Bhutan, a country of less than one million inhabitants, is a mostly highland nation keen on holding onto its ancient Himalayan and Buddhist traditions. Yet, in some ways western ideals and modernization have made measured inroads into urban areas in the past decade. A growing number of people in government, as well as civil society, are advocating high economic growth goals. This development is being pursued steadily within the parameters laid out by their much-celebrated Gross National Happiness Commission. With great clarity, the Bhutanese government insists on maintaining a low-volume, but high-value tourism policy that has been the traditional mainstay of their economy.
The wheels of change were put in motion in the 1970s, when Bhutan and Indian officials began to study the feasibility of tapping the hydropower potential of the Himalayan Rivers flowing into and out of their sovereign limits. The hydropower potential of the gushing perennial mountain streams was identified as the sector to get them out of a sluggish isolated agrarian economy. Today, and for some years now, hydropower has become the financial mainstay, generating more than half the gross domestic product. The comparative growth of this sector has been so staggering that commentators have begun questioning the current all-eggs-in-one-basket approach.
Bhutan is economically and geopolitically an important regional ally of India. India is also Bhutan’s leading trade partner. In the past, three American presidents have visited the Himalayan kingdom, and the previous Indian Prime Minister, Manmohan Singh, made a state visit in 2008. On assuming power in May 2014, India’s current Prime Minister Narendra Modi made his first visit to Bhutan, highlighting the importance of the relationship between both countries. At the heart of this relationship is hydropower development; Modi laid the foundation stone for the 600 MW Kholongchhu project during his visit last year.
The Himalayan Rivers flow through Bhutan with mouthwatering gradients if viewed from the perspective of a hydropower company. Bhutan’s hydropower journey began with the Chukha HydroElectric Project (HEP), the country’s first large hydropower project, conceived in the 1970s, and commissioned in the late 1980s. The 336 MW project on the Wangchhu river was built by India on a turnkey basis, with 60% of the capital provided as grant, the rest in the form of a concessional loan. The project is a revenue earner for Bhutan through export of electricity to India, and until a decade back contributed over a quarter of Bhutan’s total revenue.
After the commissioning of the Chukha HEP, there was a gap before a steady stream of projects began generating power. Next in line were the 60 MW Kurichhu HEP in 2001, the 40 MW Basochhu in 2005, the 1,020 MW Tala HEP in 2007, and the 126 MW Dagachhu HEP earlier this year. To view a list of projects under construction, and those in the planning pipeline, click here.
Given that nearly three-fourths of all electricity generated in Bhutan is exported to India, that explains the latter’s interest and involvement beyond its own borders. The big agreement between the two neighbours to drive hydropower development in Bhutan was signed in 2006 to cooperate in the field of hydropower. India agreed to import at least 5,000 MW. In 2009, this was boosted to import 10,000 MW by 2020, otherwise known as the 10/20 program.
|Serial Number||Project and Location||Installed capacity (MW)||Implementation Mode||Status|
|1||Chamkarchhu Integrated||1397+853||IPP/PPP||PFR Under preparation|
|2||Dangchhu, Wangdue||120||IPP/PPP||PFR Under preparation|
|3||Dagachhu-II, Dagana||135||IPP/PPP||PFR to be prepared|
|4||Shongarchhu, Mongar||107||IPP/PPP||PFR to be prepared|
|5||Manas reservoir I & II, Zhemgang||1800+1000||IG||PFR to be prepared|
|6||Jhomori, Sjongkhar||73||IPP/PPP||PFR to be prepared|
|7||Amochhu I & II, Haa||747+500||Reconnaisance study to to done||Reconnaisance study to to done|
|8||Mochhu-I, Gasa||658||Reconnaisance study to to done||Reconnaisance study to to done|
|9||Kholongchhu, Yangtse||130||Reconnaisance study to to done||Reconnaisance study to to done|
|10||Samchhu, Haa||71||Reconnaisance study to to done||Reconnaisance study to to done|
|11||Pachhu, Chukha||77||Reconnaisance study to to done||Reconnaisance study to to done|
|12||Pipingchhu, Chukha||55||Reconnaisance study to to done||Reconnaisance study to to done|
|14||Nikachhu, Trongsa||118||PPP||All clearances obtained|
|15||Rotpashong, Lhuentse & Mongar||1230||PPP||DPR to be prepared|
|16||Nyera Amari, S Jongkhar & Trashigang||141+332||PPP||PFR under preparation|
|17||Gamri Integrated, Trashigang||81+85||PPP||PFR to be prepared|
Source: Department of Renewable Energy, Royal Government of Bhutan
According to data published by the Ministry of External Affairs, Government of India, the assistance package in 2002-08 was to the tune of Rs 26.1 billion. This included Rs 9.07 billion for project tied assistance, Rs 8.2 billion as grant, and the rest in the form of refunds and subsidies. In the tenth plan, 2008-13, the Government of India committed assistance worth Rs 34 billion. But in spite of increased financial assistance, the remaining three projects of the 10/20 program – the Kuri Gongri HEP, the Amochhu Reservoir HEP and Sankosh Reservoir HEP – remain in the planning pipeline. India, in a change of heart, last year declined to finance these projects; Bhutan, however, is keen on going ahead with these projects, although they have been put on the back burner. The Joint Group meets every quarter, and the respective ambassadors are permanent invitees to these meetings.
Most of Bhutan’s rivers drain into the Brahmaputra River. Civil society organizations have expressed concern that the project appraisal must take into account the downstream impacts. The Indian states of Assam and West Bengal share a border of 267 and 183 km respectively with Bhutan. The Manas and Sankosh River drain into Assam. The 600 MW Kholongchhu HEP, whose foundation stone was laid by Prime Minister Modi, is upstream in the Manas river basin and an emergent concern for groups living downstream in India. Other planned reservoir dam projects, located upstream in the Manas and Sankosh river basin, will have social and ecological impacts downstream.
The Central Electricity Authority, a technical agency that oversees the development of the power sector in India, identified about 76 locations in Bhutan for hydropower projects to be built with a potential capacity of 23,760 MW. This plan envisaged that every single river in the Himalayan kingdom would be dammed. While the Government of Bhutan has begun to express caution about maximizing its full hydropower potential, there remain concerns about the lack of information in the public domain regarding existing and proposed projects, and their cumulative impacts, including downstream in India. However, neither the Government of Bhutan nor its counterparts across the border have put the Environment Impact Assessment reports of commissioned or under construction HEPs on their websites. There are grave concerns about the impacts on downstream communities, the flow of water in the lean and other seasons, the sediment and biota flows, as well as the health of riverine ecosystem.
Hydropower is the bread and butter sector of the Bhutanese economy. Top officials have made clear that even though climate change has begun to adversely impact precipitation patterns and river flows, they cannot not exploit hydropower potential due to future changes. A report from a 2012 international conference on glacial lake outburst floods mentions that “Bhutan has 677 glaciers and 2,794 glacial lakes and over the last two centuries we have experienced more than 21 glacial lake outburst floods of which 4 outburst cases have been reported in the last forty years”. According to the report, 25 glacial lakes are ticking time bombs and have been identified as potentially dangerous. Such potential disasters and the resulting gush of waters in Bhutan’s rivers need to be factored into dam safety analysis. If not for the economic compulsion, Bhutanese officials make it clear they would not rely so heavily on hydropower. Bhutan is still grappling with how to generate revenue through other means, though.
It is expected then that Bhutan will be impacted by floods, landslides and reduced energy production from hydropower due to changes in glacial melt and precipitation patterns. In fact, the country may lose 6.6% of its Gross Domestic Product annually by 2100, due to melting glaciers and climate change induced extremes, according to a 2014 Asian Development Bank report. Besides tourism and hydropower, agriculture will be impacted as well.
Bhutan however is learning fast and developing capacity to exploit the hydropower potential of rivers flowing within the country’s boundaries. They are no longer solely dependent on Indian or international expertise. Druk Green Power Corporation’s Projects Department now has the capacity to lead a project up to the feasibility study stage. They still have to develop capacity for detailed designing of dams, however. But they are building capacity with two of their own projects, the Dagachhu and the Nikachhu. There are now local companies that can do ESIA (Environment & Social Impact Assessments) and hydrological, geological and geotechnical studies. There is agreement that more needs to be done on the social and environmental front, and that the government should take more interest in these aspects of dam development.
Bhutan has several major river systems flowing swiftly out of the Himalayas that are fed by glaciers in northern Bhutan. They flow south and join the Brahmaputra River basin in India. The Brahmaputra flows into Bangladesh and drains into the Bay of Bengal. The health of this entire ecosystem, and those dependent on the rivers, are currently at risk with the commissioned, under construction and planned projects in Bhutan. There is need for greater cooperation between Bhutan and India to ascertain the cumulative impacts of the projects and to work together in the greater interests of society to ascertain the carrying capacity of the riverine ecosystems.
Bhutans picture of Gross National Happiness blurs (Part I)
Bhutans picture of Gross National Happiness blurs (Part II)
The perils of climate change in Bhutan
Comments on proposed CDM credits for Tala Hydropower project
Comments on CDM project design for Tala Hydropower project