Bhutan launches Sustainable Hydropower Development Policy 2021

Bhutan hydropower policy

The Hon’ble Tengye Lyonpo, Ministry of Economic Affairs, recently launched the Sustainable Hydropower Development Policy (SHDP) 2021. The Royal Government of Bhutan has approved the revised policy.

The Kingdom of Bhutan is endowed with abundant renewable hydropower potential. Over the past four decades, hydropower has assumed a stature of national strategic importance and is the main backbone and driver of the nation’s economy. With the development of hydropower to its present installed capacity of 2,326 MW over a span of four decades and commensurate development of industries and nationwide electrification, the Bhutanese people have derived huge socioeconomic benefits, with even the remotest regions of the country now having access to clean, reliable and affordable electricity, according to a press release.

The previous policy was approved in 2008, with the objective to accelerate hydropower development and to diversify investments in the sector. However, hydropower being a strategic national resource, and from the lessons learnt with its development, there is a need to consider changes in national circumstances, priorities and evolving aspirations of people in the country. The government said these have been the compelling reasons for initiating the review of the SHDP 2008.

According to the new report, the country has estimated hydropower potential of 36,900 MW, with annual production capability of 154,000 GWh.

The domestic demand for electricity is likely to continue to grow at a rate that may soon exceed firm generation capacity. While development of hydropower should keep pace with the increase in domestic demand, a key challenge facing the sector is the low proportion of firm power vis-à-vis installed capacity. Therefore, strategic interventions are necessary to enhance energy security through innovative mechanisms, such as promoting reservoir/pump storage schemes and integrating hydropower with other emerging renewables technologies and resources.

There is also an opportunity to pursue energy storage by-products such as hydrogen fuel, green ammonia and other innovative technologies to add value on to the country’s clean energy, besides providing reliable and competitively priced electricity to industries. The revised policy therefore endeavors to address the need for enhancing energy security for the country and develop value chains based on available clean energy. To this end, the Royal Government will make concerted efforts to reap the benefits of the entire value chain of the hydropower resource in the future.

Furthermore, the impact of climate change is already visible in Bhutan by way of its melting glaciers, which is a major source of its abundant hydropower. There is a need to step up collective efforts toward smart and integrated management of watersheds and catchment area protection to make hydropower development a climate-resilient undertaking in times to come.

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