while supplying clean and affordable electricity across the country.
Despite the increase in electricity generation, Bhutan continued to rely on imports during the lean winter months.
The country imported 1,788.2 million units of electricity between January and May 2026 at a cost of approximately Nu. 5.80 billion, compared with 1,104.1 million units costing around Nu. 3.30 billion during the same period last year.
Electricity imports are typically required during winter when reduced river flows limit hydropower generation and domestic demand exceeds available supply.
The report also records small quantities of imported solar power during the first four months of 2026, although no solar imports were reported in May.
Among Bhutan’s major generating stations, Tala Hydropower Plant, Mangdechhu Hydropower Plant and Punatsangchhu-II Hydropower Project remained the largest contributors to electricity production during the review period.
The latest figures reflect the continued strength of Bhutan’s hydropower sector, with rising electricity generation and growing domestic revenue offsetting seasonal fluctuations in export earnings.
With additional hydropower projects expected to come on stream in the coming years, alongside rising domestic demand driven by industrial growth, electric mobility and expanding electrification initiatives, the sector is poised to play an even greater role in powering Bhutan’s economy while balancing the needs of domestic consumers and export markets.
Sherab Dorji, Thimphu
