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Dhaka Tribune

Why darkness is more expensive than light

Are the frequent load sheddings costing us more than they are saving?

Update : 31 Oct 2022, 12:39 AM

Electricity has long been a driving force behind advancements in manufacturing, social progress, and the medical sciences, and its significance is only expected to grow for Bangladesh. Since electricity is so widely used in end-user sectors, such as transportation and in-home climate control, it has become ever more important for the global energy infrastructure.

Electricity is crucial to a country's economic growth as well. It is what keeps the world turning, literally. The infrastructural foundations of a country are the engines that propel its people and their endeavours forward, as no nation can survive without the efforts of its workforce, and electricity is the single most crucial amenity that makes so much of that work possible in the first place. 

Since July, Bangladesh has been witnessing regular load-sheddings as authorities have instituted area-wide blackouts to prevent interruptions in production-oriented operations primarily due to a lack of electricity supply and a mismatch in demand and production. In addition, the government has mandated a 25% decrease in electricity consumption within government offices and the relocation of all meetings to virtual platforms after 8:00pm.

The average daily production was 12,000MW, while the average daily demand was between 14,000 and 15,000. At the same time, on October 4, a power outage in Bangladesh left 75 to 80% of the country without electricity for hours, affecting more than 130 million people. It made the electricity situation in Bangladesh even worse, especially considering how businesses increasingly face the challenge of dealing with regular power outages to begin with. 

The following are a few reasons why electricity interruption is really bad and expensive for Bangladesh:

Data centres and the freelancing sector are interrupted

Data centre facilities are used by a wide variety of businesses to store and manage their data. When they are unavailable, many companies that rely on them for critical data storage are negatively affected, and potentially expensive infrastructure is damaged.

The power crisis has caused unscheduled delays and a freelancer image crisis with employers. With poor internet connections, no backup workstations, and long power outages, freelancers outside Dhaka have it even worse. The Oxford Internet Institute found that Bangladesh is the second-largest online labour seller, behind India, with a global market share of 16% in 2022. The Information and Communication Technology Division reported that 650,000 Bangladeshis earn over $100 million as freelancers. 

The manufacturing sector is shaking

Even momentary power fluctuations can have a significant effect on manufacturing operations. Electric surges can occur when power is restored, which is especially problematic for manufacturers because of the high costs and difficulties of repairing essential equipment. Power failure at a factory that produces in bulk can cause problems throughout the supply chain once shipping and receiving grind to a halt. Truck drivers and other modes of transportation may need to wait for or rearrange their schedules. When the power goes out, essential equipment such as elevators, cold storage, and air conditioners can get damaged rendering them inoperable for several days. 

The ministry and sectoral entrepreneurs say leather and leather-based products are important to the economy. This sector employs six lakh people directly and three lakh people indirectly. It contributes 4% of exports and 0.5% of the GDP. More than two times a day, the electricity interruption increased its cost by 10-15%, compounding its problems. The Export Promotion Bureau reported that, in September, RMG exports from Bangladesh dropped by 7.52%, the first monthly export decline in 13 months. Experts and exporters are predicting a continued decline due to production disruptions.

The retail sector is struggling

When businesses are unable to serve their customers effectively, visitors who experience an interruption may leave with negative impressions and be less likely to return. Consider a single supermarket -- a power outage could cause hundreds of thousands of dollars in losses due to the spoilage of perishable goods caused by a lack of refrigeration.

The healthcare sector is hemorrhaging: The power in hospitals must be reliable around-the-clock, every day of the year, as people's very lives depend on it. Because of this, hospitals are mandated to have backup systems, typically diesel generators, to keep vital equipment running even during power outages. Hospitals are having trouble providing electricity due to rising fuel prices.

Educational institutes are having difficulties

When campus power goes out, it can disrupt essential IT services and data storage. Due to disruptions in campus wireless networks, all online and in-person classes that rely on the internet or digital programs are put on hold. Three to five hours of load shedding can be seen regularly in esteemed universities such as DU and NSU, as both students and educators are having to grapple with this issue.

Our agriculture sector is wilting

In places with better electricity, there is more good production and better preservation. In these kinds of places, agriculture is quite productive because electricity can be used to power irrigation, food storage, and seed storage. They make it easier for the country to keep agricultural products from going to waste by giving them places to store them. For more than 165 million people in Bangladesh, producing enough food is really tough if we do not have proper electricity facilities.

Investors are going away

Electricity is critical to a country's economic growth because it attracts foreign investment. Investors prefer to set up shop in a country with reliable access to electricity because the cost of production is lower there. The availability of reliable electricity raises the living standards of the country's citizens. As our country is having load-shedding issues, some investors may not consider this country for their projects. 

Bangladesh's competitive market, relatively business-friendly environment, and cost structure will maximize returns, especially seeing how Bangladesh has the region's lowest energy prices. Bangladesh has export-focused industrial zones with infrastructure and logistical support for foreign investors while new economic zones are being built. To boost business, roads, highways, surface transport, and ports are being upgraded.

Energy prices and load shedding increase interruption costs and undo established progress. If the government doesn't fix the energy situation quickly, Bangladesh will continue to suffer. Even if the government ends up paying more for energy, that will result in factories operating efficiently and maintaining a good reputation abroad. At the end of the day, darkness may end up costing us more than keeping the lights on a little longer.


Mahadi Hassan is a finance graduate.

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