ADB is helping Bhutan reach its target of providing electricity to all rural households. The project will connect households to on-grid electricity supplies sourced from hydropower. Homes in remote areas that cannot be readily connected to the grid will get solar power packs. The project will also help establish pilot wind power and biogas production plants.
|Project Name||Rural Renewable Energy Development Project|
|Project Type / Modality of Assistance||Grant
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Partnerships
Private sector development
|Sector / Subsector||
Energy - Electricity transmission and distribution - Renewable energy generation - biomass and waste - Renewable energy generation - solar - Renewable energy generation - wind
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
|Description||The Rural Renewable Energy Development Project (the Project) will help Bhutan (i) expand rural electrification for all households, and (ii) sustain its operations and energy security, through a mix of clean energy supply sourced from hydropower, solar, wind, and biogas. The Project has four components: (i) on-grid rural electrification (RE), (ii) off-grid solar RE, (iii) establishment and grid-connection of pilot wind power generation mills, and (iv) a pilot program to promote biogas plants. The project areas are scattered throughout the country and the executing agency will be the Department of Energy, Ministry of Economic Affairs.|
|Project Rationale and Linkage to Country/Regional Strategy||
In Bhutan, domestic demand for electricity has been growing by 17% per year on average over these 5 years. This demand growth is expected to escalate in the long run due to the increase in the number of new customers connecting as ongoing rural electrification is completed. Experiences with rural electrification indicate that overall electricity consumption will increase as rural economies develop and households increasingly rely on electricity and acquire new appliances. Bhutan has already experienced power shortages, particularly in the dry winter periods when hydropower generation is reduced due to low river flows. Despite the nation's annual net power surplus, Bhutan's power generation from run-of-the-river hydropower plants is very seasonal, as the water flows and levels are difficult to control in the dry season. Consequently, the existing generation systems have been unable to meet the recent fast-growing demand during the dry winter peak periods. In the last two winters, the BPC has been forced to limit power supply to industry, resulting in economic and revenue losses. In the 2010 winter, it is estimated that the power generation shortfall against the growing demand will be around 25 MW, which will have significant impacts on industry's production. The Druk Green Power Corporation (a state-owned generation company) also reported that levels of water flow in rivers had been declining in the past 2 years due to changes of monsoon patterns, leading to less hydropower production. Increased power imports from India would not be feasible due to more severe power deficits on the Indian side.
To improve national energy security, the DOE intends to issue the Renewable Energy Policy that aims to promote alternative renewable energy sources other than large hydropower, and diversify the energy supply base through wind, solar, biomass, and small and micro hydropower. Based on wind mapping data and subsequent surveys, the pilot wind power mills are designed to support this objective. Since wider rural electrification coverage is expected to make the domestic demand supply balance even tighter, additional alternative energy sources will need to be developed to meet the country's demand without reducing exports of surplus power and its revenue-earning opportunity. It will be an option to export additional power from renewable energy to neighboring countries if there is surplus power in the future.
|Impact||Sustained inclusive economic growth through reliable and affordable clean energy services|
|Description of Outcome||Expanded coverage and mix of clean energy supply in a sustainable manner|
|Progress Toward Outcome||--Ongoing|
|Description of Project Outputs||
On-grid rural electrification sourced from hydropower, and its related skill training and livelihood improvement activities
Off-grid rural electrification sourced from solar power, and its related skill training and livelihood improvement activities
Wind power generation plants
Domestic biogas plants
|Status of Implementation Progress (Outputs, Activities, and Issues)||
(i) The on-grid rural electrification subproject has been in good progress, and Bhutan has already achieved 98% of electrification of the whole country. BPC had connected 5,851 households as of Aug 2016 covering the 6 districts, which is beyond the original target of 5,075 households. Contract for the construction of distribution line was signed in Apr 2015 and the work is expected to be completed early 2017.
(ii) The off-grid rural electrification subproject has installed 984 solar home lighting systems. 1,132 sets of old solar home systems have been rehabilitated. Original target of new installation was 1,896 but demand was less due to peoples preference to grid connected electricity. 110 Village Electrical Entrepreneur and Electrical Technicians (VEEETs) including 18 women have been working under supervision of Bhutan Power Corporation (BPC) for operations and maintenance in both remote on-grid and off-grid areas.
(iii) Wind Power Generation: 600kW (300kW x 2) Pilot Wind Power Plant was installed at Rubesa in Wangdue and commissioned in Jan 2016.
(iv) Bhutan Biogas Project (BBP) has been implemented quite smoothly and around 3,192 bio gas plants in 13 districts were constructed as of Oct 2016. Original target was 1,600 and the EA/IAs has decided to increase the target to 4,600 by the end of 2017 given its fair demand, by utilizing savings from off-grid component.
|Summary of Environmental and Social Aspects|
|Environmental Aspects||The initial environmental examination and the resettlement plan were prepared following ADB's Safeguard Policy Statement (2009) and the government's related guidelines, policies, and legislation.|
|Involuntary Resettlement||The initial environmental examination and the resettlement plan were prepared following ADB's Safeguard Policy Statement (2009) and the government's related guidelines, policies, and legislation.|
|Indigenous Peoples||No indigenous peoples impact is expected as there is no indigenous peoples group in the project areas.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||Project stakeholders and affected people have been consulted throughout the project design and planning phases.|
|During Project Implementation||The consultation will be continued throughout the implementation phase as required by the Safeguard Policy Statement 2009.|
|Consulting Services||Consulting Services yet to be determined|
|Responsible ADB Officer||Kobayashi, Hiroki|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Energy Division, SARD|
Department of Energy
|Approval||29 Oct 2010|
|Last Review Mission||-|
|PDS Creation Date||07 Oct 2010|
|Last PDS Update||08 Mar 2017|
|Approval||Signing Date||Effectivity Date||Closing|
|29 Oct 2010||13 Dec 2010||22 Mar 2011||31 Dec 2015||31 Dec 2017||-|
|Financing Plan||Grant Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||24.91||Cumulative Contract Awards|
|ADB||21.59||29 Oct 2010||21.36||0.00||99%|
|Cofinancing||0.00||29 Oct 2010||19.98||0.00||93%|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
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None currently available.
|Title||Document Type||Document Date|
|Maximizing Access to Energy for the Poor in Developing Asia||Brochures and Flyers||Dec 2013|
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