Bhutan’s hydropower sector earned more from domestic electricity sales in the first five months of 2026, but a sharp decline in export revenue highlights the growing seasonal pressure on the country’s most important export sector.
According to the Royal Monetary Authority’s July Monthly Statistical Bulletin, domestic electricity sales generated Nu 7.09 billion between January and May 2026, up from Nu 6.39 billion during the same period in 2025. However, electricity export earnings fell significantly during the same period, dropping to Nu 909 million from nearly Nu 2.69 billion a year earlier.
The contrasting figures reflect a familiar challenge in Bhutan’s hydropower economy: while electricity remains the country’s largest export commodity, generation is highly dependent on seasonal river flows. During the dry winter and early spring months, reduced water levels limit production, forcing Bhutan to prioritise domestic consumption and import electricity to meet demand.
Total electricity generation during the first five months of 2026 stood at approximately 3,677 million units, compared to 4,215 million units during the same period in 2025—a decline of nearly 13 percent.
The lower generation affected the volume of surplus electricity available for export, resulting in weaker export earnings despite the sector continuing to generate strong domestic revenue.
There was also a substantial rise in electricity imports during the early months of 2026. Between January and April, more than 1.76 billion units of electricity at a cost of around Nu 5.72 billion was imported, which was more than double the import volume of the same period in 2025, when Bhutan imported approximately 752 million units costing Nu 2.59 billion.
Electricity imports reduced sharply in May. Imports fell to 26.4 million units, costing around Nu 72.1 million.
Solar electricity imports also formed a small part of the country’s energy mix during the first four months of 2026, with monthly imports costing between Nu 34.8 million and Nu 52.3 million. No solar electricity imports were recorded in May.
The monthly trend shows the extent of seasonal fluctuations affecting the hydropower sector.
In January 2026, electricity generation reached 500.8 million units, almost similar to the 498.6 million units recorded in January 2025. Domestic electricity revenue increased slightly to Nu 1.20 billion, but export earnings declined sharply to Nu 42.3 million, compared to Nu 114.3 million the previous year. Generation dipped further in February, reaching 387.1 million units, compared to 396.7 million units in February 2025. While domestic revenue remained above Nu 927 million, export earnings nearly halved to Nu 52 million, as electricity imports increased significantly.
A stronger generation performance was recorded in March, with production rising to 561 million units, compared to 485.7 million units in March 2025. However, export earnings continued to remain lower at Nu 106.7 million, compared to Nu 190.1 million a year earlier, while imports exceeded 418 million units. The sector saw a notable recovery in April, when electricity generation increased to 855.9 million units, compared to 602.5 million units in April 2025. Domestic sales also increased to around Nu 1.69 billion, reflecting stronger consumption.
However, export earnings remained subdued at Nu 193.4 million, compared to Nu 281.5 million during the same month last year. By May 2026, hydropower generation had strengthened considerably, reaching 1.37 billion units. Domestic electricity sales recorded the highest monthly revenue during the period at more than Nu 2.09 billion.
Despite improved generation, export earnings stood at only Nu 514.3 million, significantly lower than the Nu 2.01 billion recorded in May 2025. Among Bhutan’s major hydropower projects, the Mangdechhu Hydroelectric Project remained the largest contributor to generation during the period, followed by the Tala Hydroelectric Project and Punatsangchhu-II Hydroelectric Project.
Generation from the Nikachhu Hydropower Plant also increased during 2026, while the Dagachhu Hydropower Plant recorded no generation during the first four months before resuming production in May.
The latest figures underline both the strength and vulnerability of Bhutan’s hydropower-dependent economy. On one hand, rising domestic electricity revenue reflects growing demand and the sector’s ability to generate substantial domestic value. On the other, declining exports during low-generation months highlight Bhutan’s continued exposure to seasonal variations.
Sherab Dorji, Thimphu
