Tata Power announces commissioning of Unit 1 of Dagachhu Hydro project in Bhutan

This project is in line with Tata Power’s commitment to commission 120 MW of new Hydro Power Project this year as part of the centenary year celebration theme of Invisible Goodness, and is the first cross border project registered under UNFCCC’s Clean Development Mechanism (CDM).

The Dagachhu project is a Joint Venture initiative between Tata Power (and Druk Green Power Corporation, owned by Royal Government of Bhutan (RGoB), and National Pension & Provident Fund  of Bhutan. With the commissioning of the project, Tata Power’s total hydro generation capacity today stands at 513 MW and overall capacity at 8684 MW.

The Dagachhu Project is 126 MW (2X63 MW) run of river hydro project located in Dagana Dzongkhag, Bhutan. The commercial flow of energy generated from the Dagachhu project to India officially started at 00:30 hours in the morning (Bhutan time) of Feb 21. The test run for the second unit of 63 MW will also be immediately started and expected to be completed soon.

DHPC has entered into a 25 year Power Purchase Agreement (PPA) with Tata Power Trading Company Limited (TPTCL, a company of Tata Power) for sale of power from the project. The power generated from the project shall be sold by TPTCL in the Indian power market.

Speaking on the occasion,  Anil Sardana, CEO and Managing Director, Tata Power, said, “We are delighted to announce the commissioning of the Dagachhu hydro project in Bhutan. Hydro power is an intrinsic part of our clean energy mix and we aim to develop new Hydro project of yet another 450 MW this year. We are committed to reducing our carbon footprint through the generation of 20-25 per cent of our total capacity through clean and renewable energy sources. We would like to thank the Royal Government of Bhutan, Druk Green Power Corporation, Ministry of External Affairs of Bhutan & India, Ministry of Power, GoI and all the stakeholders, for the support extended in setting up this project in Bhutan.”

Chhewang Rinzin, Chairman, DHPC, and Managing Director, DGPC, said, “The 126 MW Dagachhu project is the first hydroelectric project that has been successfully completed under a Bhutanese management. This is the first public private partnership project that showcased the very successful participation of Tata Power Company in Bhutan’s hydropower sector with Tata Power Trading Company offtaking the energy to India. The Dagachhu project is also the first cross-border CDM project that has led to other projects being cleared under the Clean Development Mechanism."

"The main promoter, ADB, has been very happy with the implementation of the Dagachhu project, and has agreed to finance the 118 MW Nikachhu project and also expand on ADB’s involvement in Bhutan’s hydropower sector. For Bhutan, the successful completion of the Dagachhu project has given confidence of its own internal capabilities in developing such projects and plans to continue to build its human capital through implementation of similar and larger projects. For the management team, it has been a huge relief to have finally commissioned the first unit, Rinzin said.

"Druk Green hopes to achieve similar successes with its future projects and would like to thank the Tata Power and Tata Power Trading for helping Dagachhu project to achieve its commissioning,” he added.

The projects is the first public-private partnership in infrastructure investment in Bhutan with participation from multiple Bhutanese and international stakeholders. Thus, Dagacchu Hydro Project serves as a model for other countries- particularly those with low GHG-emitting grid- to harness the benefits of CDM towards enhancing the socioeconomic development of the country while meeting the escalating energy demand in a sustainable way.