The government is not worried about the power surplus in India, the education minister Norbu Wangchuk said during the recent meet the press session.
The minister was answering media queries on the government’s plan to explore investments other than hydropower since Central Electricity Authority (CEA), India projected power surplus for the 2017-2018 fiscal year.
This comes after the CEA, which is India’s central electricity regulator and media reports stated that India would have a power surplus of 8.8 percent this year.
Lyonpo Norbu Wangchuk said that the CEA’s projection on power surplus in India is based on the demand power of distribution companies and not on the actual power need in India.
He also said that the demand for power in India would be much more than what the CEA has projected for the fiscal year, as India’s economic growth rate is expected to grow at eight percent. “The demand for power would come from the end users like manufacturing industries.”
Indian media reports state that an estimated 45 million rural households are without electricity and several cities face power cuts frequently.
Lyonpo Norbu Wangchuk said the government is not concerned about falling power tariff in India as the bilateral agreement between the two countries is based on cost plus model. “The agreement clearly states that all surplus power from Bhutan will be purchased by India.”
He said that the agreement mandates India to buy surplus power from Bhutan and cost plus model ensures a return on equity, which means the projects assure return on investment along with certain profit.
The minister said that the government, therefore, does not see a situation where there is no market for surplus power. “Both power surplus and tariff fall situation are not a concern for us.”
He also said that the future of hydropower holds strong as the government is learning a lot through its experience in hydropower sector for 40 years.