WSJ: “When northern India was hit by its worst power outage in a decade early Monday – bringing trains to a standstill, creating massive road jams in the absence of traffic signals, and keeping thousands of offices and factories shut – the country’s leaders turned to its tiny neighbor Bhutan for help.
The Himalayan kingdom responded by releasing additional power from its hydroelectric plants, allowing New Delhi to restore some order while government officials and engineers worked to fix its electricity network.
This example of David coming to Goliath’s rescue speaks of Bhutan’s successful efforts to increase its electricity generation capacity to help boost its modest economy.
Bhutan – which is just 1% of India’s size and has fewer than 800,000 people compared with its neighbor’s 1.2 billion – now provides 1% of India’s electricity needs.
India has a deal to buy 5.480 billion kilowatt hours of power from Bhutan in the year that began April 1. The number might seem small, but it is hugely significant for Bhutan.
The electricity sector’s share of Bhutan’s economy has reached almost 20%, and it now outstrips agriculture as the single-largest contributor to gross domestic product, according to a World Bank report published in September.
Bhutan’s gross domestic product grew 8.1% in the year that ended March 31, 2011, helped by the construction of new hydropower projects, the report added. It anticipated that electricity exports will be the country’s main source of growth in the short-to-medium term.
Bhutan has hydro power potential of 30,000 megawatts, about a fifth of India’s own potential. However, the hydro projects in India aren’t making much progress due to strong protests from environmentalists and other issues.
So New Delhi is focusing on tapping the potential of land-locked Bhutan. India has helped build 96% of the kingdom’s overall hydropower capacity (1,472 megawatts.)
In July 2006, India agreed to develop and import 5,000 megawatt of electricity from Bhutan by 2020. The target was doubled to 10,000 MW in May 2008.
India also has a significant military presence in Bhutan, which it views of strategic importance as it shares a disputed border with China.”
via India’s Power Demand Fuels Bhutan’s Economy – India Real Time – WSJ.
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