Number one job of the next government – Energy

Some of you may disagree and you have every right to do that. You may argue that Bangladesh is a poor country; people do not have the very basic of enough food, shelter. However I think the biggest catalyst for Bangladesh to infuse job creation and tap the enormous recourses of man power is energy. Energy should be the task one for the new government sworn in January 2009.
Analyze Bangladesh’s greatest achievements’:

Although agriculture and local industry contributed into the national economy and the quality of life; however two biggest foreign exchange earners are Garments and Wage earners. The contribution of these two sectors in our economy is phenomenal. They directly and indirectly created abundant jobs and purchase power. These two created enough liquidity to infuse local bossiness such that money gets circulated and overall national quality of life improved. All these happened due to global free market economy and because of the private sectors entrepreneurs’ who taped into the opportunity. However there is a lot of room to grow if we could improve “time to market” bottlenecks.

The same thing happens for India. India developed a maga project to computer literate one million Indian during 80s. With their English language skills along with computer literacy, the west seizes the opportunity of more profit margins employing the low wage Indian programmer. Indian kept the customer satisfied and business keep on returning.

Today’s global competition knows no limit. Due to the internet, consumers are well informed and want the best product sooner and cheaper. Bangladesh is almost in the lowest rank of the value chain in RMG; hence could not charge more than the minimum. Several factors are in play. I believe, the worst enemy is RMG’s inability to cope with the “time to market” philosophy.

Buyers have to channel only those products to Bangladesh which are less time sensitive and hence have very low margin. Continuous power supply or the cost of onsite power generation and political instability causing seamless transportation discourage buyer to send those high value and high margin product to Bangladesh to process. To get an edge, you not only have to satisfy the factory but support the infrastructure that works hand in hand with the factory.

Look at an example. When Vietnam asked Intel Corporation to setup a sort and assembly plant, Intel Corporation asked for a continuous supply of electricity and a large parcel of land. What Vietnamese government has done is more than what Intel Corporation asked for. They not only supply uninterrupted electricity; but build new roads to the facility, new bus service to the facility from major cities.

What these incentives did for Intel? A satisfied customer, who tripled the investment from 300M factory to USD$ 1B facility along with thousands of high paying Vietnamese’ job. A year later, couple of dozen high Tech company joined Intel’s lead. That is how you earn global business. This gives you a picture of how competitive today’s global business is. We have no choice; but have to be an active competitive member of the flat world. In economic downturn everybody focuses on core competency.

RMG and Man Power are our core competency. To utilize their full potential, we have to increase our electric energy production from 4 GW to 7 GW (7000 MWatt) ASAP. Otherwise your dream for digital country will be only a fairytale.


How can you increase production ?

The energy options you have are: coal, natural gas, petroleum, renewable, hydro and nuclear. You can not depend of imported Oil for all your needs. Look at the graph below on oil consuming countries and their per capita income.

[Courtesy of Andrews and Jelley]


Do you think you can compete with them for all your oil consumption need? You have to find other sources of energy. Grameen Sakti introduced some solar alternative. They are expensive; but may be useful for individual needs.

You may think about wind energy. You have to be little cautious here. Recently in Kutobdia island PDB spent 9 crore Taka to install tiny 50 windmills to generate a max of 1 MW electricity. This is a good start.

Moving forward we may ask help from the leading wind power generating countries. We have to take initiatives to energize pro-business diplomacy.

Let me show you the following graph where you can see the countries took bold initiatives to adopt wind energy. For example Germany is done with wind energy. This country max out the limit. Germany installed wind turbine every possible place to rip the benefit of clean electricity through out the country.



[Courtesy of wwea.org]

Wind Turbine Technology:
A paradigm shift in power generation: The growth of power generation capacity from wind turbine show in this picture for your amusement.

[Courtesy of Vestas.com]

This world's biggest wind turbine generator is currently undergoing testing in the North Sea 15 miles off the East coast of Scotland near the Beatrice Oil Field. This is the first time these enormous offshore wind turbines have actually been tested offshore, and the first time any wind turbine generator has been assembled in such deep water - 44 metres deep. Assembly took place in August 2006.

The German RePower turbines have a power output of 5 Megawatts with a rotor blade diameter of 126 metres sweeping an area of over 12,000 square metres. Maximum power output is achieved at around 30 mph, but a couple of MW are generated even in a fresh breeze. Rotors start turning at around 7 mph, and are automatically braked at 70mph.

We have a good diplomatic relationship with Germany, can we ask them to build operate and sell to this energy hungry country?


What Bangladesh can do immediately?

Coal power plant. We have to be realistic and use our natural recourses. I visited a coal field in Barapukuria couple of years back. We have to approve a plan to generate 1000 MW from the coal of this mine. Currently at the mine mouth 250 MW electricity is being hardly produced. Need to investigate why it is failing to run full capacity. If they can not run it, find a capable company. Let us not waste our limited natural resources with inefficient operation.

Phulbari was a mess. We aught to communicate transparently. Transparency is good for both the business that gets the deal and the government that handles the deal. Phulbari may be a failed example that we can learn from.

Country first is the motto that we should adopt. There will be thousands of people who will be affected and need to relocate to get the natural resources; however the wealth should be distributed in a fair, win-win agreement. The new businesses that the new plant would bring into the community will benefit everybody in that locality one way or other.

The country owns the natural resources underneath its land; not the owner of the land; hence we have an obligation to properly communicate that to the landowners. Landowners should be enthusiastic about the prospect of the overall development that a new industry brings to the area. Due to the secrecy and under the table deals in a non transparent manner, I bet landowners are suspicious and hence the tragedy.

I live in Oregon and Oregon gets 71% of its electricity from Hydroelectric and 21% from natural gas. The cost is 6.63 cents per kwh. There are four dams in Columbia river. McNary Dam, John Day Dam, The Dalles Dam and my nearest Bonneville Dam to generate hydroelectricity of ~6000 MW. These are not the biggest one here in Columbia river. My neighboring state Washington has Grand Coulee Dam on the Columbia river, which could have meet the total electricity need of Bangladesh with its 6809 MW capacity.

Total Hydroelectric generating capacity in Colunbia river alone is 24, 149 MW of electricity.

However, Indiana, Ohio, Kentucky, and North Dakota almost all the power comes from coal. You think coal is old. As you can see in the chart below, about 50% energy comes from coal in USA.

With Barak Obama’s leadership there will be five million new jobs in USA for the clean energy or alternative energy. There will be a “race to the moon” kind of innovation and research. We may pursue a partnership towards clean coal technology.

I believe a presence of US business in North Bangal is strategically very important. It will give a first hand experience to the USA on seasonal flooding and drought caused by the international rivers. This will give a free global media coverage on any injustices that are systematic in that zone.

I insist the energy ministry to take immediate action to formulate a scheme to “build operate and sell” of 1000 MW coal power electricity generating plant in Phulbari. Electricity in USA and in Bangladesh is almost same cost. I pay 6 cents KWH and my father pays 7-8 taka in Bangladesh. There should not be any scope for stealing in power generation in this age.

In summery, there will be 1000 MW from Barapukuria and 1000 MW from Phulbari to meet the immediate need of additional 2000 MW electricity for the nation. The other 1000 MW can come from natural gas, wind turbine, oil and productivity increase of the existing facilities.

For future growth, a nuclear plant in North Bangal jointly with India may be feasible. High level talk’s between the new government of Bangladesh and the Obama’s administration may bring this agenda for discussion in the near future. Obviously if it is owned and operated by USA, that would be preferable.


In conclusion:

I do not know how much productivity loss we write off each year due to power outages. Somebody should do a study on that and place it to the energy department. The human suffering, demoralize employee and heartbreak of the industrialists loosing competition due to disruptive power failure may be very hard to quantify. Not to mention the pain and suffering of students, children and frustration of parents for their inability to provide comfort to the loved one due to unpredictable power outage and load shedding.

We should search for more natural gas and coal. Although, there is a slim chance of getting more petroleum, we should pursue every bit of natural recourses that we get of. Strong diplomacy needed to resolve the technological learning curve.

Bangladesh solved the food problem, garment industry boom solved our clothing needs, and we are still working on shelter, primary education is work in progress. Time to address the electricity need of the country. Electricity is a basic human right of 21st century; not the cell phone or internet. If I have to prioritize then I would always pick an uninterrupted supply of electricity. Electricity brings predictability and confidence, which are key to stay competitive.

We need a visionary here, who can see through the hurdle of electricity generation. The one who could envision what uninterrupted electricity can bring to the economy, productivity and quality of life and happiness of the people of Bangladesh.

With the all cry and complain about global warming may discourage the law maker as well as the government to use coal to produce electricity; however you need electricity to grow the economy and a strong economy could only address the global warming issues and empower diplomacy. Nobody is suffering more than Bangladesh by global warming; however economy is top priority and you may trade off global warming with economy. Energy is your number one job. Make no mistake about it, country comes first.