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On 22 March, the Climate Parliament hosted a national virtual parliamentary roundtable with MPs from Bhutan. This meeting was organised in collaboration with Oxford Policy Management (OPM), in the context of the Energy for Economic Growth (EEG) research programme. Pankaj Batra, Project Director at the South Asia Regional Initiative for Energy Integration at Integrated Research and Action for Development (IRADe), which is responsible for enhancing cross-border energy trade among South Asian countries, joined our conversation to discuss the challenges and opportunities of renewable energy in Bhutan with the parliamentarians.
As a mountainous nation, Bhutan is on the frontline of climate change, and the country is seen as a role model in renewable energy. The total installed energy capacity in Bhutan amounts to 2,342 MW, with a huge share of hydropower accounting for 99.63% of that total. Just like its neighbour Nepal, Bhutan has a high inflow of water from April to October, during the monsoon season. It allows the country to be almost completely energy self-sufficient. But the highest demand for electricity being during the winter, when the water inflow is low, sometimes Bhutan needs to import from abroad. This was the case in January 2022, when the Tala hydroelectric power plant had to be momentarily shut down for repair work, compelling the country to import electricity from India. Following the resumption of power generation, Bhutan is now once again generating surplus power for export to India.
Bhutan could benefit greatly from a deeper level of energy interconnection in the South Asia region. Just like European mountain countries such as Switzerland, Austria and France, Bhutan could use its hydropower as a way of balancing the grid, when overall energy supply is lower than demand. In a future renewable energy-powered economy, when the wind is not blowing and the sun is not shining, Bhutan could sell its hydropower at top prices to help fill the gap and meet the level of demand, and help its neighbours decrease and eventually stop resorting to coal-powered stations. The country could also optimise its use of resources by strategically storing water when market prices are low — even if that means importing cheap energy from abroad temporarily — to produce and export electricity at times when prices rise. Besides the climate argument, regional cooperation and energy interconnection could help Bhutan reap huge economic benefits.
Several MPs raised their concern about the sustainability of hydropower in the long run. As glaciers melt and rainfall patterns change, water is becoming an increasingly unreliable resource, and Bhutan is quite rightly exploring alternative sources of energy such as solar PV and wind to expand its energy system. A big advantage of having solar PV in the mountains is that the cooler atmosphere makes solar plants operate more efficiently. In order to have a more sustainable renewable energy system, Bhutan will not only need to have a balanced energy mix, but also to have the largest possible market expansion, as advocated by the vision of the GGI-OSOWOG partnership. If Bhutan is able to sell energy at peak time to other countries that have time difference, including Bangladesh, India, Myanmar, Thailand and all of Southeast Asia, the country could make an important contribution to the regional market and grid stability, while greatly improving funding from financial institutions and private project developers.
The MPs also asked questions about their role, and about the institutional structure that would allow this vision to come to life. According to Pankaj, such collaboration always starts with an informal platform where all the regional stakeholders are able to discuss together and build a consensus. It is crucial to allow the different levels of decision making, governments, parliaments, the utility and regulatory sides, to get to know each other, trust each other and learn how to work together well. And just like how it happened in Europe, a solid informal groundwork can lead naturally to a formalised institutional structure. Bhutan could play an important role in raising awareness about the acute urgency of fighting climate change, in helping to convene all the actors to the same table to push its neighbours to take a firmer stand, and to act at the necessary speed and scale If we want to stay within a safe carbon budget.