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Bhutan Procures Power From Indian Exchange

SAREP has been engaging with Bhutan stakeholders, viz. Druk Green Power Corporation (DGPC) since October 2021, on short-term power sourcing requirements for the country. Based on the SAREP’s interactions with Bhutan power sector stakeholders, it was understood that, in the upcoming lean season of electricity generation (viz. Jan – Mar 2022), Tala hydroelectric plant (HEP) would be undergoing maintenance, which would create need for Bhutan to source electricity from the Indian power market for meeting its domestic electricity demand. Due to the lean period and maintenance of the 1,020-MW Tala HEP, Bhutan was foreseen to be facing deficit of 389 MUs during the period from January to March 2022.

Bhutan approached India with the proposal of banking of electricity. The idea was that excess energy in the summer months to the extent required that could meet the shortfall in lean months (December to April), could be banked with an Indian entity. The energy will be then imported in lean months at a constant demand (in MW), variations of which would be managed by local HEPs.

The SAREP team made a detailed assessment of the situation, in consultation with key Indian stakeholders and concluded that the prevailing procedure for approval and facilitating import/export (cross border) of electricity published by Designated Authority (i.e., Member- Power System, Central Electricity Authority, India), does not provide the mechanism of electricity banking with Indian entities. However, the procedure defines the process for sourcing power from power exchanges of India and through short term bi-lateral mode, which could be explored by Bhutan for its immediate electricity needs.

Subsequent to this, and based on the need of Bhutanese stakeholders, SAREP provided a 2-day training program on power exchange participation tailored for the needs of stakeholders from 23-24 December, 2021. This provided an overview of the Indian power exchange with hands-on training on operational aspects, to facilitate participation of the Bhutanese stakeholders on the exchange.

Starting January 1, 2022, Bhutan started procuring electricity through India’s Day Ahead Market (DAM), to purchase power to meet its requirement during the dry season. Trading was undertaken through DGPC.

DGPC requested USAID for handholding support to facilitate their participation on the Indian Energy Exchange. USAID, through SAREP, immediately deployed three technical experts to provide advisory and handholding support. Through its technical assistance, SAREP conducted a total of 42 sessions to support DGPC, DGET, DHPS, BPC, BPSO, BEA. Handholding was focused on bid optimization, reservoir analysis and deviation management. This support enabled Bhutan to import 240 million units (MUs) of electricity from the Indian power exchange from January 1, 2022 to March 16, 2022.

Through this exercise, SAREP was able to provide guidance and help in resolving the day to day issues that arose during scheduling, bidding and import of power through daily interactions at critical periods of preparation for the day-ahead scheduling and at the time of placement of bids. SAREP was also able to help in the optimization of Bhutan’s operating hydropower plants and rescheduling of generation export during exigencies like domestic load outages and unforeseen fluctuations in river discharges.

Through its technical assistance, SAREP played a strategic and transformative role by enabling Bhutan to participate in the day-ahead spot market for the first time. This ensured market-linked competitive procurement of energy by Bhutan, helping it avoid blackouts and brownouts. SAREP’s involvement enabled Bhutan to optimize its procurement strategy.

Through its ongoing technical assistance, SAREP will be working closely with Bhutan stakeholders to develop the scope for strengthening existing hydrology forecasting and inflow measurement system in the country. As Bhutan is considering participating in power sale transactions on the exchange, accuracy of power generation forecasts become extremely critical.