Bhutan

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GH2 Country Portal – Bhutan

Green Hydrogen Vision

Bhutan's green hydrogen vision is deeply rooted in its commitment to sustainability, energy security, and maintaining its carbon-negative status. With its abundant hydropower resources—estimated at 32,600 MW of techno-economically viable potential—Bhutan aims to leverage its clean and renewable electricity to produce cost-competitive green hydrogen through water electrolysis. This green hydrogen will play a pivotal role in decarbonizing hard-to-abate sectors such as transportation, industry, and power generation, addressing Bhutan's rising dependence on fossil fuel imports and the associated trade imbalance. By 2050, Bhutan envisions producing over 428,000 tons of green hydrogen annually, with a long-term electrolyser capacity of 3 GW to meet both domestic and regional demand. Hydrogen will transform Bhutan’s energy system, serving as a seasonal energy storage solution to balance hydropower generation, particularly during lean seasons, and enhancing grid stability.  

In transportation, the roadmap outlines ambitious targets, including hydrogen-powered fuel cell vehicles constituting 11% of the vehicle fleet by 2050, alongside the establishment of 188 hydrogen refuelling stations to support this transition. Industrial applications such as green steel and cement production, as well as synthetic fuels, are key focus areas, positioning Bhutan as a regional leader in clean industrial practices. The hydrogen economy is expected to bring significant economic benefits, creating new employment opportunities, attracting investments, and fostering technological innovation. By becoming a hub for green hydrogen production and export, Bhutan not only aims to contribute to global decarbonization goals but also to ensure long-term energy security, economic resilience, and a cleaner, greener future for its people and the world. 

National Strategy

Bhutan’s 2024 National Hydrogen Roadmap outlines the country’s strategic approach to developing a green hydrogen economy as part of its broader commitment to sustainability and energy security. Leveraging its abundant hydropower resources, Bhutan plans to produce green hydrogen at a competitive cost, positioning itself as a significant player in the regional and global clean energy market. The roadmap emphasises the role of green hydrogen in decarbonising hard-to-abate sectors such as transportation, industry, and power generation while addressing Bhutan's energy security challenges during lean seasons. The strategy identifies three key phases—near-term (2023-2030) for laying foundations, medium-term (2030-2040) for growth and diversification, and long-term (2040-2050) for rapid market expansion. 

The roadmap highlights challenges such as infrastructure gaps, the need for policy frameworks, and the high cost of initial investments. Bhutan aims to engage stakeholders, foster innovation, and attract external financing to overcome these hurdles. By embracing green hydrogen technology, Bhutan seeks to reduce fossil fuel imports, enhance its trade balance, create employment, and sustain its carbon-negative status while contributing to global decarbonisation efforts. 

Capacity and Capacity targets

Electricity Generation: 

  • Bhutan has a hydropower generation potential of 32,600 MW, of which the current installed capacity is 2,334 MW. 
  • By 2030, Bhutan aims to add another 3,641 MW of hydropower and 1,000 MWp from solar PV to the grid. 

Green Hydrogen Targets: 

  • Electrolyser Capacity:  
  1. 2023-2030: Initial capacity setup focusing on pilot projects like a 5 MW hydrogen production plant. 
  2. 2040: Electrolyser capacity target of 942 MW. 
  3. 2050: Long-term goal of achieving 3,018 MW. 
  • Hydrogen Production:  
  1. By 2030, annual green hydrogen production is estimated at 53,418 tons. 
  2. By 2050, production could reach up to 428,207 tons. 

Impact Targets

Reduction in Fossil Fuel Imports: 

  • Adopting hydrogen mobility (fuel cell vehicles) is expected to reduce fossil fuel imports by 14.1% by 2050, saving approximately $79.5 million annually. 

Emission Reduction: 

  • Through hydrogen adoption, Bhutan aims to cut 0.29 million tons of CO2 emissions annually by 2050. 

Sector-Specific Impact: 

  • Transportation: Hydrogen-powered mobility aims to include 11% of fuel cell vehicles in the total fleet by 2050, supported by 188 refuelling stations. 
  • Industry: Green hydrogen will decarbonise 16,200 metric tons of steel and cement production by 2050. 
  • Power Generation: Integration of hydrogen for seasonal energy storage to balance hydropower generation. 

Policy Spotlight

In late 2024, Tata Power partnered with Bhutan’s Druk Green Power Corporation (DGPC), a subsidiary of Druk Holding and Investments Limited, to create 5,000 MW of renewable energy. This includes 4,500 MW from hydropower and 500 MW from solar projects. Noteworthy initiatives in this collaboration feature the Dorjilung Hydropower Project, Gongri Reservoir, Jeri Pumped Storage, Chamkharchhu IV, and solar projects by Tata Power Renewable Energy Limited. This collaboration furthers Bhutan’s ambition to reach 25,000 MW of generation capacity by 2040 and enhances energy integration in the region. It builds on earlier partnerships, such as the 126 MW Dagachhu Hydropower Plant and Bhutan-India transmission initiatives. In August 2024, Tata Power and DGPC solidified their strategic collaboration by commencing the development of the 600 MW Khorlochhu Hydropower Project in Trashiyangtse, with Tata Power taking a 40 per cent share in the Rs 69 billion project, which is scheduled for completion within five years. 

Financing

Investment Requirements: 

  • Hydrogen Mobility: An estimated investment of $263 million is required to establish hydrogen refuelling stations by 2050. 
  • Industrial Hydrogen: Investment in 115 MW electrolyser capacity to support hydrogen use in industries like steel and cement. 
  • Energy Storage: Approximately $8 million is required to build a 15-ton seasonal hydrogen storage facility by 2030. 

External Financing: 

  • Bhutan will pursue international development banks, subsidies, and partnerships to attract investments for its hydrogen economy. 
  • Incentives such as tax breaks and government-backed funding programs will support private-sector participation. 

Key Enablers: 

  • Strategic partnerships with global technology providers and engineering firms. 
  • Promotion of research and development (R&D) to lower production costs and enhance domestic innovation. 

Government green hydrogen lead 

Ministry of Energy and Natural Resources 

Department of Energy