DHI Explores Renewable Energy Potential in the Country

DHI Explores to Unlock Renewable Energy Potential in the Country

Bhutan’s geologic features suggest it has strong potential to generate geothermal energy, which uses naturally occurring heat from the earth to generate electricity, heating, geothermal spas and other applications and potentially drastically reducing greenhouse gas emissions in the process.
Bhutan already meets most of its domestic power needs with renewable energy and at the same time is a major exporter of electricity to India, helping to accelerate the green transition for the wider region.
Druk Holding and Investments Ltd is working with global partners to explore unlocking the unique renewable energy in the country. Focusing on future-oriented investments as part of our 10x journey corporate strategy, we aim to grow the value of our investment portfolio by 10x by the year 2030.

Geothermal exploration for various use cases, including electric power generation, are types of innovative technology that would propel the 10x journey, delivering on DHI’s ambitious growth target while also leveraging a proven but potentially underutilised renewable energy source to help drive economic growth and provide a better future for young people in the Kingdom.

Geothermal Power is Capital Intensive, but “always on”

As an energy source, geothermal is not plagued by intermittency that has proven challenging for other renewables. Highly reliable, geothermal plants can consistently generate heat and electricity year-round. Select countries across the world with the geological conditions to enable geothermal power generation are investing in grid-scale facilities. Indeed, Iceland produces around 25% of its energy via geothermal power generation, giving it an impressively low CO2 emissions ratio of only 34 g/kWh[1] compared to a global average of 475 gCO2/kWh[2].

Of course, these benefits come at a cost – geothermal power is highly capital-intensive from the exploration stage to the build out of facilities. This is partially offset by the carbon savings – which cannot be underestimated in a world in which excess carbon emissions have become costlier by the year. Other factors that offset the cost include positive externalities from the generation process, which include surplus radiant energy which can be used to heat homes and businesses and even to boost agricultural yields. Indeed, data shows that geothermal energy generation creates the most indirect employment of all renewables – one study found that geothermal produces 34 jobs per installed megawatt, much higher than the 19 created by wind power and the 12 by photovoltaic energy.[3]

Another Growth Driver for Bhutan’s Nascent Economy

One cannot ignore the fact that Bhutan faces a range of economic and social challenges. However, in December 2023, His Majesty the King announced plans to boost economic development and raise standards of living in Bhutan via the development of the Gelephu Mindfulness City Special Administrative Region, a region of the Kingdom with its own regulations and laws designed to facilitate the setting up and growth of innovative companies in industries such as technology and healthcare.

That said, growth requires energy, something His Majesty acknowledged as he called for the acceleration of renewable power project development in Bhutan as an important complement to the build out of Gelephu Mindfulness City. DHI is already investing in previously untapped energy sources to make sure that clean, green energy remains a key enabler of innovative growth across the Kingdom, helping to attract global companies to invest and do business in Bhutan. Geothermal power generation has the potential to be one of the opportunities for DHI to invest in an innovative technology that could help drive its 10x growth journey and deliver positive benefits for the Bhutanese people and even the world.

Bhutan Partnering with Geothermal Leaders

Bhutan’s geography and geology suggest ample geothermal potential – for example, it is home to several popular hot spring sites which are traditionally valued for their therapeutic benefits. That said, the presence of naturally heated water also points to the potential for successful geothermal exploration. Thus, building on global best practices and aligning with The Kingdom’s national green energy strategies, DHI is investigating how to harness this natural resource to consistently generate renewable electricity and heat.

Key partners include the World Bank’s ESMAP programme and the Icelandic Geo-survey (ISOR), who are working with Bhutanese counterparts to conduct pre-feasibility studies and on-site water testing to judge geothermal generation potential.

ESMAP was established in 1983 in response to the global energy crisis of the late 1970s. Given geothermal energy requires high capital investment at early project stages, ESMAP is breaking down barriers to potentially fruitful developments by mobilising financing to share the investment risk inherent in early-stage drilling.[4]

The Iceland GeoSurvey is a consulting and research institute providing specialist geothermal development services to global energy enterprises.[5] ISOR leverages Iceland’s unique experience in leveraging geothermal energy to help expand use of this renewable source across the world.

Together with global partners, DHI is in the process of surveying key sites across the Kingdom that show high potential for traditional and advanced geothermal technologies including shallow geothermal, with applications ranging from point heating to electricity generation at scale.

Once the potential for successful geothermal energy generation in Bhutan is confirmed, DHI will move forward in partnership with global industry leaders and funding facilitators to bring the renewable power generation technology to Bhutan. In the process, Bhutan’s energy security will be further entrenched, domestic economic growth will benefit from another source of affordable, sustainable – and “always on” – electricity.

Exploration of geothermal energy is an important undertaking that reflects a key component of our Investment Strategy, which focuses investment on innovation.

By integrating geothermal energy into our energy portfolio, energy consumers in the Kingdom of Bhutan would gain access to another sustainable and innovative energy solution, paving the way for a greener and more resilient future.