Bhutan King’s Visit to Dhaka: Bolstering Energy Cooperation

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The visit of King Wangchuck and Queen Jetsun Pema to Dhaka in March coincided with Bangladesh’s Independence Day celebrations, during which they were warmly welcomed by President Mohammed Shahabuddin upon their arrival at the airport. In a meeting with King Jigme Khesar Namgyel Wangchuck, Bangladesh’s Foreign Minister Hasan Mahmud expressed Bangladesh’s interest in importing electricity from Bhutan, mentioning ongoing discussions about the potential import of hydropower from Bhutan and the anticipated cooperation of India in the process. Minister Mahmud made these remarks following a courtesy call with HE Wangchuck at a hotel in Dhaka on March 25, 2024.

Previously, during the state visit of Bangladeshi Prime Minister Sheikh Hasina to India in September 2022, the Prime Minister of India Narendra Modi agreed to facilitate the import of electricity to Bangladesh through India. Trilateral discussion among Bhutan, Bangladesh, and India, is underway. Bangladesh planned in 2023 to import around 1,500MW of electricity from Bhutan initially. An initiative has been launched to import hydroelectric power from Bhutan. A Tripartite Memorandum of Understanding (MoU) is in its final stages of development between Bangladesh, India, and Bhutan. This agreement aims to facilitate the joint investment for the construction of a power plant.

Bhutan had an installed capacity of 2,335MW, representing 7 percent of the country’s total hydropower potential. In 2021, the total generation amounted to 11,059GWh, with 73.9 percent or 8,178.38GWh exported to India. At the time, three hydropower projects – Puna-I, Puna-II, and Nikachhu – were underway, with expectations for their commissioning by July 2028, December 2024, and December 2023, respectively. Similarly, three mini hydropower projects – Burgangchhu (54MW), Yungichhu (32MW), and Suchhu (18MW) – were scheduled for commissioning by December 2024, March 2025, and July 2024, respectively, according to the government’s plans.

To comprehend the characteristics of importing energy from Bhutan, it is essential to grasp the nature of energy cooperation between India and Bhutan. The energy collaboration between these two nations is deeply rooted in a longstanding and mutually beneficial partnership, primarily centered around hydroelectric power.

The direction of electricity exchange between India and Bhutan varies according to the season. In the summer, Bhutan exports electricity to India, while in the winter, Bhutan imports electricity from India. Particularly during the wet season, there is a significant volume of electricity traded between India and Bhutan. The monsoon season, characterized by increased water levels in Bhutan, results in heightened electricity flows, notably during the months of June, July, and August. However, from August to December, there is a gradual decline in electricity trade due to the onset of winter. Bhutan experiences drier winters with reduced average rainfall and higher electricity demand for heating purposes. Over the years, exports from Bhutan have seen a notable increase, rising from 1,460.5 GWh in 2000 to 6,182.5 GWh in 2019. Simultaneously, there has been a consistent rise in imports from Bhutan by India, attributed to Bhutan’s substantial hydropower energy production. India’s investment in numerous hydropower plants in Bhutan aims to access low-cost renewable electricity available in the country, yielding mutual benefits for both nations.

Bhutan and India are linked through five distinct transmission lines, functioning across two regions within India: the Northeastern region and the Eastern region. The transmission lines facilitating connection with the Eastern Region (ER) include the 400kV Mangdechhu-Alipurduar 1&2 lines. Bhutan is also connected to the northeastern region (NER) of India through the 132KV-Geylegphu – Salakati and 132kV Motanga-Rangia transmission lines. As previously mentioned, Bhutan primarily exports electricity to India, maintaining a net exporter status.

The existing infrastructure between Bhutan and India lays a solid foundation for facilitating energy importation from Bhutan to Bangladesh. With well-established transmission lines and interconnected grids between Bhutan and India, the physical framework for energy exchange is already in place. This infrastructure not only enables Bhutan to export surplus hydroelectric power to India but also provides a conduit for extending the energy trade network to neighboring countries like Bangladesh. The geographical proximity of Bhutan to Bangladesh’s borders simplifies the task of building connectivity infrastructure for energy importation. Given the short distance between Bhutan and Bangladesh, the construction of transmission lines and other necessary infrastructure becomes more feasible and cost-effective. This proximity minimizes transmission losses and enhances the efficiency of energy transfer between the two countries.

The timing of energy trade plays a pivotal role in facilitating and maximizing its benefits, particularly in the context of Bangladesh’s electricity demand dynamics. Throughout the year, Bangladesh experiences seasonal variations in electricity demand, with fluctuations occurring notably during the winter and summer months, and peaking during the monsoon season. During the winter, there is a marginal decrease in electricity demand in Bangladesh. However, as temperatures rise during the summer months, accompanied by increased usage of cooling appliances, the demand for electricity surges. This demand reaches its zenith during the monsoon season, driven by various factors including agricultural needs and increased domestic consumption. This seasonal fluctuation in electricity demand presents a unique opportunity for countries like Bhutan and Nepal, where electricity generation peaks align with the monsoon season due to ample water availability for hydropower generation. The synchronization of peak generation in Bhutan and Nepal with Bangladesh’s peak demand periods creates a conducive environment for energy trade between these nations. Adopting a multi-country, market-based approach to electrical energy trade holds the key to unlocking the full potential of energy resources in the BBIN region. By leveraging the complementary seasonal generation patterns and optimizing the utilization of generation resources across Bhutan, Nepal, India, and Bangladesh, this approach can effectively address the annual hourly demands of these countries.

Meanwhile, State Minister for Power, Energy, and Mineral Resources, Nasrul Hamid, articulated on Monday 4, 2024, that Bangladesh and India possess significant opportunities for collaborative efforts in advancing the power and energy sector. During a meeting with the Indian High Commissioner to Bangladesh, Pranay Verma, at his ministry office, Minister Hamid disclosed plans to import 9,000MW of electricity from neighboring countries, with progress made in the endeavor to import hydroelectricity from Nepal and Bhutan. He further communicated that a forthcoming deal is expected to be formalized in the coming month for the import of 40MW of hydropower from Nepal. Negotiations for the import of 500MW of electricity from Nepal through the Indian company GMR are in their final stages, alongside ongoing efforts towards importing renewable energy. Discussions regarding import and export from Meghalaya, Tripura, or Assam were also mentioned.

Hamid emphasized the nearing finalization of processes concerning the importation of LNG and gas through H-Energy, underscoring Bangladesh’s eagerness to enhance connectivity with neighboring countries, particularly India, and seeking cooperation from India in this endeavor. He stressed the importance of establishing a dedicated transmission line from Nepal to Bangladesh to bolster power trade, benefiting both nations. Hamid also proposed holding monthly stakeholder meetings to broaden the scope of cooperation, suggesting collaboration on bio-fuel initiatives. He highlighted the increasing demand for LPG and advocated for the active involvement of Bangladeshi private investors in India’s energy sectors. In response, the High Commissioner acknowledged the growing cooperation between India and Bangladesh in the power and energy sector, citing ongoing imports of hydropower from Nepal to Bangladesh and India’s importation of approximately 600MW of electricity from Nepal. Discussions during the meeting also encompassed topics such as high-voltage transmission lines, renewable energy, electricity import-export, R-LNG, capacity enhancement in fuel, energy efficiency, and prospects for future regional connectivity.

Therefore, India’s enthusiasm and commitment to supporting energy cooperation between Bangladesh and Bhutan are evident. As a key player in the region’s energy landscape, India recognizes the importance of fostering collaboration among neighboring countries to address energy challenges effectively. India’s willingness to facilitate energy trade between Bangladesh and Bhutan underscores its role as a reliable partner in promoting regional energy security and sustainability.

The initiative to import energy from Bhutan underscores a significant opportunity for Bangladesh to meet its growing energy demands in a feasible and sustainable manner. With Bangladesh’s energy consumption on the rise, exploring avenues for energy importation becomes imperative, and Bhutan presents a promising option given its substantial hydroelectric potential. Crucially, the geographical proximity of Bangladesh and Bhutan, coupled with their connection through India, enhances the feasibility of this energy trade arrangement. India’s willingness to facilitate and support this initiative further strengthens the prospects for regional energy security. By acting as a conduit for energy transmission between Bangladesh and Bhutan, India plays a pivotal role in fostering cooperation and collaboration among the nations in the region. The collaboration between Bangladesh, Bhutan, and India in the energy sector not only addresses the immediate energy needs of Bangladesh but also lays the groundwork for long-term regional energy security. By diversifying energy sources and promoting cross-border energy trade, this partnership contributes to the resilience and sustainability of the region’s energy infrastructure.

Such initiatives foster economic integration and cooperation among neighboring countries, paving the way for enhanced regional stability and prosperity. By leveraging each other’s strengths and resources, Bangladesh, Bhutan, and India can collectively address the challenges posed by energy scarcity and contribute to the overall socio-economic development of the region.

The intention to import energy from Bhutan signifies a strategic move towards ensuring energy security and sustainability for Bangladesh. With India’s support and collaboration, this initiative not only meets the immediate energy needs but also strengthens regional cooperation and promotes mutual prosperity. By working together, the three nations can build a resilient and interconnected energy ecosystem that benefits all stakeholders in the region.

– Syed Raiyan Amir is a Research Associate at the KRF Center for Bangladesh and Global Affairs (CBGA).

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