Energy in Bhutan has been a primary focus of development in the kingdom under its Five-Year Plans. In cooperation with India, Bhutan has undertaken several hydroelectric projects whose output is traded between the countries. Though Bhutan's many hydroelectric plants provide energy far in excess of its needs in the summer, dry winters and increased fuel demand makes the kingdom a marginal net importer of energy from India.

As of 2011, the Bhutanese government supplied electricity to 60 percent of rural households, a significant increase from about 20 percent in 2003. About 2,500 people used solar power throughout Bhutan. Even where electricity was available for lighting, most rural households cooked by wood fire. Rural homes were often heated with firewood, kerosene, or liquid petroleum gas.

Bhutan has no natural petroleum or natural gas reserves. The kingdom has some 1.3 million tonnes of coal reserves, but extracts only about 1,000 tonnes of coal yearly, entirely for domestic consumption. Bhutan also imports oil at some 1,000 barrels per day. Most oil imports supplied fuel for automobiles.

Coordinates: 27°25′01″N 90°26′06″E / 27.417°N 90.435°E / 27.417; 90.435

Bhutan (Dzongkha: འབྲུག་ཡུལ་, tr ʼbrug-yul, "Druk Yul"; Devanagari भूटान, Bhūṭān), officially the Kingdom of Bhutan, is a landlocked state in South Asia, located at the eastern end of the Himalayas and bordered to the south, east and west by the Republic of India and to the north by the People's Republic of China. Bhutan is separated from the nearby country of Nepal to the west by the Indian state of Sikkim, and from Bangladesh to the south by the Indian states of Assam and West Bengal.

Bhutan existed as a patchwork of minor warring fiefdoms until the early 17th century, when the area was unified by Shabdrung Ngawang Namgyal, who fled religious persecution in Tibet and cultivated a separate Bhutanese identity. In the early 20th century, Bhutan came into contact with the British Empire, after which Bhutan continued strong bilateral relations with India upon its independence. In 2006, Business Week rated Bhutan the happiest country in Asia and the eighth-happiest in the world, based on a global survey.