Launch of Sustainable Hydropower Development Policy 2021

The Hon’ble Tengye Lyonpo, Ministry of Economic Affairs, launched the Sustainable Hydropower Development Policy (SHDP) 2021 on April 21, 2021. The Royal Government of Bhutan recently approved the revised Policy.

The Kingdom of Bhutan is endowed with abundant renewable hydropower potential. Over the last four decades, hydropower has assumed a stature of national strategic importance and is the main backbone and driver of the nation’s economy. With the development of hydropower to its present installed capacity of 2,326 MW over a span of four decades and commensurate development of industries and nationwide electrification, the Bhutanese people have derived huge socio-economic benefits with even the remotest regions of the country now having access to clean, reliable and affordable electricity.

The previous Policy was approved in 2008 with the objective to accelerate hydropower development and to diversify investments in the sector. However, hydropower being a strategic national resource, and from the lesson learnt with its development, there is a need to consider changes in national circumstances, priorities and evolving aspirations of our people. These have been the compelling reasons for initiating the review of the SHDP 2008.

The domestic demand for electricity is likely to continue to grow at a rate that may soon exceed firm generation capacity. While development of hydropower should keep pace with the increase in domestic demand, a key challenge facing the sector is the low proportion of firm power vis-à-vis installed capacity. Therefore, strategic interventions are necessary to enhance energy security through innovative mechanisms such as promotion of reservoir/pump storage schemes, and integrate hydropower with other emerging renewables technologies and resources.

There is also an opportunity to pursue energy storage by-products such as hydrogen fuel, green ammonia and other innovative technologies to add value on to our clean energy, besides providing reliable and competitively priced electricity to the industries. The revised policy therefore endeavors to address the need for enhancing the energy security for the country and develop value chains based on available clean energy. To this end, the Royal Government will make concerted efforts to reap the benefits of entire value chain of the hydropower resource in the future.

Furthermore, the climate change impact in Bhutan is already visible by way of its melting glaciers, which is a major source of its abundant hydropower. There is a need to step up collective efforts towards smart and integrated management of watersheds and catchment area protection to make hydropower development a climate resilient undertaking in times to come.