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Bhutan

Energy Sector Overview

The Kingdom of Bhutan — with 46,500 square kilometers area, is situated between China and India. It is located in the Eastern Himalayas entirely within one of the world's ten global biodiversity 'hot spots'. Bhutan’s population was estimated to be 920,000 in 2007, with 79% of the population living in rural areas. Bhutan has a population growth rate of 3.1% what is one of the highest in the world. The urban centre of Thimphu (the capital), the southern border (with India) towns of Phuentsholing (economically important city) and Samdrup Jongkhar are the key cities which have the highest population density. The rest of the population lives in the towns that are the headquarters of the Dzongkhag (district) administrations like Paro, Haa, Wangdue Phodrang, Gelephu, etc. The rest are in the remote isolated hamlets/villages, some of which contain as few as 4-5 households. Key indicators of Bhutan’s economy for FY 2007 are mentioned below:-

GNI (US$ Billions)	12
GNI per capita	1,770
GDP (US$ Billions)	0.26
Total export Electricity-US$ Millions-(2006)	77
Population	920,000
Density	19.6 per sq km
Language	English, Dzongkha (official)
Currency	Ngultrum (NU 1= Rs. 1)
Rating	Low-income country

Bhutan's per capita energy consumption is relatively high compared to other neighboring countries because its forest resources provide an abundant and readily available source of energy.  Fuel wood accounts for more than 75 percent of total energy consumption and virtually, all non-commercial energy consumption in rural areas. The household sector consumes 95 percent of the fuel wood, the Government and commercial entities use 3 percent, and agriculture and industry use about 1 percent each. Per capita consumption of fuel wood is estimated at 1.22 tons, which is one of the highest in the world and is used mainly for cooking and heating. Since Bhutan has no known reserves of fossil energy resources such as oil and natural gas, all petroleum products such as kerosene, diesel oil, petrol, and liquefied propane gas are imported for lighting, transportation, cooking and heating. The main commercial sources of energy are hydroelectricity, thermal electricity, and fossil fuels like gasoline, diesel, kerosene etc. The chart below gives the detail of energy mix of Bhutan for FY 2007.

Energy mix of Bhutan for FY 2007

A. Coal

Coal is being produced in eastern Bhutan, although the amount remains very less. Mining of coal is being done by Penden Drukpa Coal Mines, a joint venture of the Government and a local private company, at Bangtar, Chenangri and Deothang in the other south eastern part of Bhutan. Most of it is being exported to India. Local limestone processing units in South-western Bhutan also consume a little amount of indigenous coal. The table below highlights the quantity of coal produced in Bhutan over the years.
Quantity of coal produced in Bhutan

Year	Unit (Metric Ton)
1995	71,112
1996	68,000
1997	70,000
1998	69,000
1999	68,000
2000	67,000
2001	65,000
2002	65,000
2003	66,324
2004	29,631
2005	85,279
2006	82,000 (Estimated)
2007	80,000 (Estimated)

 Source: http://minerals.usgs.gov

B. Oil and Gas

The consumption of oil is predominantly for transportation fuel and all of it is imported from India. The total number of vehicles in Bhutan (2008) was around 38,276. This number has increasing rapidly, which can be judged from the fact that in 1998 total number of vehicles in Bhutan was around 8000. During the FY 1999-2000, the following amounts of fuels were imported to meet domestic demand.
                                                                     Summary of fuel import    

In the Oil and Gas sectors the following private companies are partnered with Indian Oil Distribution companies and supply the domestic requirements of fuel for transportation and other needs.
1. Bhutan Oil Distributors
2. Druk Petroleum

C. Electricity

The Bhutan’s electrification process started in 1966 with installation of 25 kW diesel generator set in Phuentsholing (border town). Bhutan's first hydropower plant was commissioned in 1967 in Thimphu with an installed capacity of 360kW (the plant is still in operation). Consequently in 1968, Samtse, Sibsoo and Phuentsholing were provided with electricity imported from the West Bengal State Electricity Board of India. Samdrup Jongkhar, Sarpang and Gelephu were later electrified in the years 1969 to 1973 with electricity imported from the Assam State Electricity Board of India.

It was recognized that the Hydro power potential of Bhutan is of enormous size. The swift flow of water from the densely covered forest catchments provides abundant renewable hydropower. Therefore, in later years high priority was placed on the development of Hydro sector. During FY 1972-1976, several mini hydroelectric plants were constructed through grant assistance from the Government of India at Trashigang, Wangduephodrang, Gidakom and Mongar. The construction of the Chukha Hydroelectric plant started in 1978, which was built with assistance from the Government of India. In 1988, it was fully commissioned generating 336 MW. This was a major milestone in the sustainable development of the hydroelectric sector for economic development. This led to an increase in the availability of power in the western regions of Bhutan as well as increased the government’s gross revenue from the sale of surplus power to India. As a result Bhutan's industry sector grew from cottage to establishment of large industry and has greatly contributed to the GNP. During the period FY 1986-1987, ten micro hydroelectric plants, ranging in size from 20 kW to 70 kW, were commissioned with Japanese assistance. During 1987 to 1988, two mini hydroelectric plants at Khaling (0.4 MW) and Chumey (1 MW) were commissioned with assistance from the Government of India. During 1991 to 1993, three micro hydroelectric plants of 200 kW each were commissioned in Tsirang, Dagana and Zhemgang with Japanese grant assistance.

 The Bhutan power system master plan study (1990-93) identified and listed 91 potential sites for development of large hydropower stations above 10MW. It is theoretically estimated that Bhutan has about 30,000 MW of hydropower potential. The latest update shows a technically and economically feasible site of about 16,000 MW. The development of hydropower over the years had accelerated the growth of GNP, with 25% of the national revenue earnings in the Seventh Five Year Plan (7FYP).

The country’s installed generation capacity at the end of the 8th Five Year Plan (2002) stands at 1487 MW. Of this, majority of power comes from four large hydroelectric projects of Chukha, Kurichhu, Lower Basochhu and Tala. The rest is made up of the 15 mini/micro hydroelectric dams and diesel-generator sets installed all over the country. Hydro-electricity accounts for 97% of total electricity generation, and thermal generation from diesel generator sets is 3%.

Bhutan’s peak demand in 2001 was 90 MW and 532 million kilowatt hours (KWh) was consumed. This contrasts with a demand of 70 MW and consumption of 338 million KWh in 1995. The rate of energy consumption has been growing at 9.53% per annum for last five years. It is estimated that 12 MW of generation capacity has to be added per annum during the 9th FYP in order to meet the domestic demand.

Although Bhutan has substantial sources of clean and renewable indigenous hydropower energy, the distribution of electricity throughout the country is still very limited. Approximately 80 percent of the population does not have access to electricity. However, with growing socio-economic development, electricity is assuming the leading role in the pattern of energy consumption. More than 80% of the hydroelectricity generated is exported to the Indian. Further, with the intent to bolster socio-economic development in the rural areas and promote equitable and regionally balanced development, the Department of Energy has set a goal of electrifying all rural households by 2020. In order to achieve this target, the rural electrification target has been trebled from just over 6,000 households during the 8th Five Year Plan to 15,000 households in the 9th Five Year Plan. Bhutan looks to hydro-power development as the main engine for socio-economic development in the 21st century. The feasibility study for the Punatsangchhu project has been completed by the Electric Power Development Corporation, Japan. The Project proposals from the Royal Government of Bhutan have been forwarded to the Government of India which is presently looking at investing in this project and the Mangdechhu Project.

Major 400 KV and 220 KV transmission lines and sub/transmission & distribution lines are being erected for evacuation of the generated energy to the Indian grid and supply of rural electricity. The provision of clean, adequate, safe and reliable universal access to clean sources of energy for the 70% of the population without access to electricity yet means that the rural electrification program is a major priority for the energy-sector. During the 9th Five year plan (9th FYP) many transmission/distribution grid extensions are planned along with the construction of 3 mini/micro hydels at Sengor (50kW) and Merak Sakteng (200kW) in eastern Bhutan and Tang (400kW) in central Bhutan. The provision of free/subsidized solar-electrification sets to the isolated households, monasteries and institutions will also be pursued through the Alternate Energy Programme of the Department of Power. A quick snapshot of Bhutan’s power sector and hydro projects in pipe line is given below.

Power sector of Bhutan at a glance

 

Hydropower projects in pipeline for development in the next 20 years

Institutional Overview

The Electricity Act, 2001, was introduced to deal with the restructuring of power sector. As a result in 2002, the Government restructured the Department of Power of the Ministry of Trade and Industry into:-

• Department of Energy (DOE): as the Government’s policy and planning agency; and
• Bhutan Power Corporation (BPC): as the utility service company responsible for transmission, distribution, and supply of electricity within the country.

DOE under the renamed Ministry of Economic Affairs continues to be the nodal agency for all planning and coordination activities for the energy sector. Bhutan has four major power stations:

• Chhukha Hydro Power Corporation (336 MW), has been in existence since 1986
• Basochhu Hydro Power Corporation (64 MW), set up in 2001
• Tala Hydroelectric Project Authority (1,020 MW) started operations in 2006, and
• Kurichhu Hydro Power Corporation (60 MW), set up in 2001

Three are located in the western region; the Kurichhu power plant supplies the central and eastern regions. The Tala power plant, established as a joint venture with the Government of India, will be fully owned by the Government of Bhutan in 2009. The other three companies are wholly Government-owned and were amalgamated to form Druk Green Power Corporation (DGPC) in January 2008. To optimize resources and maximize efficiency, the Government established DGPC as a holding company to oversee its interests in hydropower companies and projects, and to accelerate new hydropower development.

Under the Electricity Act, Bhutan Electricity Authority (BEA) was set up as the sector regulator in 2002, and since then it has been regularly revising the tariff structure. In 2007, BEA approved a multiyear tariff revision for 3 years from 1 July 2007 to 30 June 2010. BEA issued separate tariff structures for low-voltage, medium-voltage, and high-voltage consumers, in accordance with the Tariff Determination Regulations, 2006.

The Department of Trade is responsible for the export and import of other energy-related goods/materials like petroleum, coal and natural gas. Private sector participation in the energy-sector has been minimal in terms of IPPs etc. The participation of private firms in power/energy-related activities has been limited to procurement of materials and transportation for the Department of Power which actually implements the projects in conjunction with Indian/foreign firms like Larsen & Toubro, Bharat Heavy Electricals etc.  During the 8th Five Year Plan the participation of local firms in civil construction works of the power plant at Basochhu Upper-stage Project was a first. The government is going to encourage the participation of local private firms in the construction of transmission lines, rural electrification projects and building of substations etc. This is in view of the limited implementing capacity of the Department of Energy, which is severely stretched in terms of manpower and skills; and also in keeping with the trebling of the goals to be achieved.

A. Department of Energy

The Department of Energy (DOE) within the Ministry of Trade & Industry has been formed during the restructuring process of the erstwhile Department of Power in July 2002. DOE is responsible for the formulation of energy and power sector policy, plans, programs and guidelines/regulations, feasibility studies related to hydro power development, Detailed Project Reports (DPRs) for sustainable development of hydro power projects. DOE also performs the function of RGoB/donor/lender fund coordination related to energy/power sector projects. DOE also has the mandate to issue techno-economic clearances and technical sanctions for all capital works in the energy/power sector. DOE currently has four Divisions with nearly 200 employees. DOE is headed by a Director General.

In line with the vision and mission statements, the DoE identified a set of specific and measurable performance targets. These had varying time frame and therefore they were classified into two; as long-term objectives having longer time frame (2012 and beyond up to 2020) and as short-term objectives which were targeted to be achieved within the 9th Plan. These are listed below:
       Long-Term Objectives

• Ensure Electricity for all
• Increase generation capacity to a minimum of 5000MW by 2020
• Enable development of National Transmission Grid
• Establish effective Management Information System
• Promote alternate and cost effective energy generation from Renewable sources through adaptive research and development
• Completion of standards and codes
• Enable development of Hydropower through Independent Power Producers and Joint Venture
• Develop Minimum Energy Performance Standards and Energy Appliances Labeling Program
• Establishment of National Load Dispatch Center and System Operator
• Conduct Energy Audit for power-intensive industries
• Introduce reforms in the Energy sector to make the sector vibrant, efficient and cost effective.

       Short-Term Objectives

• Establish Bhutan Electricity Authority as autonomous organization
• Enable establishment of Druk Hydro-Power Corporation
• Enable rural electrification of 15000 households in 20 Dzongkhags
• Formulate Framework for Renewable Energy Policy
• Prepare Rural Electrification Master-Plan for 20 Dzongkhags.
• Prepare Integrated Energy Management Master Plan
• Prepare 3 Detailed Project Reports for Hydro-Power development
• Provide 1500 Solar Systems and 500 Water Heating Systems
• Enable Providing Grid Electricity Supply to Trongsa, Gasa, Bumthang, Tsirang and Dagana
• Finalize draft regulations, standard and codes for electricity sector
• Develop communication out-reach programs for electricity regulations
• Establish 30 Hydro-meteorological stations and set up real-time hydro-meteorological data transmission facilities in 20 Dzongkhags
• Conduct educational and awareness programs for energy efficiency and conservation
• Develop appropriate technology for increasing wood-fuel efficiency
• Develop policy for private sector participation in Hydro Power Development
• Introduction of Community based electricity supply system

Core Activities
In line with the proposed vision, mission and objectives, DoE is carrying out the following core activities:

1. Formulate plans and prepare projects and programs documents for development of large, small, mini and micro hydro-power projects
2. Formulate plans and prepare project and program documents for development of other renewable energy resources
3. Formulate Projects and mobilize resources for rural electrification and non-economically viable projects
4. Develop standards and codes for generation, transmission and distribution of electricity
5. Conduct feasibility and field investigation survey for development of energy resources
6. Conduct studies for adoption of fuel cell and other bio-fuel technologies
7. Conduct Energy Modeling and Demand forecasting
8. Coordination, expansion and up gradation of power systems including system analysis.
9. Provide technical sanctions and techno-economic clearances for projects
10. Collect, compile, analyze and disseminate quality Hydro-meteorological and sediment data and information
11. Conduct climate study, modeling and weather forecasting
12. Provide flood warning information
13. Licensing of electricity service providers
14. Monitor and Evaluate Projects and Programs
15. Create awareness and encourage use of Energy Efficient Appliances

B. Bhutan Electricity Authority

The Bhutan Electricity Authority (BEA) is an autonomous agency constituted under the Electricity Act of Bhutan 2001, to regulate the electricity supply industry. The Authority consists of five part-time Members appointed by the Minister with its Secretariat Office in Thimphu. The Electricity Act of Bhutan 2001 that was enacted by the National Assembly during its 79th session. The functions of the BEA are to regulate the electricity supply industry, which includes the following:

1. To set technical, safety and performance standards for the electricity sector;
2. To develop electricity tariff regulations and approve tariffs;
3. To issue licenses;
4. Monitor and compliance to licensees;
5. Settle disputes that may arise between any two licensees or between a customer and licensee;
6. Determine royalties, fines, penalties, to be paid by licensees;

BEA was established to regulate the electricity supply industry which includes the generation, transmission, distribution, supply and sales of electricity. The BEA will regulate the hydropower generation licensees, Transmission and Distribution licensees and the System operator. It will also regulate any other participants in the electricity sector in the future. So far, if consumers had problems with BPC, they had no agency to turn to for solving their problems. Now, if consumers are not satisfied with the way BPC handles their problems, consumers can appeal to the consumer forum that has been set up to handle consumer grievances.

In the next few years, the BEA will be developing performance standards to ensure that the quality of electricity supplied constantly improves. The BEA will also make projections of how the electricity tariffs will change in the short to medium term and this will help investors to decide whether they would like to set up power based industries in Bhutan.

i. Tariff Revision Notification

The Bhutan Electricity Authority, Royal Government of Bhutan has approved a three year tariff revision for the period beginning July 1, 2007 to June 30, 2010. The first phase tariff revision is effective from July 1, 2007. All Customers are kindly requested to take note of the tariff revision.

The existing minimum energy charges of Nu.30 per month for single phase and Nu. 90 per month for three phase customers will be discontinued and billing will be based on actual consumption. Also there will not be any charges towards meter rent.

Tariff applicable from July 01, 2008 onwards

The second and third phases of the revision of electricity tariff rates will be effective from July 1, 2008 and July 1, 2009 respectively, for which separate notification will be issued. 

C. Bhutan Power Corporation (BPC)

BPC was incorporated as a commercial entity in FY 2002 but with extensive social mandates of the government especially in the rural electrification component of its many activities. Its business is also highly regulated as the sole agency for transmitting and distributing electricity in Bhutan. BPC in its fourth year of corporatization achieved the turnaround and became profitable. BPC has also implemented a number of innovative initiatives which has enabled BPC to become a role model in corporate governance in the country. During the FY 2006, BPC was also able to start most of its major projects of grid extension and complete many of its rural electrification projects. BPC has seven departments the detail and function of each one has been outlined below.

i. Distribution & Customer Services Department

The Distribution & Customer Services Department (DCSD) is responsible for providing adequate, reliable, good quality, safe and affordable electricity in a customer friendly and efficient manner. The DCSD is made up of the following 21 divisions:

• 19 Electricity Services Divisions (ESD) in all dzongkhags except Gasa (Gasa fed from ESD, Punakha)
• Central Maintenance & Training Division (CMTD)
• Urban Electrification Division (UED) and Head Office cells.

The Department operates and maintains all electrical infrastructures at 33 kV level and below. This consists of 2,440 km of MV lines, 2,860 km of LV lines, 1,598 distribution substations, 20 mini-micro-hydels and 32 DG sets. There are 642 personnel in the DCSD covering a total of 67,418 customers. Besides O&M of the electrical infrastructures, the Divisions of the Department are also responsible for all customer services from services release, meter reading, billing, to handling of customer inquiries and complaints.

DCSD also implements improvement and up-gradation projects in urban areas. One such project is the improvement and up gradation works of Phuentsholing city, which is scheduled for completion by June 2007. Similarly, the power supply arrangement to various parts of Thimphu city is constantly upgraded to meet the fast growing load demand. The Energy Purchases & Sales at the distribution level has gradually increased over the past years and the gap between the purchases and sales has reduced over the years, indicating reduction in the distribution losses. The distribution losses calculated from the energy purchases and sales is 4.4% for the year 2006 and it was 5.45% in 2005. The customer base of BPC has reached 67,418 in December 2006, from a base of about 50,000 in 2004.

ii. Transmission Department

Transmission Department is mandated to ensure reliable availability of transmission network for evacuation of electricity to domestic and export markets from various generating stations. The Department also functions as System Coordinator presently and will be the System Operator on establishment of National Load Dispatch Centre. Transmission Department’s direct contribution to revenue of BPC is through the wheeling of energy from the generating companies for export to India amounting to over Nu.234 million on an average over the past three years. In addition, the indirect revenue generation stems from sale of energy to the Distribution & Customer Services Department of BPC, which in turn supplies the same to Customers within Bhutan. The achievement of the Department are a true reflection of the committed and dedicated efforts of its staff to excel in performance in meeting the mandate, with Revenue Loss Impact Factor (RLIF) almost maintained at unity over the years.

Key performance index for BPC

Parameters	2004	2005	2006
SAIFI	20.57	5.2797	4.417
SAIDI	7.65	5.9384	2.885
RLIF	99.66	99.88	99.99

Current activities

• Dismantling & construction of new Substation at Olakha
• Establishment of National Load Despatch Centre (NLDC).
• Gearing up for taking over responsibility as System Operator.
• Construction of staff quarters Tintibi, Deo thang, Dechhencholing and Gedu substations.
• Planning and Scheduling up gradation of Sin­ghigaon and Semtokha Substations

Future plans

• Upgrading existing substations based on ra­tionalized planning.
• Setting up testing laboratory for protection re­lays, meters and gear.
• Implementation of LIVE maintenance of the transmission lines.

iii. Development & Construction Department

The main function of the Development & Construction Department (DCD) is to undertake and implement planned major transmission system projects covering transmission lines and associated substations. Once the need and feasibility of the transmission project is established, DCD comes into play and undertakes the projects right from preparation of technical specifications and tender documents till the project is commissioned. Typical activities that are carried out by DCD for any project cover the following:

• Preparation of tender documents including technical specifications
• Tendering process and finalization of contract award
• Contractor’s Design and drawing approvals and clearance
• Construction Supervision and Quality Assurance
• Project Scheduling and monitoring
• Supervision of Commissioning and taking over

Currently, DCD is involved in the following works.

• Establishment of Power supply arrangement for Pasakha Industrial Estate, covering 3 x 63 MVA, 220/66KV Malbase substation, 66KV quadruple circuit from Malbase to Pasakha, 66KV terminal gantry and 66KV underground distribution at Pasakha
• Extension of power supply to Tsirang and Dagana covering 220KV Rurichhu Tsirang transmission line, 2 x 5 MVA 66/33KV substation at Tsirang, 33KV d/c line from Tsirang to Dagana and substation at Dagana
• 132KV Deothang – Rangia Transmission System
• 132KV and 66KV transmission system for Trongsa and Bumthang

All these projects, except the Trongsa and Bumthang line, would be completed in 2007.

iv. Procurement Services Department

The mandate of the department is to procure the best value of goods and services in a timely, consistent and transparent manner. PSD coordinates the major procurement of BPC and also manages the regional stores. For effective and efficient Materials Management, PSD has initiated the Inventory Management System (IMS) and Micro Stores System (MSS). The IMS shall be installed in all the Regional Stores and the MSS in all Divisional and field units. After the full implementation of the IMS and MSS in BPC, the procurement, stores and inventory management would be fully computerized.

For Check and Balance, PSD is also coordinating the Reconciliation and Physical Verification of various Project Funded Works and O&M materials of all the Divisions/Units.

v. Rural Electrification Department

The Rural Electrification Department (RED) is responsible for construction of medium voltage (MV) and low voltage (LV) lines, substations and provision of service connections to customers in rural areas. The mandate of the RED is to undertake distribution infrastructure expansion programs and work towards achieving the Royal Government’s goal of “Electricity for All by the year 2020”.

In the 9th Five Year Plan, 15,000 Households are targeted for electrification. The major source of funds for Rural Electrification Program is from the Asian Development Bank. RED also implements RE projects from grants from the Sustainable Development Agreement (SDA, Netherlands) and Austrian Coordination Bureau (ACB, Austria). In addition to these, the Royal Government of Bhutan also provides some funds for Rural Electrification. At present, the RED has three Section Offices to supervise and monitor projects, which are mainly on contracts, and are scattered all over the country. The section offices under the RED are:

1. Distribution Construction Section-East (DCS-East), Trashigang
2. Distribution Construction Section-West (DCS-West), Thimphu
3. Distribution Construction Section-Central (DCS-Central), Gelephu.
4. Rural Electrification Department
5. Transporting Conductor

vi. Finance and Accounts Department

The endeavor of the Finance and Accounts Department is to make the Corporation a self sustainable and profitable entity. Therefore, optimal and efficient use of resources; appropriate management control system; relevant budgeting mechanisms; and proper check and balance in the internal system are the important job aspect of the department.

The Department is further entrusted with the management of the corporate fund and asset in an efficient and effective manner. At the operational level, the Department is mandated to ensure transparency in all its financial dealings; be accountable for all its financial transaction; and to build professionalism and team sprit for efficient and effective operation.

vii. Human Resource & Administration Department

People in BPC are a friendly bunch, highly motivated with a driving ambition to be the best in whatever they do. They are with a zest for life that is reflected in all they do. Most of all, they make BPC a fun place to work for themselves and for their colleagues. People management practices to create this environ­ment, distinguish BPC among other corporations. The policies enable all BPC employees to excel and in­novate in what we do for our customers and in what we stand for as a corporation. During the year 2006, BPC recruited new employees from engineering, accounting, finance, and other academic backgrounds. At the same time, some employees either resigned or superannuated from the organization. BPC has a total of 1384 employees.

The organizational culture of BPC emphasizes learning and everyone in BPC is motivated to excel in their individual capacities and as team players. A culture that emphasizes performance, teamwork, leadership and social consciousness coupled with a strong training and performance management system are the hallmark of BPC. From the time of its inception, BPC has taken Corporate Governance seriously. Corpo­rate Governance and social responsibility forms a part of the Vision and Mission of BPC. The company has completed or initiated many new initiatives to fulfil the compliance need as per the GG plus docu­ment. Most of the articles under the Section V – Good Governance that are relevant to a public corpora­tion, have already been addressed.

An Internal Audit Cell has been created within the company. Proper monitoring and evaluating sys­tems mainly through automation are already underway. A legal unit will soon be instituted. The Service Manual, Financial Manual and the Inventory Manuals are being re-done in keeping with changes facing the company, lessons learnt from experiences and adopting best business practices, both locally and globally.

Future Projects

A. Transmission Line Project

Works are ongoing to extend the transmission lines in order to reach grid power supply to all the Dzongkhag headquarters during the 9th plan. The major transmission line works are described below.

1. Tintibi-Trongsa-Bumthang Transmission Line Project

Presently, the main source of power to Trongsa and Bumthang is the 3 x 500 KW Chumey Hydel. The power generated by the hydel is not adequate to meet the electricity requirements of the two Dzongkhags, especially in winter, thus requiring Bhutan Power Corporation Ltd to run diesel generator sets and also to undertake demand side management activities including load shedding. To meet the power demands in these two Dzongkhags, the transmission line to draw power from the Kurichhu project has been planed and implemented. This line would also provide construction power to Mangdechhu Hydroelectric Project as and when its construction commences in due course of time. Government of India is financing the project. The contract for the line works has been awarded and all efforts are being made to complete majority of the works within 9th plan. The project is being financed by the Government of India.

2. Rurichu-Tsirang-Dagana and Tsirang-Gelephu Transmission Line Project

The main objective of the project is to provide adequate and reliable power supply to Tsirang and Dagana Dzongkhags and partially evacuate power from Basochhu Hydropower Plant. The Tsirang-Gelephu portion of the line when built will form a part of East-West 220 kV National Grid interconnection network. This would stabilize the eastern grid and provide the additional power that will be required for the industrial estates in central and eastern Bhutan from the western generating stations. The contracts for both line and substation works have been awarded for the Rurichu-Tsirang-Dagana portion of the works and the efforts are being made to complete majority of the works within 9th plan. The detail studies are being carried out for the construction of the Tsirang-Gelephu portion of the line.

3. Deothang-Rangia Transmission line project

During the 9th Five Year Plan, at the request of RGoB, the Government of India has also agreed to finance the construction of a 132 kV Single Circuit Transmission Line from Deothang, Samdrup Jongkhar in Bhutan to Rangia, Assam in India to provide adequate transmission arrangements for reliable operation of Kurichhu Hydro Power Corporation Ltd. KHPCL has to shut down its generation during the maintenance of the Salakati substation in Assam or in case of any failure along the 248 km of the Kurichhu–Nangkor–Nganglam–Tintibi–Gelephu-Salakati transmission line. During such instances, there is complete black-out in the eight Dzongkhags of Eastern and Central Bhutan. Such outages also result in huge revenue losses to the KHPCL. The transmission line will also play a major role in catering to the power requirement of the upcoming Industrial Estate at Motanga, Samdrup Jongkhar. This project is also being financed by the Government of India.

B. Generation Projects

1. DPR of Punatsangchhu I Hydroelectric Project

The MoU for the preparation of the DPR of 1095 MW Punatsangchhu (I) Hydroelectric Project was signed between the Royal Government of Bhutan and Government of India (GoI) on 15th September 2003. Subsequently, the Ministry of External Affairs, GoI assigned the works to M/s. WAPCOS India Ltd. M/s. WAPCOS started DPR study at the site from February 2004 and study is nearing completion.

2. DPR of Punatsangchhu II Hydroelectric Project

The MoU for the preparation of DPR of the project was signed between RGoB and the GoI on 25th January 2005. The two governments have identified M/s WAPCOS of India for carrying out the DPR study for the Punatsangchhu II HPP. The DPR study is expected to commence within 9th plan.

3. DPR of Mangdechhu Hydroelectric Project

The MoU for the preparation of DPR of the project was signed between RGoB and the GoI on 25th January 2005. The two governments have identified M/s NHPC of India for carrying out the DPR study for the Mangdechhu HPP. The DPR study is expected to commence within 9th plan.

4. Feasibility Study of Dagachhu CDM Project

Feasibility studies and Project Design Document (PDD) for implementing 114 MW Dagachhu Hydroelectric Project as large scale Clean Development Mechanism (CDM) project under the Kyoto Protocol of the United Nations Framework Convention on Climate Change (UNFCCC) is being prepared. The Government of Austria is funding the feasibility study.