Bhutan’s primary energy is dominated by renewables which account for 82% of total supply. Hydropower constitutes 100% of Bhutan’s power generation,6 but the current hydro capacity has reached only 10% (2.3 GW) of its total potential of 23 GW. Bhutan’s existing hydropower projects are primarily developed with international support, mainly from India. To reach the full potential of this energy source, the Bhutanese government recently launched the Sustainable Hydropower Development Policy.
Even though Bhutan’s energy demand met through hydro power, studies recommend the Bhutanese government to diversify the renewable energy supply to support economic growth, industrial development and employment. Diversification would also enable Bhutan to reduce the risk of relying on a single energy source, particularly during winter when water levels in reservoirs drop.
In its second NDC, the government communicated its intent to install 71.11 MW capacity of utility scale solar and 23 MW of wind energy between 2020–2028. Bhutan is planning to ramp up solar capacity installations with a vision of adding 300 MW in the next two years, with support from the Asian Development Bank (ADB). The initial process of site identification for the projects has started.
Within the energy sector, the Bhutanese government has initiated several policies to incentivise the electrification of the end-use sectors, such as the Bhutan Electric Vehicle Roadmap (2020–2025), and Low Emissions Development Strategy (LEDS) for Surface Transport. The high share of private vehicle use is an important concern. To address that, the LEDS for Surface Transport outlines measures like increasing shared mobility, the promotion of non-motorised vehicle use, an annual cap on vehicle import and sales, and expanding rapid mass transit.
Bhutan is also considering the viability of renewable hydrogen fuel and the government has initiated the preparation of the Green Hydrogen Roadmap and pilot projects.