Bhutan : Promoting Energy Security and Transition Project

Sovereign Project | 56163-001

The knowledge and support technical assistance (TA) aims to help Bhutan diversify renewable sources and promote energy transition to more resilient energy systems with novel technologies, new approaches, and concrete strategies. Bhutan's energy is dependent on mono-resource of hydropower, export revenues of which sustain the national economy and the government's revenues. This suggests that Bhutan is vulnerable to any impacts on hydropower resources due to climate change. To alleviate concerns on energy security and aftereffects, it is necessary to push for the diversification of energy resources. Hence, the TA will support the development of schemes for rooftop solar and floating solar, and the relevant knowledge enhancement among the stakeholders. The studies will assess the resource and technical design requirements, viability, business models, safeguards, and relevant regulation and policy formation on alternative energy resources.

Project Details

Project Name
Promoting Energy Security and Transition Project
Project Number
56163-001
Country / Economy
  • Bhutan
Project Status
Active
Project Type / Modality of Assistance
  • Technical Assistance
Source of Funding / Amount
TA 10008-BHU: Promoting Energy Security and Transition Project
Source Amount
Technical Assistance Special Fund US$ 1.00 million
Operational Priorities
  • OP2: Accelerating progress in gender equality
  • OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
  • OP6: Strengthening governance and institutional capacity
Sector / Subsector
  • Energy / Renewable energy generation - solar

Gender
Some gender elements
Description
The knowledge and support technical assistance (TA) aims to help Bhutan diversify renewable sources and promote energy transition to more resilient energy systems with novel technologies, new approaches, and concrete strategies. Bhutan's energy is dependent on mono-resource of hydropower, export revenues of which sustain the national economy and the government's revenues. This suggests that Bhutan is vulnerable to any impacts on hydropower resources due to climate change. To alleviate concerns on energy security and aftereffects, it is necessary to push for the diversification of energy resources. Hence, the TA will support the development of schemes for rooftop solar and floating solar, and the relevant knowledge enhancement among the stakeholders. The studies will assess the resource and technical design requirements, viability, business models, safeguards, and relevant regulation and policy formation on alternative energy resources.
Project Rationale and Linkage to Country/Regional Strategy

Climate and energy security. Bhutan's key economic drivers are hydropower export, tourism, and agriculture. Although the tourism business was significantly affected by the coronavirus disease (COVID-19) pandemic, hydropower exports have relatively been stable and the resultant foreign currency earning has been sustained. However, hydropower generation is dependent on the availability of water resources, which can be varied by weather and climatic conditions. This means that Bhutan's high dependency on hydropower (99.7%) renders the country vulnerable to climate change impacts, thereby raising energy security concerns.

Energy diversification. On concerns about climate and energy security, the government intends to diversify energy sources to improve energy independence. Bhutan's Sustainable Hydropower Development Policy, 2021 stipulates to enhance energy security and develop value chains based on alternative clean energy. Renewable energy technologies such as solar and wind power have different generation profiles and patterns during the year and daytime, which can be complementary in a mix of power sources with hydropower. Thus, Bhutan's Druk Green Power Corporation (DGPC) plans to fast-track solar development up to 200 MW over the next 3 years. For this purpose, ADB intends to finance Bhutan's first utility-scale solar photovoltaic power plant (17 MW), and support subsequent ground-mounted solar power projects in several locations. Solar power will compensate for power deficits in the dry season and increase hydropower export in the wet season by using additional solar power for domestic consumption. Given this advantage, solar power generation can be promoted and diversified further from ground-mounted solar photovoltaic power type to floating solar and rooftop solar power types.

Especially, Bhutan's floating solar power in the existing hydropower reservoir areas can bring multiple favorable conditions, including higher solar panel efficiency due to cooling effect on the water surface, no land acquisition requirement and conflict with fishing purposes, close access to grid systems within the premise of the hydropower stations, and complementary operations with hydropower's flexible generation. Rooftop solar can also be expanded in urban areas on the rooftops of buildings and houses for various applications such as electricity and water heating as well as cooking. Given the nascent stage of solar power development in Bhutan, this new technological and business areas can be demonstrated by the public sector to gradually boost private sector mobilization and create new job opportunities, particularly for women for operations and maintenance activities. The alternative domestic energy resources will help Bhutan promote energy transition and improve energy security.

Impact

Bhutan's diversification of clean energy sources promoted.

Project Outcome

Description of Outcome

Readiness for project development in alternative energy resources enhanced.

Progress Toward Outcome

Implementation Progress

Description of Project Outputs

Floating solar development plans prepared

Rooftop solar business and financing models developed

Floating and rooftop solar knowledge sharing and awareness improvement among stakeholders promoted

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Nation-wide

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation, and Consultation

During Project Design
During Project Implementation

Business Opportunities

Consulting Services
ADB will engage consultants following the ADB Procurement Policy (2017, as amended from time to time) and its associated project administration instructions and/or staff instructions. The TA will require a consultancy contract with a firm, association, or joint venture, recruited through a simplified technical proposal and quality- and cost-based selection method with a qualitycost ratio of 90:10. An output-based contract will be considered.

Contact

Responsible ADB Officer
Ogino, Kaoru
Responsible ADB Department
Sectors Group
Responsible ADB Division
Energy Sector Office (SG-ENE)
Executing Agencies
Department of Energy
Ministry of Economic Affairs

Timetable

Concept Clearance
20 Sep 2022
Fact Finding
12 Oct 2022 to 14 Oct 2022
MRM
-
Approval
05 Dec 2022
Last Review Mission
-
Last PDS Update
06 Dec 2022

Funding

TA 10008-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Dec 2022 28 Dec 2022 28 Dec 2022 31 Jan 2026 - -
Financing Plan/TA Utilization
ADB Cofinancing Counterpart Total
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 0.00 0.00 0.00 0.00 1,000,000.00
Cumulative Disbursements
Date Amount
09 Sep 2023 307,433.35

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.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title Document Type Document Date
Promoting Energy Security and Transition Project: Technical Assistance Letter Technical Assistance Letter Dec 2022
Promoting Energy Security and Transition Project: Technical Assistance Report Technical Assistance Reports Dec 2022

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
CONSULTING FIRM Firm - Consulting Closed

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.