Study of Energy Efficiency Upgradation and Investment Risk

Abstract

It was about 60 years ago when electricity was first introduced in Bhutan and today, more than 99.97 percent of households are electrified. Since electricity is superior to other form of energy, everybody prefers it. The electricity demand is increasing rapidly with development in all fronts. Distribution system are currently experiencing rapid changes in domestic load growth. With increasing domestic electricity consumption, Royal Government of Bhutan (RGoB) recognizes the importance of energy management and reduction at the consumer end to further minimize carbon emission and to increase the exports. While achieving 100 percent electrification of Bhutan, the increased consumer reduces the export, reducing the total revenue generated. The study identifies possible barriers of energy efficiency in domestic and industrial sectors. The lack of policy framework is one of the main reasons for the decline in interest in energy efficiency. The government subsidy is another cause of the same. This in turn led to negligence of Energy Efficiency (EE) programs by the consumers. On the contrary, consumers feel that the cost of energy is high, despite the fact that urban dwellers' expenditure capacity and productivity upgradation potential are also high. Based on a case study of residential and commercial buildings in the Phuntsholing region, as well as industrial sectors in Pasakha, this paper examines the metrics needed to make energy efficiency upgrade decisions. The study finds respondents were more likely to choose equipment that suited their budget rather than those that are energy efficient. Another big impediment to investment in energy efficiency in the region is a lack of energy efficiency awareness and information.