REPORT #369 August 2000

Produced by the Belize Development Trust

Bagasse co-generation has been in the media recently, with BSI the sugar factory sitting on waste cane products that could be turned into cash for sale to the local electrical power grid as a private supplier. The problem is, that BSI already runs an obsolete sugar factory.

They also want a quasi-monopoly contract in future electrical sales, in order to make more money before they upgrade their factory. After due consideration, one cannot understand the reasoning for asking for an exclusive contract? At least not from a profit/loss speculation viewpoint. BEL will buy all they can produce. The price is set by a formula the government has, that is below local production costs by BEL. So why the contract request? A contract would be a quasi monopoly prohibiting, or hindering future other electrical generating investors during the 20 year period. Maybe that is the reason? Cut any future competition off at the knees before they start? It is a sort of blackmail, but investment shouldn't be this way with a small government.

According to our contributing engineer in this field, they propose not to use modern equipment, but obsolete second hand equipment to cut costs. The problem is pollution. Adding scrubbing filters will increase the costs of installation by a third it is said and maybe cost more than brand new modern clean equipment in the end. This claim by our engineer has a ring of truth to it, I know from various personal experiences doing the same thing through the years. For instance in my field, it is cheaper to build a new sailboat than fix a new one for the owner. True, you can fix an old sailboat, but the maintainance will kill you over ten years, whereas a new built one, will cost 40% more, but give you ten free maintainance years. Costs more in the beginning, but comes out cheaper in the long run. Nor does the obsolete equipment handle alternative fuels, it is said. The bagasse, or cane industry collapses; the co-generation plant will be one more mass of machinery rusting in the tropical sun, overgrown by jungle.

The production of bagasse produced electricity is only half a year. This is during the dry season. From the viewpoint of BEL, or the government this is a good thing! Because a bunch of idiots who negotiated the Mollejon hydro Dam did so in a rush without proper water studies and it does not produce much electricity in the dry season. ( The idiots are still running the government and haven't learned from the experience either!)

Adding scrubbing pollution filters to obsolete recommended equipment apparently reduces efficiency output of electricity too, our engineer claims.

The old equipment is going to be maintainance intensive. (Expensive in labor costs )

Alternative fuels could be Eucalyptus tree plantations with 3 year cycles ) is one suggestion.

It is a BSI cogeneration speculation investment. I believe they should be allowed to put whatever they want, so long as it does not pollute. The costs and risks are theirs. They know what they can afford. On the other hand, I would not give them a quasi-monopoly 20 year contract. There is no need! The demand is wide open for electricity. What would be the point, other than eliminating competitors and the government wants private competitors and so does BEL. Cheaper electricity from competition is a boost for everybody including the consumer. From a consumer, or government standpoint, there is only one advantage to the BSI project. That is breaking the stalemate on a previous monopolized state produced electricity and proving that private producers can do it and make a profit. Now if we could harness some of that political rhetoric hot air up in Belmopan, or in the port Belize City, maybe that would produce electricity at low cost? Belmopan could have it's own turbine generator with a tube for hot air running to the cabinet offices?

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