Renewable Energy Scenario in

Bhutan

28 September 2006

International Seminar on

Hydrogen Economy

Presentation Outline

� Country Background� Background of the Energy Sector

– Global trend– Bhutan – Development philosophy – Policies, priorities & targets

� Renewable Energy Sources� Emerging Issues, Challenges & Opportunities� Strategies for Intervention

Country Background

� Area – 38,000 sq. km� Population – 632,000� Rural – 436,000� Urban – 132,000

Background

� Bhutan has always realized the very close linkages between environment, economy and energy use.

� Follows the “middle path”� Preservation of her rich bio-diversity and the

environment has been enshrined in the constitution.

� One of the four pillars of the development philosophy of Gross National Happiness (GNH).

Background

0

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TV Rd Tel Mob Com

Facilities

Population Census 2005

VHVHVH

H HH

NHNHNH0

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Happiness Chart

Nation Rural Urban

Energy Sector – Bhutan

� Rich Hydropower resources– Developed with assistance from the GoI.

– Major revenue earner for the country

� Primary energy – Bio-mass – 1.2 million m^3 per annum consumption

– 1.9 m^3 per capita (Highest in the world)

� Imports fossil fuel– for heating & transportation

– Nets out the revenue from export of hydropower

Energy Scenario - Bhutan

Bhutan's National Energy Balance - FAO (EP/RAS/106/EF)

LPG

0.84%

Petrol

1.58%

Diesel

8.31%

Electricity

11.10%

Fuelwood

71.78%

Kerosene

1.62% Coal

4.77%

Energy Scenario in Bhutan

Use by population

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20000

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70000

80000

Elec Ker FW Solar LPG

Lighting

Cooking

Emerging Issues & Challenges (Global)� Non-sustainable

– Conventional Energy Production is not sustainable

– Increasing oil prices

– Oil reserves will be depleted

� Entrenches Poverty– 2 billion people do not have access to modern energy

services

– Entrenches poverty by limiting access to education, economic opportunity, and healthier livelihoods.

Emerging Issues & Challenges (Global)� Gender Equity

– Burden on Women’s time (for collecting fire wood)

– and related health hazards due to fuel wood burning

� Green house Gas Emission & Climate Change

– Fossil fuels and conventional energy increases green house gas emissions and expedites climate change.

Emerging Issues and Challenges (Global)

Why Renewable Energy?

� Utilizes locally available resources

� Reduce the need to import fossil fuels and enhances energy security

� Provides health benefits

� Contributes to rural development as they are modular in nature

� Contributes to achievement of Millennium Development Goals (MDGs)

� Environmentally beneficial as there are no SOXes and Noxes.

� Reduces climate change as there is no Co2 & methane emissions

Emerging Issues and Challenges (Global)

� Renewable energy has emerged as the energy source that is clean, sustainable and one that allows for ownership/partnership development amongst various stakeholders.

– Hydropower

– Solar

– Wind

– Geothermal

– Biomass

Emerging Issues and Challenges� Electricity for All by 2020

� Only 50% of the households have access to electricity (36% for rural households).

� Very high cost of grid extension ($2000.00 per households – need $100.00 million) & deforestation for right of ways.

� 3900 HH identified as off-grid

� To be electrified either through mini-micro or solar PV systems

� High capital cost for renewable technologies – 20-40 cents/unit of solar pv, 3-8 cents for hydro

Objective Tree for RGoB (Mewang

Gyaltshen- Thesis)

Goal tree for DoE

Goal tree for consumers

Assessment of renewable energy

resources

1. Mini/micro/picohydropower resources (favorable)

2. Solar Energy Resources

3. Wind Energy Resources

Technological Options1. Large Hydropower Plants

2. Mini/micro/pico hydropower plants

3. Solar PV systems

4. Wind energy systems

5. PV/Wind Hybrid systems

6. Biomass Energy Systems

7. Geothermal Energy systems

8. Solar Thermal Energy Systems

9. Tidal Energy Systems

10. Fuel Cell Energy systems

9FYP Programmes and Targets

� Micro Hydel (Chendebji & Sengor)

� Transmission Grid Extension to 6 districts

� RE of 15,000 HH

� Alternate energy Programme (solar, wind, biomass, energy efficiency & conservation, Integrated Energy Plan )

� Private Sector Participatory Program (dis-investment of projects, training village electricians etc).

� Develop major hydropower projects

9FYP DoE activities

� Resource Assessment

– Power System Master Plan Update

– Rural Electrification Master Plan (2005)

– Integrated Energy Management Master Plan (2007).

9FYP DoE activities

� CDM project initiated in Chendebji (70 kW). Handed over to the community.

� Dagachhu (108 MW) – PDD to KPC under CDM to be executed

� CFL lighting in Bumthang & Trongsa (DSM) was a huge success

� Pilot solar scheme in Getena village with community participation, partial cost contribution for 132 households.

� Pilot projects for improved efficient cooking and heating stoves.

Screening off technological options (Mewang)

Grade Score: 0=Irrelevant, 1=Miserable, 2=Mediocre, 3=Meddling, 4=Meritorious, 5=Marvelous

985376214Ranking for analysis

152032352728363934Total Score

004512554Data accessibility

024545555Relevance

224434455Technology accessibility

234433454Implementability

233433453Flexibility to upgrade

445454554Non pollutant

445554554Renewable based source

123433445Off-grid electrification

Tidal

Energy

System

Geothermal

Energy

System

Solar

Thermal

Energy

Solar/Wind

Hybrid

Power

Fuel Cell

Energy

Biomass

Energy

System

Wind

Power

system

Solar PV

Energy

System

Mini/Micr

o

Hydropow

er System

CRITERIA

TECHNOLOGY OPTIONS FOR OFF-GRID ELECTRIFICATION

Emerging Issues and Challenges� Lack of policy and regulatory framework for promoting

other renewable sources of sustainable energy.

� Lack of capacity at local level.

� Lack of awareness amongst the players on the benefits of using clean energy.

� Lack of resources and financing

� Lack of community participation and sense of ownership

Strategies for Intervention� Policy Intervention

� How to address the question of affordability for the rural poor who needs the real subsidy?

� How to involve local participation and a sense of ownership?

� Investment excise or other tax credits

� Tradable renewable energy certificates

� Energy production payments/tax credits

� Public investment, loans or financing

Intervention

� Technology initiatives

� Strategic public-private partnerships

� Knowledge dissemination, awareness campaign

� Common goals of poverty reduction and empowering of women

� Carbon trading mechanisms such as the CDM (project bundling and sharing of baselines).

Areas : Specific projects

� Solar PV Systems– How to make it affordable

– Share CDM benefits with funding partners

� Hydrogen fuel pilot projects

– Isolated micro hydels are not run to full capacity in Bhutan

– Increase plant load factor (increase efficient utilization)

� Wind Energy

– Wangdue & Punakha

� Energy plantation – bio fuel

– Community forestry

– Use of waste woods

Areas : Specific Projects

� Waste Management – Saw briquettes

– Sewerage bio-gas extraction project

� Promote rural income generation (textiles,handicrafts)

� Improving Access to Education

� Promote rural ICT (computers)

� Promote Adult Education

Hydrogen Economy for Bhutan

� No experiences till date

� But Bhutan has the right environment for hydrogen economy

� Currently have a case study to be funded by UNEP

� Transportation in Thimphu City is the most viable pilot project.

“A simple chemical reaction between hydrogen and oxygen generates energy, which can be used to power a car producing only water, not exhaust fumes. With a new national commitment, our scientists and engineers will overcome obstacles to taking these cars from laboratory to showroom so that the first car driven by a child born today could be powered by hydrogen, and pollution-free. Join me in this important innovation to make our air significantly cleaner, and our country much less dependent on foreign sources of energy."

— President Bush, State of the Union Address, January 28, 2003

CASE STUDY

MAN• MAN demonstrated a 12-meter, low-floor transit bus

powered by a 120 kW 400 V Siemens/KWU PEM fuel cell.

• Hydrogen is stored on the roof of the bus, holding a total volume of 1548 liters, which lasts over 250 km (156 miles).

• The bus was used in public transit service in late 2000 in the cities of Nurenberg and Erlangen.

• MAN demonstrated a second-generation of liquid hydrogen powered buses in 2001 in Berlin, Lisbon and Copenhagen.

Fear Factors

- The Hindenburg

Myth(1937)

- The Challenger

Space catastrophe(1986)

- Hydrogen Bomb

(Hiroshima & Nagasaki Nostalgia-1945)

Feasibility & Scope in Bhutan

1. We have abundant water resource (raw material for H2 fuel).

2. Bhutan generate electricity without depending on fossil fuels and they are run of river generation.

3. Electricity tariff in Bhutan is one of the cheapest in south East Asia.

4. Environmental protection is one of the pillars of GNH (60% of the land should remain covered with forest for all time to come).

5. There is 100% dependence of fossil fuels on India (All earnings from our hydropower are spent for oil import for transportation).

6. Many Mini/Micro hydels are under utilized in Bhutan (Excess in Chendebji is 40 kW,Sengor will be 50 kW etc).

7. Can be used for cooking and heating (Bhutan’s dependence on fuel wood is 66% )

Thank You

&

Tashi Delek