Energy trade quandary

Although hydropower, which is supposedly the clean energy, is the country’s major energy resource, it’s spending on dirty energy such as fossil fuel is negating the hydropower revenue.

While the electricity sector is the leading contributor to growth of the economy – its share to GDP accounts for 13.38 percent of the total GDP in 2016 – transport sector is completely dependent on fossil fuels. And this sector is growing rapidly.

In fact, between 2015 and 2016, consumption of fossil fuels increased more than the supply of electricity from hydropower plant.

In monetary terms, the supply of electricity increased from Nu 14.27B in 2015 to Nu 14.84B in 2016, an increase of almost 2 percent.

However supply of fuel swelled to Nu 8.97B in 2016 from Nu 7.96B in 2015, a growth of approximately 13 percent.

Considering loan repayment of the hydropower plants, which is about Nu 3B annually, energy trade balance not only hovers around the red, but clean energy is also traded with dirty.

This is as per the annual environment accounts published and compiled by the National Statistics Bureau (NSB).

Going by the domestic consumption pattern of electricity, consumption of electricity by industries dropped by almost 17 percent in 2016 compared with 2015. Industry accounted for almost 73 percent of the total consumption, while electricity consumption by households accounted for the remaining 27 percent.

It has been observed that electricity consumption by households steadily increased in 2016 while consumption by industries dropped.

In terms of percentage share, the overall domestic use decreased from 28 percent in 2015 to 27 percent in 2016. On the other hand, export share increased by 2 percent from 70 percent in 2015 to 72 percent in 2016.

Moreover, Bhutan’s electricity import during lean season has been declining. Between 2000 and 2016, there has been 10 percent increase in export of electricity on an average and import fell by slightly more than 30 percent.

On the flipside, Bhutan’s import of fossil fuels such as diesel, petrol and LPG is increasing.

The total supply of fuel increased from 155,972 KL in 2015 to 163,499 KL in 2016, which is increase of 5 percent. Use of petrol grew by 6 percent in 2016. Diesel use increased by 5 percent approximately

Bhutan imported around 127.54 million liters of diesel in 2016 as compared to 122.10 million liters in 2015, an increase of around 4 percent. Similarly, the import of petrol in 2016 increased to 359.60 million litres from 338.81 million liters in 2015, an increase of 6 percent.

Diesel import accounts for 78 percent in 2016 and petrol accounts for 22 percent.

This is primarily because the number of vehicles imported over the years has gradually increased. In 2016 alone, 9,419 units of vehicles were imported. Import of light vehicles was the highest at 6,188 units followed by heavy vehicles at 990 units, two wheelers at 734 units, taxi at 628 units, earth moving equipment at 399 units and power tiller at 229 units.

Kerosene is imported from India. Import of kerosene increased from 4,611 KL in 2015 to 4,791 KL in 2016. Import growth was about 4 percent.

Besides, kerosene supply grew from Nu 72.46M in 2015 to Nu 77.67M in 2016. Considering the national average household size of 4.5 and the projected population of 768,577 in 2016, every household consumes an average of 27.84 litres a year.

Likewise, the import of LPG increased from 7,302.60 MT in 2015 to 7,593.23 MT in 2016. Given that 14.2 Kg is the net weight of each cylinder, in 2016, about 545,999 LPG cylinders were consumed. This means that every household in 2016 consumed an average of 3 cylinders.

However, the annual environment accounts stated that from the total import of petrol and diesel, some portion is consumed by Indian vehicles plying on Bhutanese roads transporting goods into and out of Bhutan. It also includes fuel consumed by Indian tourist vehicles and refueling by Indian vehicles in the border towns of Samdrupjongkhar, Gelephu, Phuentsholing, and Samtse.

This re-export of fuel decreased from 19.85 million litres in 2015 to 14.94 million litres in 2016, a decrease by 25 percent.

The annual environmental accounts, according to the NSB, is intended to provide environment related information in key economic sectors so that planners, policy makers, researchers and other data users can use the information for better decision and policy-making purposes.

“Green Economy or green growth has been brought to the forefront of today’s agenda globally by many international experts. There is a growing demand for green economy indicators both from policy and decision makers,” the report stated.

Tshering Dorji

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