Chukha Hydropower Project

The Chukha Hydropower Project (also written Chhukha or Chukha-I) is a 336 megawatt run-of-the-river hydroelectric station on the Wangchhu river in Chukha dzongkhag in western Bhutan. It was commissioned in stages between 1986 and 1988 and was the first large-scale hydropower facility built in the country. Construction was financed and executed by the Government of India under an inter-governmental agreement signed in 1974, on terms of a 60 percent grant and 40 percent concessional loan.^[1]

The plant transformed the Bhutanese economy. Within a decade of commissioning, electricity exports to India had become the single largest source of government revenue, eclipsing receipts from agriculture, forestry and tourism. Reliable power from Chukha enabled the establishment of energy-intensive industries in Pasakha and Phuentsholing — including ferro-alloys, calcium carbide, cement and food processing — and underpinned the gradual electrification of western Bhutan.

Chukha is operated by Druk Green Power Corporation, the state-owned generator that took over the asset from the Chukha Hydel Project Authority in 2008. The Royal Government of Bhutan assumed full ownership of the plant on completion of the loan repayment in the early 1990s, ahead of the original schedule.^[2]

Origins and design

The Chukha project was conceived under the Third King, Jigme Dorji Wangchuck, who saw hydropower as a potential cornerstone of Bhutan's revenue base. The bilateral agreement formalising Indian assistance was signed in March 1974 between the Royal Government of Bhutan and the Government of India. Detailed surveys and the project report were prepared by India's Central Water Commission, and main civil works began in 1979 under the Chukha Hydel Project Authority, a body jointly staffed by Bhutanese and Indian officials.^[3]

The scheme is a run-of-the-river design with a small diversion dam at Chimakothi and an underground powerhouse near Chukha town. Water from the Wangchhu is diverted through a 6.5 km headrace tunnel and drops some 437 metres to four 84 MW turbine-generator units of Russian and Indian manufacture. Because the design relies on river flow rather than a large storage reservoir, generation falls during the dry winter months, when output can drop to roughly a third of the rated capacity.

Construction and commissioning

Construction proceeded through the early 1980s in difficult terrain along the Wangchhu gorge. The first unit was synchronised with the Indian grid in 1986, and the remaining three units were progressively brought on line through 1987 and 1988, bringing total installed capacity to 336 MW. Commissioning coincided with the early reign of the Fourth King, Jigme Singye Wangchuck, and was widely characterised in contemporary Bhutanese policy documents as a turning point in the kingdom's development.

An associated 220 kV transmission corridor was built from Chukha to Birpara in West Bengal to evacuate surplus power into the Eastern Regional grid of India. A separate domestic distribution network linked the plant to Phuentsholing, Thimphu and Paro.

Power purchase agreement and tariffs

Power generated at Chukha that is surplus to Bhutan's domestic needs is sold to India under a long-term power purchase agreement. The original tariff, fixed at the time of commissioning in 1986, was set at Nu 0.13 per kWh for secondary energy and Nu 0.26 per kWh for firm energy. The two rates were later unified at Nu 0.26 in 1990 and revised upward to Nu 0.37 in 1993.^[4] Subsequent revisions in 1997, 2002, 2009 and 2017 brought the tariff to Rs 2.55 per unit by January 2017.

The tariff arrangement has periodically been a source of negotiation between Thimphu and New Delhi. A 2009 dispute over the timing and quantum of revision delayed agreement for several years, and the Bhutanese press, including Kuensel and The Bhutanese, has reported recurring concerns that revision intervals have lengthened and that the rate has not kept pace with regional power market prices.^[5] Indian government statements describe the agreement as mutually beneficial and point to reciprocal benefits including transmission infrastructure and grid integration.

Economic impact and current status

For most of the 1990s and 2000s, Chukha alone accounted for around 40 percent of Bhutan's national revenue and a similar share of export earnings. Although newer plants — Kurichhu (60 MW, 2002), Basochhu (64 MW, 2005), Tala (1,020 MW, 2007), Mangdechhu (720 MW, 2019), and the gradually commissioning Punatsangchhu-II — have since reduced its proportional contribution, Chukha remains a benchmark project in Bhutanese energy policy and the basis on which the country's hydropower model with India was scaled.

The plant has undergone periodic refurbishment. Bharat Heavy Electricals Limited (BHEL) of India completed a rehabilitation of two of the four units in the late 2010s, replacing turbine runners and generator components. Druk Green continues to operate the station as part of its portfolio of Bhutanese hydropower assets.^[6]

References

1. Chhukha Hydropower Plant — Druk Green Power Corporation
2. Hydroelectric Projects — Embassy of India, Thimphu
3. Hydropower – Key to sustainable, socio-economic development of Bhutan — UN/Royal Government of Bhutan paper
4. Chukha export tariff revised by 30 Cheltrum a unit — Kuensel
5. India agrees to trilateral MoU on hydropower, Chukha tariff revision — The Bhutanese
6. BHEL completes rehab of two units at 336 MW Chhukha — Renewable Energy World
7. Bhutan Hydropower Sector Study — World Bank/ESMAP