Analysis of Bhutan’s Long-Term Energy Demand Projection Using the End-Use Methodology

Abstract

This paper addresses the pressing need to project Bhutan's long-term energy demand by considering
crucial factors like socioeconomic dynamics, demographic trends, technological advancements, and
emerging policies, which are essential for informed policymaking. It employs two scenarios:
Business as Usual (BAU) which assumes a normal economic growth rate and follows historical
trends in energy demand, while the Policy Motivated Scenario (PMS) scenario takes into account
the potential impact of the EV (electric vehicle) Road Map 2035 policy, which aims to promote the
use of electric vehicles in Bhutan. The Model for Analysis of Energy Demand (MAED_D) was
utilized and the results projection shows that by 2040, the total energy of Bhutan will increase by
about 121% (2,194.703 ktoe) under BAU and about 173% under PMS with respect to base year of
this study (2017). Under BAU, by 2040, the industrial sector remains the largest consumer (59%),
followed by households (21%), transportation (13%) and service (7%). The demand analysis by
energy form projects a stable biomass demand at 533.9 ktoe and substantial electricity growth at
747.8 ktoe by 2040. Fossil fuel is anticipated to account 29% of the total energy in 2040 from 12 %
in 2017. The motor fuel is expected to reach 286.9 ktoe by 2040. Under the PMS scenario, the
electricity consumption will increase consistently reaching 9,866.19 GWh by 2040, which accounts
to 44% share of the total fuel mix. Notably the electricity as a transportation fuel is anticipated to
grow significantly to 39.42 ktoe by 2040 to represents 19.33% share of the fuel mix in the
transportation sector. Furthermore the population and GDP are projected to reach 0.86 million and
5.789 billion US dollars, respectively, by 2040. Per capita GDP is expected to increase from
3477.547 US dollars in 2017 to 6732.48 US dollars by 2040, while final energy per capita and per
GDP will account for 22.36 toe/cap and 0.069 kgoe/US$, respectively, by 2040, indicating the
evolving energy landscape in Bhutan