En­ergy quag­mire

Bhutan Times - - Editorial -

The E3 con­fer­ence or­ga­nized by the QED group for the last three days in the cap­i­tal saw a range of pre­sen­ta­tion on the plans for the gen­er­a­tion of 10,000 MW en­ergy by 2020. The en­ergy sec­tor in Bhutan has played a very im­por­tant role in the coun­try’s de­vel­op­ment in the last four decades. Start­ing with the com­mis­sion­ing of the 336 MW Ch­hukha Hy­dro­elec­tric Power Plant in 1986, Bhutan en­tered a pe­riod of steady growth and pros­per­ity for its cit­i­zens.

The coun­try to­day has an in­stalled ca­pac­ity of 1,500 MW, re­flect­ing a mere 5% of the es­ti­mated po­ten­tial ca­pac­ity of 30,000 MW. With plans to reach 11,000 MW by 2020, pri­mar­ily with as­sis­tance from the gov­ern­ment of In­dia, the Bhutanese econ­omy has be­gun to see an un­prece­dented in­flow of cap­i­tal and labour, and with it, some very real is­sues that have made us re­think our ap­proach to growth, de­vel­op­ment plan­ning, so­cial in­clu­sion, and en­vi­ron­men­tal con­ser­va­tion.

The E3 Con­fer­ence saw a plat­form for ex­perts, pol­i­cy­mak­ers, and business lead­ers to dis­cuss the many as­pects of de­vel­op­ing the en­ergy sec­tor: so­cial, cul­tural, eco­nomic, and en­vi­ron­men­tal. Given the en­ergy sec­tor’s es­sen­tial role in the Bhutanese econ­omy, and with plans un­der­way to gen­er­ate more than 10,000 MW of en­ergy by 2020, there is a need to un­der­stand its po­ten­tial im­pact on Bhutan’s fu­ture. The out­puts of the con­fer­ence will con­trib­ute to­wards out­lin­ing a road map for Bhutan as it moves to­wards a new era of eco­nomic pros­per­ity and promi­nence on the in­ter­na­tional stage.

In or­der to achieve 10, 000 MW by 2020 we have to de­vel­oped 12 new projects in the next six years in­ject­ing about 11.2B which is equiv­a­lent to the coun­try’s GDP ev­ery year till the tar­get is not achieved . This means an in­crease in the money sup­ply re­sult­ing in in­fla­tion which badly hits the lower sec­tion the so­ci­ety. Fur­ther this also means a de­crease in the ex­pen­di­ture for the so­cial sec­tors like health and ed­u­ca­tion.

On the other hand with in­crease in the un­em­ploy­ment rate it be­comes the re­spon­si­bil­ity of the state to pro­vide em­ploy­ment which will be dif­fi­cult to meet with­out in­vest­ment in the power sec­tor. In or­der to make the coun­try self re­liance huge in­vest­ment has to be made in power sec­tor for af­ford­able, ef­fi­cient and re­li­able power sup­ply for the in­vestors to come in.

As one of the pan­elists said the faster you want to do it, the lesser choice you have and fewer op­tions, which puts us in weak ne­go­ti­at­ing price. If so the hy­dro projects come up too fast may be lose what we may gain on the long run. But for now it is for the pol­icy mak­ers to de­cide and what fits best for our econ­omy.

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