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    Hydropower revenue drops by 32%

    June 5, 2023 - Tshering Pelden


      Hydro power revenue for the first quarter of 2023 saw a significant decline by almost 32% compared to the same period last year, with total revenue from power generation, including both domestic and export sales, amounting to Nu 2.08 billion (bn) this year.

      This is a decrease of Nu 1.01 bn from the revenue generated in the first quarter of 2022, which was Nu 3.09 bn.

      While critics and observers say that this is due to reduced export, there are other factors, too, such as increasing demand for hydro power within the country and the reduction in domestic tariff.

      Bhutan had been generating more revenue through power exports than domestic sales in the past two years, 2021 and 2022. However, in 2023, the trend shifted, with more power being consumed domestically than exported.

      Speaking about it, Dasho Chewang Rinzin, Managing Director (MD) of Druk Green Power Corporation (DGPC) highlighted that there has been a drastic increase in domestic demand this year, resulting in more power being used for domestic sales.

      Additionally, the domestic tariff is lower than the export tariff, which further impacts revenue.

      Domestic tariff for the Chukha Hydropower (CHP), Kurichhu Hydropower (KHP), Tala Hydropower (THP), and Basochhu Hydropower (BHP) is Nu 1.34 per unit, while the domestic tariff for Mangdechhu Hydropower (MHP) is Nu 3.64 per unit.

      The domestic tariffs were revised and decreased in September 2022 from Nu 1.42 to Nu 1.34 per unit for CHP, KHP, THP, and BHP, and from Nu 3.77 to Nu 3.64 per unit for MHP.

      'The revision in the price of domestic sales has also contributed to the overall hydropower revenue,' said Dasho Chewang Rinzin, adding that in 2022, the domestic sales were 874.19 MU for the months of January to April, compared to domestic sales of 1,253.51 MU in 2023 (Jan-Apr).

      As a result, the country generated Nu 1.6 bn from domestic sales, an increase of Nu 681.5 mn from the first quarter of 2022. Furthermore, Dasho mentioned that hydrology was much better in 2022 compared to 2023, and despite the shutdown of THP from January to March 16, 2022, it generated almost the same amount of energy in the first quarter of 2022. Talking about both export and import during the first quarter of 2023, Dasho said, 'As per the long-term Power Purchase Agreement, any surplus power after domestic consumption will be exported to India.

      The settlements on energy accounting are done on a monthly cycle.'

      He also added that, however, during the periods of January to March 2022 and January to April 2023, Bhutan imported power from the Indian Energy Exchange (IEX) to meet the deficit during the lean months.

      Purchases were made on a day-ahead basis from IEX during these periods.

      Bhutan can also export any surplus power with one and a half hours of advance scheduling on the day of operation.

      All the energy accounting during these periods is executed on a day-to-day basis compared to monthly settlement during non-import periods.

      'As per the long-term Power Purchase Agreement, the entire power from the Dagachhu hydropower project is exported to India through Tata Power Company Limited (TPTCL).

      Thus, all power generated from Dagachhu is considered for export,' Dasho Chewang said.

      He also added that there were days when Bhutan had excess of generation compared to domestic load, which were exported to India through daily scheduling.

      'Bhutan does not have large storage where we can save the surplus power beyond domestic use for longer hours,' he added.

      Meanwhile, in the first quarter of 2023, major hydropower plants in Bhutan, including CHP, DHPCL, THP, and MHP, collectively generated a total of Nu 395 mn from power exports in January, February, March, and April.

      Among these plants, DHPCL and MHP contributed the most to export sales, amounting to Nu 394.17 mn.

      CHP and THP generated sales worth Nu 0.84 mn.

      Meanwhile, the export tariff for CHP is Nu 2.55 per unit, KHP, and THP Nu 2.23, and Nu 4.12 for MHP.

      The export tariff for MHP has been revised from Nu 2.23 to Nu 4.12 starting from September 2022. Furthermore, while the generation in the first quarter remained almost the same in 2022 and 2023, there was an increase in the domestic load over the same period.

      In 2022, import was required only from January to midMarch, whereas in 2023, import continued until the end of April.

      Meanwhile, the Royal Monetary Authority's (RMA) monthly statistics report reveals that from January to April 2023, the country generated a total of Nu 395 mn through export sales of 65.33 million units (MU).


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