Bhutan’s revenue from power exports declined by Nu 46.69 million in November 2024 compared to the same month in 2023, according to the central bank’s monthly bulletin released in January 2025. The decline is primarily attributed to increased domestic electricity consumption during the winter months, which reduces the surplus power available for export. This seasonal trend has become more pronounced in recent years as Bhutan’s energy demands continue to grow.
Between January and November 2023, Bhutan earned Nu 17.28 billion from power exports. However, during the same period in 2024, export earnings slightly dropped to Nu 17.15 billion. This decline reflects the country’s shifting energy dynamics, where rising domestic consumption, particularly during the colder months, impacts overall export volumes.
Export revenue fluctuated throughout the year, influenced by hydropower generation capacity, seasonal water availability, and domestic electricity needs. The highest export earnings were recorded in August 2024, reaching Nu 4 billion, a peak driven by increased river flows from monsoon rains, which boost hydropower production. Conversely, the lowest export revenue was recorded in April 2024, amounting to just Nu 18.88 million, likely due to reduced water levels in Bhutan’s river systems before the onset of monsoon rains.
The Mangdechhu Hydroelectric Project Authority (MHPA) continued to be the leading contributor to Bhutan’s power exports, generating Nu 2.4 billion in September 2024. This strong performance highlights MHPA’s significant role in Bhutan’s hydropower sector, benefiting from peak monsoon season water flows that enhance electricity generation capacity. Following MHPA, the Chhukha Hydropower Plant (CHP) was the second-largest exporter, earning Nu 806.45 million in the same month.
While Bhutan’s power export revenue experienced a decline, domestic electricity consumption surged, reflecting growing local demand. From January to November 2024, domestic power sales reached Nu 8.09 billion, marking a substantial increase from Nu 6.47 billion during the same period in 2023. This sharp rise—an increase of over 25%—highlights shifting energy consumption patterns within the country, likely driven by factors such as industrial growth, urban expansion, and increased household energy usage.
Bhutan’s total power generation from major hydropower projects stood at 7,866 million units by October 2024, a notable decline from 9,564 million units recorded during the same period in 2023. However, by the year’s end, total production rebounded significantly, reaching 9,503.38 million units, reflecting a 33.5% increase over the previous year. This trend underscores the seasonal variability of hydropower production and Bhutan’s ability to recover from early-year deficits.
The monthly production data reveals significant fluctuations due to Bhutan’s hydropower dependence on river flow and seasonal weather conditions:
- Peak Production in July 2024: Bhutan’s hydropower generation reached its highest point in July at 1,847.93 million units, aligning with the monsoon season, which brings abundant rainfall and increased water flow in rivers. This period consistently contributes the highest power output, ensuring surplus electricity for exports.
- Winter Lows in January 2024: The lowest production was recorded in January, with just 309.37 million units—a common seasonal trend caused by reduced water levels in Bhutan’s rivers due to lower precipitation and freezing temperatures in high-altitude areas.
- Gradual Recovery Through the Year: Despite the sluggish start in winter, production showed an upward trend as water availability improved. Monthly outputs increased steadily, with February, March, and April producing 264 million, 345 million, and 524 million units, respectively. By the peak monsoon season, generation levels surged again, compensating for earlier shortfalls.
Several key factors contributed to the fluctuations and overall recovery in hydropower production:
- Seasonal Hydrology: The availability of water directly impacts power generation, with monsoon-driven summer months ensuring peak production, while dry winter months result in lower output.
- Climate Variability: Changes in precipitation patterns, including delayed monsoons or lower-than-expected rainfall, could have influenced year-on-year variations in generation.
- Operational and Infrastructure Efficiency: Bhutan’s ability to increase production despite early-year challenges suggests improvements in hydropower plant operations, maintenance efficiency, or optimized water management.
- New Generation Capacity or Grid Management: The overall increase in annual power generation might indicate the effective utilization of existing plants or the commissioning of additional capacity in 2024.
As Bhutan’s domestic electricity consumption rises—particularly during the winter months—the challenge lies in balancing internal energy security with export commitments. The fluctuations in production highlight the need for:
- Strategic Water Resource Management: Ensuring efficient reservoir storage and water flow management to maintain stable power generation year-round.
- Diversified Energy Sources: Exploring solar and wind energy to supplement hydropower, particularly during dry seasons.
- Infrastructure Enhancements: Upgrading transmission and storage facilities to maximize energy availability for both domestic use and exports.
While Bhutan experienced a temporary dip in power production in early 2024, the strong recovery in later months reflects resilience in the country’s hydropower sector. The year’s performance underscores the importance of adapting to seasonal variations and optimizing energy production strategies to ensure long-term sustainability and economic benefits.
An official from Druk Green Power Corporation (DGPC) explained that Bhutan’s electricity exports and domestic consumption follow a complex seasonal pattern. “Higher domestic consumption in winter has reduced export revenue, but the increase in local sales indicates growing demand within Bhutan,” the official said.
The official also noted that peak electricity production occurs in summer due to higher water flow. “Despite export challenges, the overall rise in power generation and domestic sales reflects a positive trend for the hydropower industry,” the official added. Looking ahead, Bhutan must balance domestic needs with maximizing export potential to ensure sustainable growth in both sectors. The rise in domestic electricity consumption reflects Bhutan’s economic and infrastructural progress but also presents challenges for maintaining hydropower export revenues. A balanced approach—focusing on capacity expansion, demand management, and energy diversification—will be crucial to ensuring that Bhutan continues to benefit from its hydropower resources while sustaining economic growth.
Sherab Dorji from Thimphu