Monday, June 8, 2015

Worry not for the Market for Bhutan's hydro electricity in the coming years.

It was amusing to recently read in the Bhutanese assorted media questions and doubts about India being able to buy electricity from Bhutan in the future. It seems that Indian authorities had announced that India already had electricity power surplus. And that news had spooked some Bhutanese. It revealed the shallowness of knowledge or laziness in taking the trouble to think over. Maybe the nation suffers from a tendency of jumping guns just to make news and excite readers.

India is going full swing in luring Investors to invest in Make in India projects. And projects need electricity like crops need rain. India has to tell likely Investors that there is electricity power surplus in India. So do not take politics of a Nation or a marketing strategy of a Corporation at face value.

It is possible that if India marshals all her potentials she can easily do without any electricity power import from Bhutan. In Winter Bhutan imports electricity from India not export.  And this has been going on for years. So if India so chooses to discontinue import she can do so even today. There is no need to wait for the ongoing hydro projects to complete.

In my layman knowledge, electricity can be produced from hydro,thermal and nuclear methods. Hydro energy is renewable energy whilst other two are not. It is considered to be more eco friendly in the long run and cheaper in per unit production cost.. The project gestation period is much longer though.

India has all types of production facilities: hydro, thermal and nuclear. However, what India or any other nation would prefer is hydro electricity. The disadvantage of hydro electricity is the initial damage to natural habitat and displacement of population to make way for dams and water reservoirs. For hydro projects constructed in Bhutan to meet electricity demand of India, the ill effects are contained within Bhutan. India simply buys the clean and cheap energy : the hydro electricity from Bhutan. If India can replace oil, gas, coal and nuclear energy produced electricity with import of cheap and clean hydro electricity from Bhutan, she would surely do so.

And if by some Hanuman miracle, India has adequate hydro plants to produce all her clean energy needs some centuries later, Bhutan can export to Bangladesh. And if India denies power export corridor to Bangladesh then request China to buy. Do not worry about relay towers, these will come about.

China is presently funding 46 billion American dollars in Pakistan occupied Kashmir for socio- economic uplifting of the populace there versus India committing 45 billion rupees funding towards Bhutan's 11th 5 year Plan and that involves so much procedural demands to ensure that maybe only 60% could ever be utilised during the plan period and the balance committed fund will lapse. I do not imagine China quibbling about relay tower cost or paying reasonable power purchase price to Bhutan.

The above Bangladesh and China prospect scenario is simply a humour to tickle the market sceptics in Bhutan.  India will buy what power surplus Bhutan can export. Why the fuss about something that Bhutan as yet is unable to accomplish. It may be 2030 before Bhutan can even meet the 2018 set target of 10,000 MW production.

Do not worry about future market. What is dangerously worrying is the ridiculously  huge escalation in cost of construction and prolonged time taken to complete
the on- going hydro projects. Both the costs and duration seem to be heading towards doubling of money and time. Costs may even triple.  By the time these projects are completed, the 10% interests on the 70% loan component and the principal itself would have bloated to such an extent that even after every project is streamed on line, Bhutan may be forced to raise money from different sources to meet loan repayment instalments. What was envisaged to be initially white gold bank for the nation, could lead the Kingdom to a black hole of economic liability and bondage. Bhutan better be prepared to be more honest and responsible in the implementation of the hydro projects. Presently there seems to be too much politics, extensive delays and change or faults in designs and huge cost escalations. All potential signs of economic and political disaster if not addressed and attended to by full time qualified career officers instead of part time hot shots. Good Luck in production of electricity for Market is a plenty in India.


  1. The Bhutanese Media is mouth pieces of present govt. since this govt. is not in position to accomplished set target 10,000 MW hydro power construction. So, the govt. is gathering evidences for self selfie and indirectly informing to public that why they fail to fulfill set tar-gate of above mention.

  2. yes, it is gud excuse for this gov not coming up any new hydro project for last 2 yrs!!!Indian economy is growing very fast n she will need more energy only! As author stated, if India wishes, she can choose not to buy even existing power...our export is peanut compared to Indian requirement!

  3. The government is not efficient enough to handle the hydro-power projects that have been planned. Thats why the easiest way out is to come up with excuses that we hear and read in the media. As for the media by now we know too well that they parrot the government instructions. So much for the so called media being the "watchdog" in Bhutanese democracy.

  4. I agree that the hydro power projects in Bhutan no longer seem like a good idea. The costs have escalated and we have no control as the projects are given to companies that India has chosen. They in turn are trying to raise costs to maximize their profits. Bhutan will be mired in debt to India as we struggle to repay the interest.