Energy in Bhutan
Encyclopedia
Energy in Bhutan has been a primary focus of development in the kingdom under its Five-Year Plans
Five-Year Plans of Bhutan
The Five Year Plans of Bhutan are a series of national economic development plans created by the government of Bhutan since 1961.The government of Bhutan has played a pervasive role in its economy and development...

. In cooperation with India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

, Bhutan
Bhutan
Bhutan , officially the Kingdom of Bhutan, is a landlocked state in South Asia, located at the eastern end of the Himalayas and bordered to the south, east and west by the Republic of India and to the north by the People's Republic of China...

 has undertaken several hydroelectric
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...

 projects whose output is traded between the countries. Though Bhutan
Bhutan
Bhutan , officially the Kingdom of Bhutan, is a landlocked state in South Asia, located at the eastern end of the Himalayas and bordered to the south, east and west by the Republic of India and to the north by the People's Republic of China...

's many hydroelectric plants provide energy far in excess of its needs in the summer, dry winters and increased fuel demand makes the kingdom a marginal net importer of energy from India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

.

As of 2011, the Bhutanese government supplied electricity to 60 percent of rural households, a significant increase from about 20 percent in 2003. About 2,500 people used solar power throughout Bhutan. Even where electricity was available for lighting, most rural households cooked by wood fire. Rural homes were often heated with firewood
Firewood
Firewood is any wood-like material that is gathered and used for fuel. Generally, firewood is not highly processed and is in some sort of recognizable log or branch form....

, kerosene
Kerosene
Kerosene, sometimes spelled kerosine in scientific and industrial usage, also known as paraffin or paraffin oil in the United Kingdom, Hong Kong, Ireland and South Africa, is a combustible hydrocarbon liquid. The name is derived from Greek keros...

, or liquid petroleum gas.

Bhutan has no natural petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...

 or natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

 reserves. The kingdom has some 1.3 million tonnes of coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...

 reserves, but extracts only about 1,000 tonnes of coal yearly, entirely for domestic consumption. Bhutan also imports oil at some 1,000 barrels per day. Most oil imports supplied fuel for automobile
Automobile
An automobile, autocar, motor car or car is a wheeled motor vehicle used for transporting passengers, which also carries its own engine or motor...

s.

Bhutan remains overall carbon-neutral and a net sink for greenhouse gas
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...

es. As Bhutan develops and modernizes, however, its domestic demand for energy in household, commercial, and industrial sectors has steadily increased.

Government agencies and operations

Until 2002, Bhutan's energy sector was overseen by the Ministry of Trade and Industry, Department of Power. In 2002, reforms in the executive Lhengye Zhungtshog
Lhengye Zhungtshog
The Lhengye Zhungtshog is the highest executive body in Bhutan. It was created in 1999 by Jigme Singye Wangchuck, the fourth King of Bhutan....

 produced three new bodies under the Ministry of Economic Affairs: the Department of Energy, its subsidiary Bhutan Electricity Authority, and the Bhutan Power Corporation. While the Department formulates policy, planning, and coordination, the Authority is the main regulatory agency of the energy sector. Since 2006, the Authority has had the authority to impose differential tariff structures on low, medium, and high voltage consumers.

Through 2011, the Bhutan Power Corporation remained a publicly held corporation, comprising about 9 percent of the nation's civil service, though its long-term goals included privatization. In December, 2009, Bhutan Power Corporation had 91,770 customers across the country, out of which 47,846 were rural domestic users. It planned and built hydroelectric plants under a licensure scheme regulating the size and output of projects.

In January 2008, the government amalgamated its three wholly-owned hydroelectric companies — Chukha Hydro Power Corporation, Basochhu Hydro Power Corporation, and Kurichhu Hydro Power Corporation — into Druk Green Power Corporation. In addition to its first three plants, Druk Green assumed control of Tala Hydropower Plant
Tala Hydroelectricity Project
Tala Hydroelectricity project is the biggest hydroelectric joint project between India and Bhutan so far, generating 4865 GWh/yr. Tala is located in Chukha Dzongkhag in western Bhutan, a small constitutional monarchy in the Himalayas. It is located on the Wongchu River and, and is at a height of...

 in 2009. Druk Green operates as a holding company to oversee and accelerate hydropower and alternative energy development.

Both the Bhutan Power Corporation and Druk Green are owned by Druk Holding and Investments, which exercises oversight in the investment and development activities of the energy companies. Both companies faced decreased profit margins largely because of losses due to increased energy price on repurchase from India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

.

Production and consumption

In the early 21st century, about 70 percent of all energy consumption in Bhutan was in the household sector. Heating and cooking with firewood
Firewood
Firewood is any wood-like material that is gathered and used for fuel. Generally, firewood is not highly processed and is in some sort of recognizable log or branch form....

 in particular accounted for between 70 and 90 percent of total energy consumption and virtually 100 percent of household energy consumption. In contrast, commercial activities in Bhutan were fueled mostly by hydroelectricity
Hydroelectricity
Hydroelectricity is the term referring to electricity generated by hydropower; the production of electrical power through the use of the gravitational force of falling or flowing water. It is the most widely used form of renewable energy...

 (about 97%), some fossil-fuel based thermal power (about 3%), and a minimal amount of other fossil fuels. As a result, Bhutan sold much of its hydroelectricity to India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

 during summer months.

To date, the Bhutanese electric energy supply has been virtually entirely hydroelectric. Due to the vulnerability of the water supply amid climate change, the Bhutanese government began exploring alternative energies such as solar
Solar power
Solar energy, radiant light and heat from the sun, has been harnessed by humans since ancient times using a range of ever-evolving technologies. Solar radiation, along with secondary solar-powered resources such as wind and wave power, hydroelectricity and biomass, account for most of the available...

, wind
Wind power
Wind power is the conversion of wind energy into a useful form of energy, such as using wind turbines to make electricity, windmills for mechanical power, windpumps for water pumping or drainage, or sails to propel ships....

, and biogas
Biogas
Biogas typically refers to a gas produced by the biological breakdown of organic matter in the absence of oxygen. Organic waste such as dead plant and animal material, animal dung, and kitchen waste can be converted into a gaseous fuel called biogas...

 energy in the early 21st century.

Hydropower plants

Bhutan operates four major hydroelectric facilities, several small and mini hydroelectric generators, and a handful of further sites in development. Many of the small and mini hydropower plants in Bhutan serve remote villages that remain disconnected from the main power grid. Almost all of hydroelectric plants in Bhutan generate power through run-of-the-river hydroelectricity
Run-of-the-river hydroelectricity
Run-of-the-river hydroelectricity is a type of hydroelectric generation whereby a considerably smaller water storage called pondage or none is used to supply a power station. Run-of-the-river power plants are classified as with or without pondage...

.

Earlier international efforts were mostly supported by grants from India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

, though later projects became majority loan-based. Other sovereign and multinational contributors, including the government of Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...

 and the Asian Development Bank
Asian Development Bank
The Asian Development Bank is a regional development bank established on 22 August 1966 to facilitate economic development of countries in Asia...

, have also funded and developed Bhutan's hydroelectric projects. In the early 2010s, Bhutan began to shift its focus to public-private partnerships for future development, however the process and requirements have operated to exclude many Bhutanese contracting firms.

Chukha Hydropower Project

The Chukha Hydropower Project, or Chukha Hydel, was Bhutan's first mega power project. Its construction started in the 1970s, it was commissioned in 1986, and Bhutan assumed full control in 1991. During the summer, the plant generates 336 MW from four turbine
Turbine
A turbine is a rotary engine that extracts energy from a fluid flow and converts it into useful work.The simplest turbines have one moving part, a rotor assembly, which is a shaft or drum with blades attached. Moving fluid acts on the blades, or the blades react to the flow, so that they move and...

s off the flow of the Wangchhu
Raidak River
The Raidak River is a tributary of the Brahmaputra River, and a trans-boundary river, flows through Bhutan, India and Bangladesh.-Bhutan:...

 river in central Chukha District, between Thimphu
Thimphu
Thimphu also spelt Thimpu, is the capital and largest city of Bhutan. It is situated in the western central part of Bhutan and the surrounding valley is one of Bhutan's dzongkhags, the Thimphu District. The city became the capital of Bhutan in 1961...

 and Phuentsholing. The project cost Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...

2.46 billion, wholly funded by the Government of India
Government of India
The Government of India, officially known as the Union Government, and also known as the Central Government, was established by the Constitution of India, and is the governing authority of the union of 28 states and seven union territories, collectively called the Republic of India...

, 60 percent under grants and 40 percent under a fifteen-year loan at 5 percent interest. In 2009, two diversion pipes from neighboring rivers to make up for the Wangchhu's decreased river flow during dry winter months.

Most of Chukha's energy is exported to West Bengal
West Bengal
West Bengal is a state in the eastern region of India and is the nation's fourth-most populous. It is also the seventh-most populous sub-national entity in the world, with over 91 million inhabitants. A major agricultural producer, West Bengal is the sixth-largest contributor to India's GDP...

, Bihar
Bihar
Bihar is a state in eastern India. It is the 12th largest state in terms of geographical size at and 3rd largest by population. Almost 58% of Biharis are below the age of 25, which is the highest proportion in India....

, Jharkhand
Jharkhand
Jharkhand is a state in eastern India. It was carved out of the southern part of Bihar on 15 November 2000. Jharkhand shares its border with the states of Bihar to the north, Uttar Pradesh and Chhattisgarh to the west, Orissa to the south, and West Bengal to the east...

, Orissa
Orissa
Orissa , officially Odisha since Nov 2011, is a state of India, located on the east coast of India, by the Bay of Bengal. It is the modern name of the ancient nation of Kalinga, which was invaded by the Maurya Emperor Ashoka in 261 BC. The modern state of Orissa was established on 1 April...

, and Sikkim
Sikkim
Sikkim is a landlocked Indian state nestled in the Himalayan mountains...

. Chukha was the kingdom's greatest source of income until the Tala Hydropower Project
Tala Hydroelectricity Project
Tala Hydroelectricity project is the biggest hydroelectric joint project between India and Bhutan so far, generating 4865 GWh/yr. Tala is located in Chukha Dzongkhag in western Bhutan, a small constitutional monarchy in the Himalayas. It is located on the Wongchu River and, and is at a height of...

 was commissioned in 2007. Between 2005 and 2006, Chukha alone contributed over 30 percent to Bhutan's total revenue. The plant is operated by Druk Green.

Tala Hydropower Project

Tala
Tala Hydroelectricity Project
Tala Hydroelectricity project is the biggest hydroelectric joint project between India and Bhutan so far, generating 4865 GWh/yr. Tala is located in Chukha Dzongkhag in western Bhutan, a small constitutional monarchy in the Himalayas. It is located on the Wongchu River and, and is at a height of...

 is a six-turbine
Turbine
A turbine is a rotary engine that extracts energy from a fluid flow and converts it into useful work.The simplest turbines have one moving part, a rotor assembly, which is a shaft or drum with blades attached. Moving fluid acts on the blades, or the blades react to the flow, so that they move and...

 conventional penstock
Penstock
A penstock is a sluice or gate or intake structure that controls water flow, or an enclosed pipe that delivers water to hydraulic turbines and sewerage systems. It is a term that has been inherited from the technology of wooden watermills....

 hydroelectric facility located a few kilometers downstream from the Chukha plant in Chukha District. Tala has a generative capacity of 1,020 MW, sourced by some 40 kilometers of tunnel and a net drop of 860 meters in elevation. The facility also contains a 92 meter high concrete dam and underground power house. Since full operations began in 2007, it has surpassed Chukha as Bhutan's leading power site. Like Chukha, Tala was wholly financed by India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

, 60 percent by grant and 40 percent through loans. Druk Green assumed control of Tala in April 2009.

Kurichhu Hydropower Project

The Kurichhu Hydropower Project, located on Kurichhu
Kuri Chhu
The Kuri Chhu, also known as the Lhobrak, is a major river of eastern Bhutan, that has formed a scenic valley with high peaks and steep hills...

 river in Mongar District
Mongar District
Mongar District is one of the 20 dzongkhags comprising Bhutan. Mongar is the fastest-developing dzongkhag in eastern Bhutan. A regional hospital has been constructed and the region is bustling with many economic activities. Mongar is noted for its lemon grass, a plant that can be used to produce...

, provides electricity to eight districts
Districts of Bhutan
Bhutan comprises twenty districts .-Districts:-District Statistics:The results of the 2005 census appear below:...

 (Mongar
Mongar District
Mongar District is one of the 20 dzongkhags comprising Bhutan. Mongar is the fastest-developing dzongkhag in eastern Bhutan. A regional hospital has been constructed and the region is bustling with many economic activities. Mongar is noted for its lemon grass, a plant that can be used to produce...

, Lhuentse, Trashigang, Trashiyangtse, Pemagatshel, Samdrup Jongkhar, Sarpang
Sarpang District
Sarpang District is one of the 20 dzongkhags comprising Bhutan.-Languages:...

, and Zhemgang) in eastern Bhutan. Like the Chukha project, Kurichhu was wholly financed by India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

, 60 percent in grants and 40 percent in loans.

The Kurichhu facility consists of a dam, its 1 million cubic meter capacity cement reservoir, and four turbine
Turbine
A turbine is a rotary engine that extracts energy from a fluid flow and converts it into useful work.The simplest turbines have one moving part, a rotor assembly, which is a shaft or drum with blades attached. Moving fluid acts on the blades, or the blades react to the flow, so that they move and...

s. The plant became operational on a staggered basis between April 2001 and May 2002. It generates 60 MW of electricity, much of which is exported to India. Druk Green operates the Kurichhu plant.

Basochhu Hydropower Project

The Basochhu power plant, located near Wangdue Phodrang
Wangdue Phodrang
Wangdue Phodrang District is a dzongkhag of central Bhutan. This is also the name of the dzong which dominates the district, and the name of the small market town outside the gates of the dzong...

, was built with Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...

n technical and financial assistance. Basochhu has a capacity of 24 MW and is fully computerized. The plant's turbines are powered by water on a fall. Basochhu is operated by Druk Green.

Punatsangchhu-I Hydroelectric Project

As of 2011, the 1,200 MW Punatsangchhu project between 7 km and 18.5 km downstream from Wangdue Phodrang
Wangdue Phodrang
Wangdue Phodrang District is a dzongkhag of central Bhutan. This is also the name of the dzong which dominates the district, and the name of the small market town outside the gates of the dzong...

 Bridge is under construction. It is funded 40 percent by Indian
Indian
Indian may refer to:On the Indian subcontinent:*Indian cuisine**Anglo-Indian cuisine* Indian people* A person belonging to one of the ethnic groups of India or South Asian ethnic groups * Languages of India...

 grant and 60 by loan. Construction began in November 2008 and its completion is expected by November 2015. Although the facility had not yet been built, all six of its turbine
Turbine
A turbine is a rotary engine that extracts energy from a fluid flow and converts it into useful work.The simplest turbines have one moving part, a rotor assembly, which is a shaft or drum with blades attached. Moving fluid acts on the blades, or the blades react to the flow, so that they move and...

s were completed by 2007.

Dagachhu Hydropower Project

The 126 MW Dagachhu project is under construction in Dagana District
Dagana District
Dagana District is one of the 20 dzongkhag comprising Bhutan...

. It is projected for completion in August 2013.

Other projects

Below is a table of other major hydroelectric projects in Bhutan:
District
Districts of Bhutan
Bhutan comprises twenty districts .-Districts:-District Statistics:The results of the 2005 census appear below:...

Site
Chukha District  (several sites in the south)
Lhuentse District  Tangmachhu
Mongar District
Mongar District
Mongar District is one of the 20 dzongkhags comprising Bhutan. Mongar is the fastest-developing dzongkhag in eastern Bhutan. A regional hospital has been constructed and the region is bustling with many economic activities. Mongar is noted for its lemon grass, a plant that can be used to produce...

 
Kilikhar
Paro District
Paro District
Paro District is the name of a district , valley, river and town in Bhutan. It is one of the most historic valleys in Bhutan. Both trade goods and invading Tibetans came over the pass at the head of the valley, giving Paro the closest cultural connection with Tibet of any Bhutanese district...

 
Chumdo
Paro District
Paro District
Paro District is the name of a district , valley, river and town in Bhutan. It is one of the most historic valleys in Bhutan. Both trade goods and invading Tibetans came over the pass at the head of the valley, giving Paro the closest cultural connection with Tibet of any Bhutanese district...

 
Waisa
Pemagatshel District  Nganglam
Pemagatshel District  Nangkot
Samtse District
Samtse District
Samtse District is one of the 20 dzongkhags comprising Bhutan.-History and culture:...

 
Phuentsholing
Samdrup Jongkhar District  Deothang
Sarpang District
Sarpang District
Sarpang District is one of the 20 dzongkhags comprising Bhutan.-Languages:...

 
Gelephu
Thimphu District
Thimphu District
Thimphu District is a dzongkhag of Bhutan. Thimphu is also the capital of Bhutan and the largest city in the whole kingdom.-Languages:...

 
Olekha (two sites)
Thimphu District
Thimphu District
Thimphu District is a dzongkhag of Bhutan. Thimphu is also the capital of Bhutan and the largest city in the whole kingdom.-Languages:...

 
Gemina
Trashigang District  Kanglung
Tsirang District
Tsirang District
Tsirang District , is one of the 20 dzongkhags of Bhutan. The administrative center of the district is Damphu...

 
Dhalay
Wangdue Phodrang District  Rurichu
Zhemgang District  Tingtibi (two sites)


Bhutan also operates several small hydroelectric projects, with output capacities ranging between 12 MW and 0.36 MW.

In 2008, there were 24 even smaller mini-macro hydropower plants generating about 4 MW of energy altogether. The largest of these were in Trashigang (Rangjung) and Bumthang
Bumthang District
Bumthang District is one of the 20 dzongkhag comprising Bhutan. It is the most historic dzongkhag if the number of ancient temples and sacred sites is counted...

 (Chhumey). Bhutan's first mini-hydroelectric facility was built in 1967 in Thimphu
Thimphu
Thimphu also spelt Thimpu, is the capital and largest city of Bhutan. It is situated in the western central part of Bhutan and the surrounding valley is one of Bhutan's dzongkhags, the Thimphu District. The city became the capital of Bhutan in 1961...

; it operated until 1988. Until the 1970s, Bhutan constructed many other small hydroelectric plants. During the 1970s, Bhutan and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

 began to partner on larger projects aimed at electrifying larger regions of Bhutan and addressing transnational energy needs.

Alternative energy

In the face of climate change
Climate change
Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...

 and growing energy demands, Bhutan has sought additional energy security through developing its alternative energy
Alternative energy
Alternative energy is an umbrella term that refers to any source of usable energy intended to replace fuel sources without the undesired consequences of the replaced fuels....

 sources.

Solar energy in Bhutan has received direct investment from domestic and international sources. In 2010, Asian Development Bank
Asian Development Bank
The Asian Development Bank is a regional development bank established on 22 August 1966 to facilitate economic development of countries in Asia...

 made a grant of over USD21 million for electrification of rural homes, aiming to provide power both on-grid and off-grid. The Bhutan Power Corporation provided solar electrification training for villagers from rural eastern areas of Bumthang
Bumthang District
Bumthang District is one of the 20 dzongkhag comprising Bhutan. It is the most historic dzongkhag if the number of ancient temples and sacred sites is counted...

, Lhuentse, Mongar
Mongar District
Mongar District is one of the 20 dzongkhags comprising Bhutan. Mongar is the fastest-developing dzongkhag in eastern Bhutan. A regional hospital has been constructed and the region is bustling with many economic activities. Mongar is noted for its lemon grass, a plant that can be used to produce...

, Pemagatshel, Samdrup Jongkhar, Sarpang
Sarpang District
Sarpang District is one of the 20 dzongkhags comprising Bhutan.-Languages:...

, and Wangdue Phodrang Districts Solar powered lighting is also available to many nomads living within protected areas of Bhutan.

In order to shift household dependence on firewood, Bhutan began re-exploring biogas development from cow dung
Cow dung
Cow dung is the waste product of bovine animal species. These species include domestic cattle , bison , yak and water buffalo. Cow dung is the undigested residue of plant matter which has passed through the animal's gut. The resultant faecal matter is rich in minerals...

. This included a five-year trial program in Chukha, Samtse
Samtse District
Samtse District is one of the 20 dzongkhags comprising Bhutan.-History and culture:...

, Sarpang
Sarpang District
Sarpang District is one of the 20 dzongkhags comprising Bhutan.-Languages:...

, and Tsirang District
Tsirang District
Tsirang District , is one of the 20 dzongkhags of Bhutan. The administrative center of the district is Damphu...

s from 2011 to 2015. Bhutan had previously explored generating biogas in an identical fashion in the 1980s, but the program was abandoned after failures in training of masons and users, after-sales service, and site follow-up.

In 2010, pilot windmill
Windmill
A windmill is a machine which converts the energy of wind into rotational energy by means of vanes called sails or blades. Originally windmills were developed for milling grain for food production. In the course of history the windmill was adapted to many other industrial uses. An important...

 programs were implemented to investigate the fea­sibility of using wind energy
Wind energy
Wind energy is the kinetic energy of air in motion; see also wind power.Total wind energy flowing through an imaginary area A during the time t is:E = ½ m v2 = ½ v 2...

 to alleviate hydropower drops during the dry winter seasons.

History

Since the late twentieth century, hydroelectric power has been a very important aspect of Bhutan's economic development as a low-cost energy source supporting more capital-intensive industries, such as forestry
Forestry in Bhutan
One of Bhutan's significant natural resources in the late twentieth century was its rich forests and natural vegetation. Bhutan's location in the eastern Himalayas, with its subtropical plains and alpine terrain, gives it more rainfall than its neighbors to the west, a factor greatly facilitating...

, mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...

, and cement
Cement
In the most general sense of the word, a cement is a binder, a substance that sets and hardens independently, and can bind other materials together. The word "cement" traces to the Romans, who used the term opus caementicium to describe masonry resembling modern concrete that was made from crushed...

 and calcium carbide
Calcium carbide
thumb|right|Calcium carbide.Calcium carbide is a chemical compound with the chemical formula of CaC2. The pure material is colorless, however pieces of technical grade calcium carbide are grey or brown and consist of only 80-85% of CaC2 . Because of presence of PH3, NH3, and H2S it has a...

 production. Bhutan's steep mountains, deep gorges, and fast-flowing rivers create abundant hydroelectric potential, which the government began to develop in the early 1960s with India's assistance.

During Bhutan's Third Five-Year Plan
Five-Year Plans of Bhutan
The Five Year Plans of Bhutan are a series of national economic development plans created by the government of Bhutan since 1961.The government of Bhutan has played a pervasive role in its economy and development...

, public works, still primarily roads
Transport in Bhutan
Transport in Bhutan comprises approximately of roads and two airports, Yongphulla Airport and Paro Airport, the latter of which serves international flights...

, continued to take a significant share of the Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...

475.2 million development budget (17.8 percent). Despite amounts budgeted for planned development, there were additional capital expenditures outside the formal development plan, including road construction and hydroelectric plants.

The Sixth Five Year Plan (1987–92) was the first to allot power generation projects a significant portion of the national budget (13.1 percent). At Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...

9.5 billion, the sixth plan was considerably more expensive than its predecessors. The goals included strengthening Bhutan's self-reliance, as it was hoped that Bhutan would begin exploiting markets in neighboring countries with manufacturing, mining, and hydroelectric projects. Faced with rising costs, Bhutan postponed some projects requiring large inputs of capital until the Seventh Development Plan (1992–96), which presented no major changes in overall sectoral development.

The first major expansion of hydroelectric facilities started in 1975 on the Wang Chhu between Thimphu
Thimphu
Thimphu also spelt Thimpu, is the capital and largest city of Bhutan. It is situated in the western central part of Bhutan and the surrounding valley is one of Bhutan's dzongkhags, the Thimphu District. The city became the capital of Bhutan in 1961...

 and Phuntsholing
Phuntsholing
Phuentsholing is a border town in southern Bhutan, and is the administrative seat of Chukha District. The town occupies parts of both Phuentsholing Gewog and Sampheling Gewog. Phuentsholing lies opposite the Indian town of Jaigaon, and cross-border trade has resulted in a thriving local economy...

. Known as the Chukha Hydel Project, it helped boost the nation's fledgling industrial development. The 336-megawatt Chukha Hydropower Station came on line in 1986 and was synchronized with the Indian grid that same year, and additional capacity became available in 1988. The Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...

2.44 billion Chukha project was 60 percent paid for by India and budgeted outside the normal development plan process. It was planned that Bhutan would sell at low cost all excess power to West Bengal
West Bengal
West Bengal is a state in the eastern region of India and is the nation's fourth-most populous. It is also the seventh-most populous sub-national entity in the world, with over 91 million inhabitants. A major agricultural producer, West Bengal is the sixth-largest contributor to India's GDP...

. At the same cost, Bhutan also hoped to reimport some of that power through the Indian power grid into southern districts. The Chukha project was important not only because it supplied electric power to western and southern districts but also because it provided a major source of income for the government. In 1981 Bhutan generated 22 million kilowatt-hours of energy from hydroelectric sources. The project's gross annual income was projected at Nu
Bhutanese ngultrum
The ngultrum has been the currency of Bhutan since 1974. It is subdivided into 100 chhertum .-History:In 1974, the ngultrum was introduced, replacing the rupee at par...

380 million in 1989. Another major plant in southwest Bhutan — the 18,000-kilowatt Jaldhaka hydroelectric plant — furnished electricity locally and exported the balance to India's West Bengal. In 1989 nearly 95 percent of Bhutan's government-installed power generation — a total of 355 megawatts — was supplied by Chukha, and a total of some 20 principal towns and 170 villages had been electrified. By 1990 Thimphu's commercial district had an underground cable system for its power supply.

By 1991, besides the Chukha project, government installations included seven minihydroelectric plants, each averaging 7,350 kilowatt capacity; twelve microhydroelectric plants, each averaging 340 kilowatts capacity; and eight diesel-powered generation stations
Diesel generator
A diesel generator is the combination of a diesel engine with an electrical generator to generate electrical energy....

, each averaging 6,000 kilowatts capacity. Because domestic consumption was low (just over 16 megawatts, more than 80 percent of which was consumed by industry), ample power was exported to India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

. The project not only halved domestic electricity costs, but also generated revenues from electricity sold to India nearly equal to the total government revenue from all domestic sources. Smaller enterprises, such as the 1.5-megawatt Gyetsha Mini-Hydel, which was inaugurated in 1989, brought badly needed power to Bumthang
Bumthang District
Bumthang District is one of the 20 dzongkhag comprising Bhutan. It is the most historic dzongkhag if the number of ancient temples and sacred sites is counted...

. Another major plant, a proposed 60-megawatt plant at Kurichu in eastern Bhutan, was included in the Sixth Development Plan (1987–92).

Other sources of energy included biogas
Biogas
Biogas typically refers to a gas produced by the biological breakdown of organic matter in the absence of oxygen. Organic waste such as dead plant and animal material, animal dung, and kitchen waste can be converted into a gaseous fuel called biogas...

, used in some districts
Districts of Bhutan
Bhutan comprises twenty districts .-Districts:-District Statistics:The results of the 2005 census appear below:...

 for lighting and cooking and primarily generated from cow dung
Cow dung
Cow dung is the waste product of bovine animal species. These species include domestic cattle , bison , yak and water buffalo. Cow dung is the undigested residue of plant matter which has passed through the animal's gut. The resultant faecal matter is rich in minerals...

. Solar energy was used for a variety of purposes, including heating dwellings and greenhouses and lighting hospitals. Despite the potential solar energy that might be produced, Bhutan's mountainous terrain prevents maximum use. The same mountains are funnels for powerful winds, however, providing another viable renewable energy source. High-technology windmills were installed in Wangude Phodrang in 1987 to produce electricity to run irrigation pumps.

Still another source of fuel in the 1980s was firewood
Firewood
Firewood is any wood-like material that is gathered and used for fuel. Generally, firewood is not highly processed and is in some sort of recognizable log or branch form....

. Although Bhutanese had greater access to electric power than they had had previously, traditional methods of cooking and heating required readily available fuel. In the mid-1980s, Bhutan produced a coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...

equivalent of 982,000 tons of fuelwood per year to meet domestic needs. Coal itself was available in reserve in some 1.3 million tons, but recovery was difficult and the quality was poor.
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