Dynamics of Electricity Demand: Analysis and Forecasting for Bhutan

Bhutan is endowed with abundant renewable energy sources to generate electricity from hydro,solar, and wind. Bhutan achieved over 99% electrification in 2016, well ahead of its year 2020target. This paper provides a comprehensive overview of Bhutan’s electricity demand, a countryexperiencing significant economic growth and accelerated energy demand growth. This study aimsto assess current trends and project future electricity demand. Bhutan's electricity demand has beengrowing over the years, reaching 9,167 kWh per capita in 2024, with a 12% CAGR over twodecades. The industrial sector dominates consumption, accounting for over 88% of total demand,while residential, institutional, and commercial consumers contribute just over 12%. Electricitydemand follows seasonal patterns, peaking in winter due to heating needs. To forecast low voltagedemand, the Holt-Winters method was used, a time series forecasting technique incorporating trendand seasonality. This model effectively captures demand fluctuations, which are influenced byeconomic growth and seasonal variations. The forecast for the existing and upcoming high voltageindustries are based on the contract demand, demand factor and load factor of existing industries.Using the Holt-Winters forecasting method for low voltage and contract demand for industries, thestudy projects a 15.05% CAGR in electricity demand over the next five years, with 94% demandfrom energy-intensive loads. As demand outpaces supply, strategic planning, capacity expansion,and policy actions are critical for ensuring reliable energy to support Bhutan’s socio-economicdevelopment. The projections suggest that there is a need to enhance firm generation capacity to beable to ensure energy security and meet the increasing demand and eliminate winter power deficits.