Tariffs from new hydropower projects expected to be higher

2026-03-30 - 13:21

Electricity tariffs from the upcoming Yungichhu and Burgangchhu hydropower projects are expected to be higher than Bhutan’s older large hydropower plants, reflecting the relatively higher construction costs per megawatt and smaller project sizes. However, the tariffs are likely to remain comparable to those of newer hydropower developments. According to the Ministry of Energy and Natural Resources (MoENR), this is largely due to the higher construction cost per megawatt associated with smaller projects, as well as differences in project size and financing structures. However, their tariffs are likely to remain comparable to those of newer hydropower developments. The Yungichhu Hydropower Project in Lhuentse and the Burgangchhu hydropower Project in Zhemgang are scheduled to be commissioned in March and April respectively. As of February 2026, the Yungichhu Hydropower Project has reached an advanced stage of implementation, with overall physical progress recorded at 98.72 percent. On 10th March, water filling of the water conductor system began. This process is expected to take about five to six days, after which wet testing and commissioning activities will follow. The first generating unit is scheduled to be commissioned in March 2026, followed by the second generating unit in April 2026. Similarly, the Burgangchhu Hydropower Project is also approaching completion, having achieved 97.05 percent physical progress as of February 2026. Water filling for the project is planned for March 2026. Once filling and subsequent testing procedures are completed, the project is targeted for commissioning in April 2026. According to the MoENR, tariffs for electricity generated from both projects will be determined only after their completion. The rates will be calculated and submitted to the regulatory authority for approval, in line with standard procedures. MoENR stated that the electricity generated from both projects will primarily be used to meet domestic demand, particularly during the lean season when energy shortages are more pronounced. Any surplus generation will be exported, mainly to India. While domestic tariffs will be determined by the national regulator, export tariffs will be guided by prevailing market rates in the Indian power market.