AI, Green Energy and Bhutan

What India can learn from Gelephu about powering AI with natural resources.

Key takeaways

• India’s AI build-out is power-bound. Data centre capacity is set to grow from 2.2 GW (2025) to 12 GW (2030), and large sites in hubs like Navi Mumbai can wait two to three years for a grid connection.
• Bhutan is turning rivers into compute. Gelephu Mindfulness City, a new special region on the Assam border, has reserved 100 MW of hydro power for its first AI tenant and targets 3 GW of data centres by 2035.
• Winter is the hard part. Bhutan’s peak winter demand hit 1,477 MW in 2025, against about 450 MW of lean-season hydro output. About 4.5 GW of new hydro and solar is planned, mostly after 2030.
• The lesson for India: treat clean power as a product, put compute next to it, size firm supply to the worst month, make computing flexible, and write local jobs into every deal.

India’s AI wave needs power first

If you build AI products in India, power is becoming the main constraint. For a large data centre in hubs like Navi Mumbai, , longer than it takes to build the data centre itself.

That is why, after a trip to Bhutan last week, I keep thinking about Gelephu, a new city on Bhutan’s southern border with Assam. Bhutan is trying something India has not yet tried at scale. It decided in advance what its natural resources are for, and it is building a city, a legal system and a power plan around that decision. The first product is AI compute.

I did not visit Gelephu itself. But the people I met kept bringing it up. They were proud of the project and honest about what is still unsolved. This piece is based on my reading since the trip and the questions those conversations raised.

My argument: Gelephu is a playbook India can use to fuel its next wave of AI with its own natural resources. Treat clean power as a product. Build the institutions before the investors arrive. Plan the place around the resource. Design for the season when the resource runs short. Make the computing flexible. Tie every megawatt to jobs. Bhutan is well ahead on the first three. The rest are still being worked out, and they are the lessons India needs most.

The pressure on India is real. The IEA expects global data centre electricity use to more than double by 2030, from about 415 TWh in 2024 to around 945 TWh, slightly more than Japan uses today. A typical AI-focused data centre uses as much electricity as 100,000 households.

Wood Mackenzie expects India’s operational data centre capacity to grow from 2.2 GW in 2025 to 12 GW by 2030, and AI-dedicated capacity to rise from 275 MW to 6,546 MW. It names firm, round-the-clock power as the main constraint, ahead of land and capital. Deloitte estimates that data centres could add 2 to 3 GW of peak demand in each large digital state by 2030, including Karnataka.

India’s grid still runs mostly on coal, which produced about 71 per cent of its electricity in 2025. So the question for India is not only how to find 10 GW more for data centres. It is how to find 10 GW of clean, firm power. Bhutan has been working on a small version of that question for decades.

Lesson 1: Treat clean power as a product, not just an export

About 99 per cent of Bhutan’s electricity comes from hydropower, and hydropower paid for the country’s development. The 336 MW Chukha plant started generating between 1986 and 1988, and electricity sales to India became the core of the economy. Since then India and Bhutan have built four more large plants together. The latest, the 1,020 MW Punatsangchhu-II, was fully commissioned in August 2025 and took Bhutan’s total capacity to about 3,490 MW.

Hydropower now makes up about 12.5 per cent of GDP directly and is the largest export earner. When Punatsangchhu-II came online, the electricity sector grew 27.16 per cent and lifted national growth to 8.52 per cent in 2025.

The new idea is what Bhutan does with power it cannot sell well. In April 2019, when Bitcoin was worth about USD 5,000, the sovereign fund Druk Holding and Investments (DHI) started mining it with surplus hydro power. By 2024, blockchain analysts estimated Bhutan held more than 13,000 BTC, the fourth-largest holding of any government. GMC has described Bitcoin as a kind of battery for surplus hydro power. Bitdeer, a Singapore-based miner, reports about 600 MW of mining capacity in Bhutan, including a 500 MW site at Jigmeling, near Gelephu.

AI compute is the next step in the same idea. Exported power earns a tariff that the two governments negotiate. The tariff for Punatsangchhu-II was only signed in April 2026, seven months after exports began, at Nu 5.10 a unit. Compute sold from Gelephu would be priced by the market, and the people running it would work in Bhutan.

For India: India mostly sells clean power as electricity, through long-term contracts. Bhutan’s lesson is that the same unit of power is worth more when it leaves as a finished product: a mined coin, a trained model, an answered query. States with surplus solar, wind or hydro can ask what that power could be turned into locally, instead of only where it can be sent.

Lesson 2: Build the institutions before the investors

Bhutan stayed closed for centuries. It began to open up in the early 1960s, when the Third King built the first national highway, and telephone lines followed in the mid-1960s. In 1972, the Fourth King took the throne at 16 and said Gross National Happiness mattered more than Gross National Product. Television and the internet arrived together on 2 June 1999. In 2006 he stepped down, and his son, Jigme Khesar Namgyel Wangchuck, became King at 26. Bhutan held its first parliamentary elections in 2007 and 2008 and adopted its constitution in July 2008.

The current King has a consistent approach: he builds institutions first and announces plans later. DHI was set up in 2007. DHI also built a national digital ID on a public blockchain, which it calls the world’s first self-sovereign national ID. Gyalsung, the year of national service the King announced in 2019 for every 18-year-old, includes training in computers and coding.

Gelephu followed the same pattern. The King announced it on 17 December 2023 and chairs its board himself. In October 2024 he appointed Joi Ito, former director of the MIT Media Lab, to chair the Gelephu Investment and Development Corporation. The city adopted Singaporean law as its main legal framework, with its own independent judiciary. In December 2025 the King pledged up to 10,000 Bitcoin from national reserves, about USD 1 billion at the time, to help fund the city. A writer from the American Foreign Policy Council who met him noted:

“He studies AI at night.”

— American Foreign Policy Council, “Inside the King’s Mind”

The result is a single authority that can offer a tenant land, law and power together. SATO Technologies, a Canadian Bitcoin miner moving into AI data centres, with about 20 MW of hydro-powered capacity in Quebec, signed a letter of intent with the GMC Authority effective 20 June 2026. It reserves 100 MW of firm power, starts with a 5 MW first phase and sets out a path to 500 MW. Earlier, in February 2026, Japan’s trade ministry selected Highreso, a Japanese GPU cloud company, for a subsidy to study a green AI data centre in Bhutan and run a small GPU pilot. GMC is targeting more than 3 GW of data centre capacity by 2035.

For India: In India, a data centre developer deals with land, power and approvals separately, and the grid connection usually arrives last. A compute zone with one authority that can promise all three together, on a fixed timeline, would remove the two-to-three-year wait that now decides where data centres go.

Lesson 3: Plan the place around the resource

Gelephu Mindfulness City is a Special Administrative Region in Sarpang district, on the Indian border. Its masterplan, by Bjarke Ingels Group with Arup and Cistri, is built around the 35 rivers and streams that cross the site, with eleven neighbourhoods and inhabited bridges that carry public buildings across the water. Water is both the biggest risk on the site and the resource the city will sell, and the design accounts for both.

The energy plan was part of the masterplan from the start. was written for the swing between monsoon and dry-season hydro output, and it assessed large and micro hydropower, wind, solar, floating solar, geothermal and biomass. The city is meant to run entirely on renewable power.

Gelephu Mindfulness City in numbers

• Area: Over 4,000 sq km. About a tenth of Bhutan and more than five times Singapore (first presented at about 1,000 sq km, later reported as 2,500 sq km)
• Planned population: ~1 million. Residents, all on renewable power
• Core sectors: Eight. Including Green Energy and Technologies, and Finance and Digital Assets
• Airport: ~1.3 million passengers / yr by 2040. Projected to reach 5.5 million by 2065; opening due December 2029
• Bitcoin Development Pledge: Up to 10,000 BTC. From national reserves (about USD 1 billion when announced, December 2025)
• First AI compute deal: 100 MW firm power. Reserved for SATO Technologies: 5 MW first phase, path to 500 MW (letter of intent effective 20 June 2026)

For India: Put compute where the clean power is, rather than running new power lines to where compute already sits. Plan the energy mix when the zone is drawn, not after the first tenant signs. India has Himalayan hydro in the north and north-east and large solar and wind resources in the west and south. Each could anchor a compute zone designed around its own seasons.

Lesson 4: Design for the lean season

This is the lesson Bhutan is still learning, and the one India most needs. Almost all of Bhutan’s capacity is run-of-the-river, so output follows the monsoon. Bhutan has plenty of power to sell in summer and little to spare in winter.

Peak winter demand nearly tripled in four years, from 487 MW in 2021 to 1,477 MW in 2025, . In the lean season, existing plants produce only about 400 to 450 MW. Bhutan fills the gap with imports from India, which approved up to 1,200 MW for the 2025–26 winter. The ADB expects the winter deficit to exceed 1,000 MW by 2030, and the Department of Energy expects exports to stay limited until new projects come online after 2032.

Set the first AI tenant against those numbers. SATO’s 100 MW is about 7 per cent of Bhutan’s 2025 peak winter demand and close to a quarter of what its plants produce in the lean season. The 500 MW expansion would exceed everything those plants produce in the dry months.

The arithmetic: 100 MW × 8,760 h = 876 GWh a year. 876 GWh ÷ 4,357 GWh (Punatsangchhu-II’s annual output) ≈ 20%

A hydro-powered AI campus has three ways to handle winter. It can run at full capacity all year and import Indian power, which is mostly coal, so the data centre would no longer be fully green. It can reduce computing in the dry months, which lowers utilisation and weakens the investment case. Or it can wait for storage: reservoir hydro, which India and Bhutan committed in March 2024 to plan for, plus solar for the dry, clear winters. Only the third option makes the power both green and firm.

Bhutan is building toward that. About 4.5 GW of new clean capacity is now announced, financed or under construction, which would more than double today’s grid. Bhutan’s national energy policy targets 25 GW by 2040: about 20 GW of hydro and 5 GW of solar and wind.

Where Bhutan’s new green power will come from

• Sephu Solar (Solar · first utility-scale plant): 22 MWp. First phase online July 2025.
• Wobthang, Pedseling and Dramthang (Solar · ADB-financed): 310 MW. Financed June 2026.
• Reliance and DHI, Gelephu (Solar · for the city): 500 MW. Announced Oct 2024; no sign of construction yet.
• Punatsangchhu-I (Hydro · India–Bhutan): 1,200 MW. Work resumed Apr 2026, ~5 years.
• Dorjilung, Tata Power and DGPC (Hydro · World Bank Group financing): 1,125 MW. Due 2031–32.
• Wangchhu, Adani and DGPC (Hydro): 570 MW. Agreed Sep 2025.
• Chamkharchhu-I, Adani and DGPC (Hydro · run-of-the-river, peaking): 770 MW. Signed Oct 2026; building from 2027.

Table of Bhutan’s green power pipeline with project sizes and status

Most of this new hydro is run-of-the-river and arrives after 2030, so winter stays tight until reservoirs or storage are built. Solar helps in the dry season but stops at night. Firm green power needs all three pieces: generation, storage and a load that can bend.

For India: India’s renewables have their own lean periods: solar at night, wind and hydro by season. A green data centre zone in India should be sized to its worst month, not its average one, and should pair generation with storage before the first tenant is promised firm power. Bhutan shows what happens when demand grows faster than storage.

Lesson 5: Make the computing flexible

The cheapest storage is a job that can wait. Deloitte predicts that inference will make up about two-thirds of AI computing in 2026, and inference works best close to its users. It has to run every hour. Training and evaluation runs can be paused and moved to the months when the rivers are full.

That needs scheduling software. An agent checks inflow forecasts and the Indian exchange price every 15 minutes, then decides which jobs run now and which wait for the monsoon. Getting the split right, and pricing it so tenants accept it, is what gives a data centre an honest green claim.

This is the kind of problem we work on every day at CosX: operations-heavy systems where decisions change every few minutes and a human cannot approve each one. We see the same pattern in EV charging, where prices and charger availability change by the minute.

For India: Offer two kinds of power in green compute zones: firm power for inference at one price, and flexible power for batch work at a lower price that follows the sun, wind or water. A tenant who lets the grid decide when training runs should pay less than one who needs every hour.

Lesson 6: Tie every megawatt to jobs

Gelephu’s other purpose is to keep young people in Bhutan. World Bank data shows monthly departures through Paro airport rose from under 500 before the pandemic to more than 5,000 by early 2023. The number of Bhutanese migrants in Australia more than doubled, from 12,424 in 2020 to 25,363 in 2024. Youth unemployment was 28.6 per cent in 2022 and 15.9 per cent in 2023, still more than four times the overall rate. The Prime Minister has called the exodus an existential crisis.

• 10× monthly departures via Paro, from under 500 to over 5,000 (early 2023)

A data centre uses a lot of power but employs few people. Gross National Happiness puts wellbeing ahead of growth, so every megawatt sold to a GPU tenant needs to come with engineering work: operations, scheduling, model work and the software around it. Otherwise Bhutan sells the power but keeps little of the work.

For India: When a state offers land and power to a data centre, it can ask for local operations and engineering teams in return. Compute zones near rural generation sites could keep skilled jobs in those regions, instead of exporting both the power and the people.

What India can take from Gelephu

Gelephu is small today. The only confirmed build is SATO’s 5 MW first phase, under a letter of intent that is not yet a contract. GMC’s 3 GW target for 2035 roughly equals everything Bhutan generates now. And India’s projected 12 GW of data centres by 2030 is more than three times Bhutan’s whole grid.

So Gelephu can serve as an overflow site for Indian compute, not the main one. Its value to India is the template. Here is what I would take from it:

• Decide what surplus clean power is for. Map where it is, and turn it into products, not only exports.
• Create one authority per compute zone. Promise land, firm power and approvals together, on a fixed timeline.
• Put compute next to clean generation. Plan the energy mix when the zone is drawn.
• Size firm power to the worst month. Pair hydro, solar and wind with storage before promising firm supply.
• Price flexibility. Charge less for batch work that follows the resource, and build the scheduling software to run it.
• Write jobs into the deal. Every megawatt should come with local engineering work.
• Build it with Bhutan. Shared reservoir projects and cross-border compute help both countries through the lean season.

Two things are still unclear: what tariff Bhutan will charge compute tenants, and whether SATO’s letter of intent becomes a contract by June 2027. I will be watching both. If you are planning AI capacity for Indian users, Gelephu belongs on your shortlist, provided the contract spells out what happens in winter. And if you are planning India’s own compute zones, start where Bhutan started: with the river.

Frequently asked questions

What is Gelephu Mindfulness City?

Gelephu Mindfulness City (GMC) is a Special Administrative Region in Sarpang district, southern Bhutan, on the border with Assam. Announced by the King of Bhutan on 17 December 2023, it has its own legal framework based on Singaporean law, an independent judiciary, and a masterplan by Bjarke Ingels Group built around 35 rivers. It plans to run entirely on renewable power and targets more than 3 GW of data centre capacity by 2035.

How big is the AI data centre planned in Gelephu?

The first deal is a letter of intent with SATO Technologies, effective 20 June 2026. It reserves 100 MW of firm hydro power, starts with a 5 MW first phase and sets out a path to 500 MW. It is not yet a binding contract; final agreements are due within 12 months.

Can Bhutan power AI data centres with green energy all year?

Not yet. About 99% of Bhutan’s electricity is hydropower, mostly run-of-the-river. Peak winter demand reached 1,477 MW in 2025 while lean-season generation is about 400 to 450 MW, so Bhutan imports power from India in winter. About 4.5 GW of new hydro and solar is planned, mostly after 2030. Firm, round-the-clock green power will need reservoir hydro or storage.

Why is power the main constraint for AI data centres in India?

Wood Mackenzie expects India’s data centre capacity to grow from 2.2 GW in 2025 to 12 GW by 2030 and names firm, round-the-clock power as the main constraint, ahead of land and capital. In hubs such as Navi Mumbai, a grid connection for a large data centre can take two to three years, and coal still produced about 71% of India’s electricity in 2025.

What can India learn from Gelephu?

Six lessons: treat clean power as a product, not just an export; build institutions before investors arrive; plan compute zones around the clean resource; size firm power to the worst month and add storage; price flexible computing so batch work follows the resource; and tie every megawatt to local engineering jobs.

Who is SATO Technologies?

SATO Technologies, formerly Canada Computational Unlimited, is a Canadian Bitcoin mining company listed on the TSX Venture Exchange, with a 20 MW hydro-powered site in Quebec. It is moving into AI data centres and signed the first AI compute letter of intent with the Gelephu Mindfulness City Authority in June 2026.

Sources

• : 36-month grid backlog in Navi Mumbai, 18-month queue for 100 MVA connections in Maharashtra, transmission lagging demand by up to two years
• IEA, Energy and AI, executive summary: 415 TWh to 945 TWh; a typical AI-focused data centre uses as much as 100,000 households
• Indian Infrastructure on Wood Mackenzie India data centre report, July 2026: 2.2 GW to 12 GW, power as main constraint
• IANS: AI-dedicated capacity 275 MW to 6,546 MW
• The Wire on Deloitte state grid pressure: 2 to 3 GW peak per state by 2030
• Ember, India: coal about 71% of generation in 2025
• : inference about two-thirds of AI compute in 2026
• Arab News on Punatsangchhu-II: 99 per cent hydro share
• Embassy of India, Thimphu, hydropower projects: ~3,490 MW capacity, Punatsangchhu-II commissioning
• IDSA on India-Bhutan hydropower: Chukha 1986 to 1988, climate risk
• World Bank / IMF: hydropower at about 12.5% of GDP
• Kuensel via ANN: 8.52% GDP growth in 2025, electricity sector growth
• The Bhutanese: Punatsangchhu-II tariff protocol signed April 2026; Punatsangchhu-II 4,357 million units a year
• Decrypt on Bhutan’s Bitcoin holdings: mining since April 2019, fourth-largest government holder; 10,000 BTC pledge
• Arkham Intelligence research: over 13,000 BTC
• DCD on the SATO deal, July 2026, and Cointelegraph, January 2025: GMC on Bitcoin as a battery for surplus hydro
• : 100 MW at Gedu and 500 MW at Jigmeling, Bhutan; BBS on Jigmeling in Sarpang
• Jigme Khesar Namgyel Wangchuck and Jigme Singye Wangchuck, Wikipedia: accession, abdication, constitution, coronation, Gyalsung
• CBS 60 Minutes on Gross National Happiness: the Fourth King’s GNH remark
• SAGE Encyclopedia of Mass Media and BICMA telecom history: highway, telephone lines, 1999 television and internet
• The Bhutanese, DHI confirms digital asset mining: self-sovereign national digital ID
• GMC, Royal Address on Gelephu Mindfulness City: 17 December 2023
• The Bhutanese, Meet GMC’s new CEO, Governor and Board, October 2024: the King as board chair, Joi Ito as GIDC chair
• Daily Bhutan: GMC leadership and Singaporean law
• American Foreign Policy Council, Inside the King’s Mind: “He studies AI at night”
• : 100 MW firm power, 5 MW first phase, 500 MW path
• SATO Technologies Q1 2026 results and Bitcoin Treasuries: 20 MW Center One site in Quebec, AI data centre plans
• PR Times, February 2026: Highreso selected for a Japan trade ministry subsidy for a green AI data centre study in Bhutan
• The Bhutanese on GMCA and SATO: 3 GW data centre target by 2035
• National Energy Policy 2025, via pv magazine and Daily Bhutan: 25 GW by 2040, about 20 GW hydro and 5 GW solar and wind
• and Wikipedia: area, core sectors, renewable-only power
• ASLA and BIG on the masterplan: 35 rivers, inhabited bridges, BIG, Arup, Cistri
• : energy strategy for seasonal hydro
• BIG, Gelephu International Airport: 1.3 million passengers by 2040, 5.5 million by 2065
• : peak winter demand 487 MW (2021) to 1,477 MW (2025), deficit above 1,000 MW by 2030
• The Bhutanese on winter demand and imports: 400 to 450 MW lean-season generation, 1,200 MW import approval for 2025–26
• Kuensel via ANN, November 2025: exports constrained until after 2032
• Embassy of India, Joint Vision Statement on Energy Partnership, March 2024: reservoir hydro projects
• : 1,125 MW, completion by 2032
• : work resumed April 2026
• : 770 MW, construction from 2027; Wangchhu 570 MW
• : 500 MW solar in Gelephu
• pv magazine, July 2025: Sephu, Bhutan’s first utility-scale solar plant
• World Bank, Migration Dynamics in Bhutan: departures, Australia migrant numbers, student enrolments
• NSB Labour Force Surveys via ANN: youth unemployment 28.6% (2022) and 15.9% (2023)
• CBS News, November 2024: the Prime Minister on an existential crisis

Photo credits

• Paro valley: Abhijit Kar Gupta, “The view of Paro Valley”, CC BY 2.0
• Punakha Dzong: Bernard Gagnon, “Punakha Dzong, Bhutan 05”, CC BY-SA 4.0
• Tala dedication: Prime Minister’s Office, India, GODL-India
• Gelephu: MoutainBoy, “View of mountains from Gelephu”, CC BY-SA 4.0
• Trongsa dam site: Gerd Eichmann, “Trongsa-Dammbau-02-2015”, CC BY-SA 4.0
• All via Wikimedia Commons. Images were resized and cropped for this page.

CosX · AI, Green Energy and Bhutan