It seems likely they felt they can get more for it from mining Bitcoin. Surely they’ve done the math. Why would a country, like a business, choose to make less money?
Because it's worse for the world. They have a tremendous source of green energy, and they could sell more of it to India reduce the amount of coal and oil India burns, but instead they use it to spin motors to power computers to guess random numbers and hope they make the rich a little richer.
Plenty of countries have chosen to have environmental goals at the cost of making less money.
I’m not sure Bhutan can afford to do that. It reminds me of when Western countries burned coal for 100 years to get where they are and then don’t want other countries to do that. I get it, and I don’t want the earth polluted either but it certainly smacks of colonialism/manifest destiny type thinking.
> It reminds me of when Western countries burned coal for 100 years to get where they are and then don’t want other countries to do that. I get it, and I don’t want the earth polluted either but it certainly smacks of colonialism/manifest destiny type thinking.
That kind of argument makes less and less sense the more you think about it. It's like arguing that Africa can't develop the Internet until after they get their telegraph network up and running. There's no reason that a functional power grid requires the use of fossil fuels as the primary energy source, and we're already at a point where renewable energy is as cheap to set up as fossil fuel plants. An advantage to starting industrialization later is you don't have to waste time working through worse versions of technology. If you want to be competitive, starting out on the latest and greatest is the best choice, especially because you often have a chance of undercutting existing providers who have too much sunk capital costs in less efficient technology.
This is great reply. This particular sentence is very pithy: <<It's like arguing that Africa can't develop the Internet until after they get their telegraph network up and running.>>
I can recall many, many years ago (20+), reading an article about the future of telephones. The article proposed that many developing nations would never install landlines with full penetration because mobile phones are so much cheaper. This was written in the era when mobile phones were still expensive. That blew me away.
East Africa has huge savannahs that are ideal for solar power. I've written here many times about the solar gold mine upon which both North Africa and the Middle East are sitting. I agree: There is a good chance that coal power plants don't make sense in the face of very cheap solar power. Also, many developing nations depend upon foreign capital / loans to build power plants. The lenders will very much prefer green energy over coal. What is harder: Tearing down coal power plants in developing nations. Why? The money is already spent to build a huge power plant.
I can recall many, many years ago (20+), reading an article about the future of telephones. The article proposed that many developing nations would never install landlines with full penetration because mobile phones are so much cheaper. This was written in the era when mobile phones were still expensive. That blew me away.
This brings back bad memories, and illustrates the risk of linear thinking: South Africa's black population was denied proper services under apartheid, including telecommunications. In an effort to supposedly right that wrong, the state-owned telecommunications company, Telkom, was given a years-long monopoly on fixed-line telecommunications in return for putting in fixed line connections to black communities. There were reports that an American corporation, SBC, helped write the country's telecoms act after it acquired a minority stake in Telkom.[1][2]
That monopoly set South Africa back many years, and it's only been in the last decade that it began catching up with the rest of the world. Oh, and the copper network has been so badly looted that many/most places now have wireless landlines. And those under-served black people: they all bought cellphones for the same reasons that people in the rest of the world did.
> If you want to be competitive, starting out on the latest and greatest is the best choice, [...]
That's not true in general. It depends on the specific situation.
You are right about learning from existing technology, and that people will not and should not blindly retrace the technological evolution, missteps and all, of those who came before them.
To give an example that combines both points: a poor country might be well advised to focus on bicycles instead of modern cars. But that doesn't mean they need to do a penny-farthing before they can get to safety bikes.
Possibly because there are hucksters whose entire life's goal is to convince others that soon rapture (hyperbitcoinization) will arrive and the believers (hodlers) will be rewarded greatly for their faith.
> Why would a country, like a business, choose to make less money?
For the same reason people got suckered by FTX and the same reason so many got burned in the many BTC crashes: They got taken in by the wild promises of cryptogains.
A lot of people don't understand energy markets. They are not basic commodity markets. They use weird pricing mechanisms and they are tied up with national security concerns on both sides of the border. They rely on a weird kind of distribution infrastructure. The product is consumed immediately, with no (realistic) way to store a ton of it.
Most likely there is a treaty setting a floor price on the power or a demand ceiling, and they have hit one of those. Those limits are negotiated based on all of these considerations.
Without specific knowledge of the agreements between India and Bhutan, or knowledge of the constraints on the network, plus other factors, your comment is hypothetical. I agree with some of your points.
I don’t agree with “They don't control the demand for their power” because Bhutan do have choice over how much they deliver, even if it is only in the long term via their contracts. Bhutan exports 70% of their power, so clearly India wants it.
As an aside, I have two very good friends who work designing electricity markets, and planning country interlinks. I am not a specialist, but I do try to keep up with the play.
> I don’t agree with “They don't control the demand for their power” because Bhutan do have choice over how much they deliver, even if it is only in the long term via their contracts. Bhutan exports 70% of their power, so clearly India wants it.
Without specific knowledge of the agreements between India and Bhutan, this is also hypothetical, and I have to say that it's a big assumption that "India clearly wants it." And even for economics 101 commodities, no supplier controls their demand curve or the optimal quantity to sell.
Bhutan has a monopoly on the locations within its border to put hydro dams. India obviously wants the power (and perhaps Bhutan’s economic dependency) so India has negotiated with Bhutan on how to build those dams.
I get your points, but ultimately Bhutan has control over building hydrodams within its borders, so it is controlling supply, so it does have a lot of control over the price. Of course you can come up with a million quibbles about the details, but you are just arguing yourself into a corner case.
OP’s point was: “Are you suggesting they cannot sell more [electricity to india]?”. You said “They probably can't”. Yet Bhutan is developing more hydro dams, and they are going to sell more electricity to India. Case closed!
Unless you can find some data showing that they are spilling water for $0 without generating electricity…
The part of India that neighbors Bhutan is extremely un/de-industrialized, and due to years of insane 'SJW-liberalism' driven politics, is as bad as the worst of sub-Saharan countries in terms of development metrics. India also gives away electricity for free to farmers (due to similar idiotic populism), and compensates by charging industries more (grid losses in India are also very high). To say that demand side is anemic is an understatement.
Bhutan doesn't have the best relations with Nepal either after the ethnic-cleaning of Nepali Hindus (1/5 its population) from Bhutan. Nepal, ofc, is as poor as India (though better than Bihar).