The Energy Transition in Bhutan

Bhutan is a global leader in sustainability, with a strong focus on renewable energy and environmental conservation through its commitment to Gross National Happiness (GNH). GNH is a holistic development framework introduced by Bhutan's 4th King, Jigme Singye Wangchuck, in the 1970s. It prioritises overall well-being and happiness over GDP, with a focus on sustainable development. The GNH Index measures progress across nine domains, including psychological well-being, health, education, and ecological resilience, using 33 indicators to assess the happiness and prosperity of Bhutan’s population. The index helps guide policy decisions, ensuring that growth is equitable, socially responsible, and aligned with environmental conservation. By integrating ESG principles, Bhutan seeks to maintain a balance between economic growth and societal well-being, creating a model for progress that goes beyond traditional economic indicators. The country’s energy mix is primarily driven by hydropower, leveraging its abundant water resources to generate renewable electricity, making Bhutan one of the only carbon-negative countries in the world. While Bhutan has limited critical mineral resources, it is exploring the potential of minerals such as iron and beryllium, positioning itself as a key player in regional and global clean energy supply chains. Bhutan’s policies are aligned with ESG principles, ensuring that growth remains sustainable and socially responsible. Geopolitically, Bhutan maintains strong relations with India, which plays a crucial role in Bhutan’s energy strategy and mineral development, providing access to regional energy markets and facilitating trade. By focusing on sustainable energy solutions, Bhutan is positioning itself as a model for clean energy policies in South Asia, while also considering responsible mining and critical mineral development as part of its long-term growth. The country’s energy mix is dominated by hydropower, with some reliance on coal, and Bhutan is also investing in the responsible extraction of minerals to support its growing energy needs.