FAQ
Why does Bhutan buy electricity back from India in winter?
Because its hydropower is almost entirely run-of-river, so generation collapses in the dry winter months while demand keeps rising. To cover the gap, Bhutan imports power from India at roughly Nu 4–6 per unit — and then sells it on to its own industrial customers at the fixed Nu 1.60 per unit, about one-third of what it paid. The country that exports clean power in summer pays a premium to buy it back in winter, and absorbs the difference.
Run-of-river plants generate in proportion to how much water is flowing. In the monsoon, Bhutan has a surplus and exports heavily; in the dry winter, output can fall steeply while heating and industrial demand rise. The shortfall is bought from the Indian market — often at scarcity prices of Nu 4–6 per unit — and resold domestically at the regulated Nu 1.60 industrial rate.
Selling a kilowatt for roughly a third of what it cost to buy is a structural loss, and it lands on the power utility’s books. It is one of the four “leaks” in the closed loop with India set out in Paradox #63 and Paradox #51.