Transitioning the energy sector to achieve the 2030 Agenda for Sustainable Development and the objectives of the Paris Agreement presents a complex and difficult task for policymakers. It needs to ensure sustained economic growth as well as respond to increasing energy demand, reduce emissions, and consider and capitalize on the interlinkages between Sustainable Development Goal 7 (SDG 7) and other SDGs. To address this challenge, ESCAP has developed the National Expert SDG Tool for Energy Planning (NEXSTEP).[1] This tool enables policymakers to make informed policy decisions to support the achievement of the SDG 7 targets as well as nationally determined contributions (NDCs). The initiative has been undertaken in response to the Ministerial Declaration of the Second Asian and Pacific Energy Forum (April 2018, Bangkok) and Commission Resolution 74/9, which endorsed its outcome. NEXSTEP also garnered the support of the Committee on Energy in its Second Session, with recommendations to expand the number of countries being supported by this tool.
The key objective of this SDG 7 roadmap[2] is to assist the Government of Bhutan in developing enabling policy measures to achieve the SDG 7 targets. This roadmap contains a matrix of technological options and enabling policy measures for the Government to consider. It presents several scenarios that have been developed using national data, and which consider existing energy policies and strategies as well as reflect on other development plans. These scenarios are expected to enable the Government to make an informed decision to develop and implement a set of policies to achieve SDG 7 by 2030, together with the NDC. The scope of the NEXSTEP analysis is limited to only the emissions and decarbonisation opportunities relevant to the energy and the IPPU sectors.
The key objective of this SDG 7 roadmap[2] is to assist the Government of Bhutan in developing enabling policy measures to achieve the SDG 7 targets. This roadmap contains a matrix of technological options and enabling policy measures for the Government to consider. It presents several scenarios that have been developed using national data, and which consider existing energy policies and strategies as well as reflect on other development plans. These scenarios are expected to enable the Government to make an informed decision to develop and implement a set of policies to achieve SDG 7 by 2030, together with the NDC. The scope of the NEXSTEP analysis is limited to only the emissions and decarbonisation opportunities relevant to the energy and the IPPU sectors.
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Section 1
Title
A. Highlights of the Roadmap
Content
Bhutan has made a significant progress in increasing access to electricity in recent years and has achieved almost 100 per cent access rate in 2018. However, more can be done to close the clean cooking gap, as around a quarter of the population was still relying on polluting cooking fuels and technology in 2017. Energy efficiency improvement needs to be boosted across all sectors in order to achieve a 3.0 per cent annual improvement, reducing energy intensity from 3.75 megajoules per United States dollar (MJ/USD) to 2.54 MJ/USD by 2030.
Bhutan is endowed with huge hydropower potential, and has installed capacity of 1,614 MW which contributes significantly to the nation’s GDP through cross border power trade. Biomass makes up a substantial amount of the energy demand, mainly for heating and cooking purposes in the residential and commercial sectors. Imported fuels, however, still make up around one-third of the nation’s primary energy supply. 60 per cent of the imported fuels are used to power the transport sector. While this energy dependency may be a potential threat to Bhutan, the reliance on imported fuels can be reduced through adoption of electric vehicles, allowing for the utilization of locally produced renewable energy. This is also imperative in energy demand reduction. Being the world’s only carbon-negative country, Bhutan is well positioned to maintain its commitment towards the Paris Agreement. At the same time, it has ample opportunities to achieve more by decarbonising its energy system. The energy efficiency and GHG emission reduction measures are further examined in this roadmap.
Bhutan is endowed with huge hydropower potential, and has installed capacity of 1,614 MW which contributes significantly to the nation’s GDP through cross border power trade. Biomass makes up a substantial amount of the energy demand, mainly for heating and cooking purposes in the residential and commercial sectors. Imported fuels, however, still make up around one-third of the nation’s primary energy supply. 60 per cent of the imported fuels are used to power the transport sector. While this energy dependency may be a potential threat to Bhutan, the reliance on imported fuels can be reduced through adoption of electric vehicles, allowing for the utilization of locally produced renewable energy. This is also imperative in energy demand reduction. Being the world’s only carbon-negative country, Bhutan is well positioned to maintain its commitment towards the Paris Agreement. At the same time, it has ample opportunities to achieve more by decarbonising its energy system. The energy efficiency and GHG emission reduction measures are further examined in this roadmap.
Section 2
Title
B. Achieving Bhutan's SDG7 and NDC targets by 2030
Content
1. Universal access to clean cooking
The electricity access rate was estimated at 98.4 per cent in the baseline year of 2017, and has progressed to 100 per cent by 2018. On the other hand, in 2017, around a quarter of the population in Bhutan still relied on polluting cooking fuel and technology. Such practice exposes these people, mostly women, to negative health impacts. It is expected that the clean cooking access rate will be raised to 90 per cent by 2030, as projected based on the historical improvement trend between 2015 and 2019. Additional effort is required to ensure the achievement of SDG 7.1 target. In consultation with stakeholders, improved cooking stoves (ICS) have been considered to be the most appropriate clean cooking solution, in the context of Bhutan, in advancing the progress in the near future. The efficiency of ICS is more than double of the traditional cooking stove, hence reduces fuel consumption and cost. More importantly, it reduces harmful particulate emissions – the major culprit in air pollution-related mortality and health conditions. However, each type of ICS will need to be tested to ensure that it passes the WHO guideline[3] for clean cookstoves.
Figure ES 1. Bhutan’s access to clean cooking under the BAU, CPS and SDG scenarios
2. Renewable energy
The share of modern renewable energy[4] in the total final energy consumption (TFEC) was 33.0 per cent in 2019.[5] Based on current policies, the share of renewable energy is projected to increase to 42.3 per cent by 2030. The increase in RE share is due to a combination of two fuel substituting measures. These are (a) replacing fuelwood and kerosene heating systems in the urban areas with electric heating systems and (b) increasing electric vehicles to replace Internal Combustion Engines (ICEs). The replacement of fossil fuel with 100 per cent renewable electricity in the SDG scenario will increase renewable energy share in TFEC to 54.4 per cent.
3. Energy efficiency
Bhutan’s energy intensity in 2017 was estimated to be 3.75 MJ/USD2017. Energy intensity in Bhutan has declined at an average annual rate of 4.8 per cent between 1990 and 2010. A doubling of the 1990-2010 improvement rate is required to achieve the SDG 7.3 target, which requires an average annual rate increase of 9.6 per cent between 2010 and 2030. This would be an extremely challenging target, in which energy intensity will need to reduce to 1.25 MJ/USD2017. In consultation with stakeholders, a conservative energy efficiency improvement target of 3.0 per cent per annum[6] has been agreed which will align with the suggested global energy efficiency improvement rate(UNSD, 2021) .
Figure ES 2. Bhutan energy efficiency target[7]
Under the current policy settings, the energy intensity is projected to drop to 3.18 MJ//USD2017 by 2030, falling short of the energy efficiency target. This is achieved in the SDG scenario, reaching an intensity of 2.54 MJ//USD2017, through the phasing out of inefficient cooking technologies, as well as polluting heating technologies. Additionally, achieving this requires much effort from other sectors, most notably through the promotion of electric vehicles across all road transport categories. These opportunities are discussed in later sections of this report.
4. Nationally Determined Contribution
Bhutan is committed to maintain its carbon-neutral status. Owing to its vast carbon sequestration potential, Bhutan is the world’s only carbon negative country. The emissions allowances for both the energy sector, including Industrial Processes and Product Use (IPPU), are estimated at 7.1 MTCO2-e/annum, in total.[8] These emissions are projected to increase to 3.93 MTCO2-e under the BAU scenario, well within the emissions allowances. However, with the measures proposed in this roadmap, GHG emissions are expected to decrease further as energy efficiency measures are implemented in order to achieve the energy efficiency target. Additionally, Bhutan may consider a higher GHG emissions reduction from the IPPU sector.
Figure ES 3. Comparison of emissions, by scenario, 2018-2030
The electricity access rate was estimated at 98.4 per cent in the baseline year of 2017, and has progressed to 100 per cent by 2018. On the other hand, in 2017, around a quarter of the population in Bhutan still relied on polluting cooking fuel and technology. Such practice exposes these people, mostly women, to negative health impacts. It is expected that the clean cooking access rate will be raised to 90 per cent by 2030, as projected based on the historical improvement trend between 2015 and 2019. Additional effort is required to ensure the achievement of SDG 7.1 target. In consultation with stakeholders, improved cooking stoves (ICS) have been considered to be the most appropriate clean cooking solution, in the context of Bhutan, in advancing the progress in the near future. The efficiency of ICS is more than double of the traditional cooking stove, hence reduces fuel consumption and cost. More importantly, it reduces harmful particulate emissions – the major culprit in air pollution-related mortality and health conditions. However, each type of ICS will need to be tested to ensure that it passes the WHO guideline[3] for clean cookstoves.
Figure ES 1. Bhutan’s access to clean cooking under the BAU, CPS and SDG scenarios
2. Renewable energy
The share of modern renewable energy[4] in the total final energy consumption (TFEC) was 33.0 per cent in 2019.[5] Based on current policies, the share of renewable energy is projected to increase to 42.3 per cent by 2030. The increase in RE share is due to a combination of two fuel substituting measures. These are (a) replacing fuelwood and kerosene heating systems in the urban areas with electric heating systems and (b) increasing electric vehicles to replace Internal Combustion Engines (ICEs). The replacement of fossil fuel with 100 per cent renewable electricity in the SDG scenario will increase renewable energy share in TFEC to 54.4 per cent.
3. Energy efficiency
Bhutan’s energy intensity in 2017 was estimated to be 3.75 MJ/USD2017. Energy intensity in Bhutan has declined at an average annual rate of 4.8 per cent between 1990 and 2010. A doubling of the 1990-2010 improvement rate is required to achieve the SDG 7.3 target, which requires an average annual rate increase of 9.6 per cent between 2010 and 2030. This would be an extremely challenging target, in which energy intensity will need to reduce to 1.25 MJ/USD2017. In consultation with stakeholders, a conservative energy efficiency improvement target of 3.0 per cent per annum[6] has been agreed which will align with the suggested global energy efficiency improvement rate
Figure ES 2. Bhutan energy efficiency target[7]
Under the current policy settings, the energy intensity is projected to drop to 3.18 MJ//USD2017 by 2030, falling short of the energy efficiency target. This is achieved in the SDG scenario, reaching an intensity of 2.54 MJ//USD2017, through the phasing out of inefficient cooking technologies, as well as polluting heating technologies. Additionally, achieving this requires much effort from other sectors, most notably through the promotion of electric vehicles across all road transport categories. These opportunities are discussed in later sections of this report.
4. Nationally Determined Contribution
Bhutan is committed to maintain its carbon-neutral status. Owing to its vast carbon sequestration potential, Bhutan is the world’s only carbon negative country. The emissions allowances for both the energy sector, including Industrial Processes and Product Use (IPPU), are estimated at 7.1 MTCO2-e/annum, in total.[8] These emissions are projected to increase to 3.93 MTCO2-e under the BAU scenario, well within the emissions allowances. However, with the measures proposed in this roadmap, GHG emissions are expected to decrease further as energy efficiency measures are implemented in order to achieve the energy efficiency target. Additionally, Bhutan may consider a higher GHG emissions reduction from the IPPU sector.
Figure ES 3. Comparison of emissions, by scenario, 2018-2030
Section 3
Title
C. Important policy directions
Content
The roadmap sets out five key policy recommendations to help Bhutan achieve the SDG 7 targets as well as realising a substantial decarbonisation across the economy:
- Access to clean cooking technologies should be the number one priority. Improved cooking stoves that meet the WHO guidelines[9] should be promoted to achieve 100 per cent access to clean cooking by the end of the decade. Despite a higher upfront cost, this solution provides long term cost savings, and more importantly, improves health.
- Improvement of indoor space heating technologies should be pursued to reduce impacts from indoor air pollution. Quite a substantial number of households rely on traditional fuelwood and kerosene stoves for their heating needs. Advanced Bukhari[10] is a cost-effective alternative for lower income households, while electric heating is highly efficient, and eliminates household air pollution.
- Transport electrification is key to energy demand reduction, maximising renewable energy utilization and reducing GHG emissions. Setting a high bar for transport electrification shall result in substantial GHG emissions and energy demand reduction. At the same time, it reduces reliance on imported oil products to improve national energy security.
- Green building code should be made mandatory and energy efficient cooking should be encouraged for all new commercial and institutional buildings. Energy conscious building design shall provide huge potential in reducing thermal cooling and heating needs. Commercial consumers should be encouraged to adopt energy efficient methods and appliances, such as electric cooking and energy efficient lighting, to improve energy efficiency.
- Decarbonisation of the industrial sector should be given importance, to reduce both energy-related and process emissions. Industrial emissions contribute substantially to the overall national emissions. Material/fuel substitution and innovative technologies should be adopted to realise energy demand and GHG emissions reduction.
[1] The NEXSTEP tool has been specially designed to perform analyses of the energy sector in the context of SDG 7 and NDC, with an aim that the output will provide a set of policy recommendations to achieve the SDG 7 and NDC targets.
[2] This roadmap examines the current status of the national energy sector and existing policies, compares them with the SDG 7 targets, and presents different scenarios highlighting technological options and enabling policy measures for the Government to consider.
[4] Renewable energy excluding traditional use of biomass
[5] Excluding traditional biomass usage in residential cooking and residential space heating.
[6] See global energy intensity rate of 3.0 per cent per year explained in Box 2.
[7] Calculated based on data from the Asia Pacific Energy Portal.
[8] Further explained in Section 1.3
[10] Advanced Bukhari is a type of improved cook stoves used in some countries, including Bhutan