Additional revenue of Nu 580M expected  annually

Dechen Dolkar  

With the revision of the export tariff of the Chukha hydropower by Nu 0.45, the 336MW Chukha hydropower project is estimated to earn an additional revenue of Nu 580M annually.

The revision was announced during the visit of His Majesty The King to India from April 3 to 5.

On the periodic revision of the tariff of Chhukha hydropower, the Bhutanese side welcomed India’s offer to revise the tariff to Rs 3 per unit, which represents a 17 percent increase over the earlier tariff.  Currently, the export tariff rate is Nu 2.55 a unit.

In 2017, the Chukha power tariff was revised by 30 Chhetrum to Nu 2.55.

As per the bilateral agreement the revision due was in January 2021, which is supposedly every four years.

As per Druk Green Power Corporation (DGPC) annual forecasts, with the 45 Chhetrum increase, the Chukha hydropower project would earn additional revenue around Nu 580M annually.

Chukha generates 1,800 million units (MU) of power annually. Overall, Chukha hydropower plant earns revenue of about Nu 4.5B annually out of which Nu 600M is from domestic sales.   

This year it is projected to export around 1,300MU and last year it exported around 1,625MU amounting to a revenue of Nu 4.1B.

Officials from the power sector said that due to the increase in domestic consumption, exports are decreasing. With the new tariff, for this year, it is expected to earn revenue of around Nu 3.9B from the export of power.

The tariff in this way was revised around eight times, since the commissioning. It was first sold at Rs 0.19 a unit in 1989 when the project was commissioned.

Chukha hydropower project is the oldest project commissioned sometime in 1988. It was built on a 60 percent loan and 40 percent grant. The entire loan component has been repaid fully by 2007.


64MW Basochhu project

Similarly, the Government of India (GoI) agreed to positively consider Bhutan’s request for sale of power into the Indian Energy Exchange from the 64MW Basochhu hydropower project.

The government of Bhutan has requested GoI to buy surplus power from the Basochhu hydropower project plant in the Indian market when there are surplus generations in summer months.

Officials from the power sector from Bhutan said that they are positive that it would be approved by May and June this year. Basochhu generates 300MU of power annually. It is projected to export around 200MU.

Tariffs, meanwhile, will be determined by the market price at the stock market, where the government of Bhutan will directly export to the Indian Energy Exchange. “The price will be determined as how the price is determined during the import of electricity during winter,” said an official.

Electricity is purchased from the Day Ahead Market (DAM) of the Indian Energy Exchange through a competitive bidding process. In the exchange, prices are determined through a day-ahead double-sided auction from both buyers and sellers for every 15-minute time block.

The GoI also assured consideration of Bhutan’s request for access to financing and market for power sale for new and upcoming hydropower projects in Bhutan.

Both sides reiterated the importance of cooperation in the hydropower sector and the urgent need to review and finalise modalities for new projects including the Sankosh hydropower project.