Somalia and especially Somali industry needs electricity more than anything else.
Sick of hearing about oil reserves when it's at least a decade away and in an age of cheaper electric vehicles.
How much of that oil would be used to power Somali industry?
100% of it would be exported and we'd be forced to import refined fuel to power our used cars and non existent factories just like Nigeria.
First law of economics:
The more power you have, the more work you can produce.
Give us cheap power and we'd be able to refine cheap ores into metals and then finished goods we could export.
I'm not an expert in economics but it's seem pretty obvious to me that the biggest resources of value we have in Somalia are it's manpower and the ores we have under our feet.
However, in order to use them we'd need a lot of power to turn them into useful economic work.
Millions of ton of bauxite under our feet is worth nothing if we don't have the power to turn it into aluminum.
If we don't have the power then we'd be forced to spend foreign currency to import it and steel, cement and etc.
However to get foreign currency we'd need to sell our raw resources for cheap.
The more we want to develop our country; the more we need to sell off to gain the foreign currency needed for it.
It would be a endless sinkhole of selling anything of real value in return for foreign currency.
However, with cheap electricity we could flip that sinkhole around and start gaining value like most first world countries.
Turn those millions of tons of bauxite into finished goods worth tens of billions instead of the cents we'd sell them for.
Question is what would be the best way to generate a lot of power in Somalia quickly?
Here are our options:
Solar
Solar is out of the picture because we don't have the capacity to build it ourselves.
Importing it is too expensive & so are the batteries we need for it.
Sure, we could scrape together a solar panel factory with enough ingenuity but we won't be able to compete against the mega factories in China and Germany atm.
Thermal Power Plants
Thermal power plants take too long to build and we'd need to spend foreign currency to bring in the skills to build an efficient plant.
We'd have to keep spending foreign currency for fuel and to maintain it.
So that's a no as well.
The only option available is to build wind turbines domestically.
Wind Power
We have most the materials needed available in Somalia and the biggest costs are manpower.
The biggest plus is that we don't need to import any fuel and hence save on our foreign currency reserves.
Also, it's super scalable and could reach all our towns and villages without the need for thousands of miles of transmission infrastructure.
A single small wind turbine could power a village and ten large turbines could power a small town.
80% of Somalis live in small towns/villages and won't move to bigger towns anytime soon (resources they need aren't in large cities).
Large coal plants would only be viable in the largest cities... So no development in most of the country.
Wind turbines costs around a million USD per MW and they're getting cheaper due to automation and better materials.
That's comparable to most other thermal power plants but provides much more flexibility and we'd save on fuel costs.
Intermittence and storage issues could easily get solved cheaply.
Even if we build it inefficiently at 2 million USD per MW we'd still be able to produce it profitably.
A 5 million USD 5 MW turbine would produce around 20 GWh of power per year.
At $0.10/kWh "African" industrial rates it could bring in over 30% returns per year for it's investors.
30% annual returns is pretty hard to find
That same turbine could produce 20 million USD in economic output as well... Producing decent incomes for thousands of Somalis.
Since we don't do savings or bonds; these would be the best ways for Somali households to save & grow money...
This is how wealth gets built.
100,000 Somalis investing 10k could bring in over 1 GWh of capacity and train & hire 10's of thousands of Somalis in high tech fields.
1 GWh of power could power an economic output of over 30 billion USD and in turn provide incomes for millions of Somalis directly or indirectly.
Not to mention the FDI and further Somali investors that would come pouring in to the only country in East Africa able to quickly scale it's power capacity up.
We don't even need government funds for this (Somali or foreign).
Just someone to fund the initial research on how to build wind turbines economically using domestic resources and how to scale up production of it to hundreds per year.
After that, build a small factory and produce a small amount to proof to Somali investors that it's actually viable.
Government guarantees could help here to ensure investors don't get 100% screwed but the best thing they could do is to create basic contract laws.
Producing our own power is the only way we'll be able to build a strong economy.
Let me know if there's a better and faster way to increase our electricity generation capacity to GWs.
Don't see the world Bank or Europe giving us billions for this and Somali investors won't invest in a single large power plant project.
However, I could easily see them invest in smaller projects to power their own clan fiefdoms or specific factories.
Let's not forget the wind potential we have in Somalia:
All I see hundreds of billions of dollars in cheap power.
If we could make proper use of this we could easily become Africa's manufacturing capital.
This plan could have us produce billions of dollars in value before the first gallon of oil gets exported out of Somalia.
Global funds and investors are dying for projects like this and we could easily kick-start this with Somali money.
Sick of hearing about oil reserves when it's at least a decade away and in an age of cheaper electric vehicles.
How much of that oil would be used to power Somali industry?
100% of it would be exported and we'd be forced to import refined fuel to power our used cars and non existent factories just like Nigeria.
First law of economics:
The more power you have, the more work you can produce.
Give us cheap power and we'd be able to refine cheap ores into metals and then finished goods we could export.
I'm not an expert in economics but it's seem pretty obvious to me that the biggest resources of value we have in Somalia are it's manpower and the ores we have under our feet.
However, in order to use them we'd need a lot of power to turn them into useful economic work.
Millions of ton of bauxite under our feet is worth nothing if we don't have the power to turn it into aluminum.
If we don't have the power then we'd be forced to spend foreign currency to import it and steel, cement and etc.
However to get foreign currency we'd need to sell our raw resources for cheap.
The more we want to develop our country; the more we need to sell off to gain the foreign currency needed for it.
It would be a endless sinkhole of selling anything of real value in return for foreign currency.
However, with cheap electricity we could flip that sinkhole around and start gaining value like most first world countries.
Turn those millions of tons of bauxite into finished goods worth tens of billions instead of the cents we'd sell them for.
Question is what would be the best way to generate a lot of power in Somalia quickly?
Here are our options:
- Solar
- Thermal Power Plant (coal, diesel, natural gas)
- Wind
Solar
Solar is out of the picture because we don't have the capacity to build it ourselves.
Importing it is too expensive & so are the batteries we need for it.
Sure, we could scrape together a solar panel factory with enough ingenuity but we won't be able to compete against the mega factories in China and Germany atm.
Thermal Power Plants
Thermal power plants take too long to build and we'd need to spend foreign currency to bring in the skills to build an efficient plant.
We'd have to keep spending foreign currency for fuel and to maintain it.
So that's a no as well.
The only option available is to build wind turbines domestically.
Wind Power
We have most the materials needed available in Somalia and the biggest costs are manpower.
The biggest plus is that we don't need to import any fuel and hence save on our foreign currency reserves.
Also, it's super scalable and could reach all our towns and villages without the need for thousands of miles of transmission infrastructure.
A single small wind turbine could power a village and ten large turbines could power a small town.
80% of Somalis live in small towns/villages and won't move to bigger towns anytime soon (resources they need aren't in large cities).
Large coal plants would only be viable in the largest cities... So no development in most of the country.
Wind turbines costs around a million USD per MW and they're getting cheaper due to automation and better materials.
That's comparable to most other thermal power plants but provides much more flexibility and we'd save on fuel costs.
Intermittence and storage issues could easily get solved cheaply.
Even if we build it inefficiently at 2 million USD per MW we'd still be able to produce it profitably.
A 5 million USD 5 MW turbine would produce around 20 GWh of power per year.
At $0.10/kWh "African" industrial rates it could bring in over 30% returns per year for it's investors.
30% annual returns is pretty hard to find
That same turbine could produce 20 million USD in economic output as well... Producing decent incomes for thousands of Somalis.
Since we don't do savings or bonds; these would be the best ways for Somali households to save & grow money...
This is how wealth gets built.
100,000 Somalis investing 10k could bring in over 1 GWh of capacity and train & hire 10's of thousands of Somalis in high tech fields.
1 GWh of power could power an economic output of over 30 billion USD and in turn provide incomes for millions of Somalis directly or indirectly.
Not to mention the FDI and further Somali investors that would come pouring in to the only country in East Africa able to quickly scale it's power capacity up.
We don't even need government funds for this (Somali or foreign).
Just someone to fund the initial research on how to build wind turbines economically using domestic resources and how to scale up production of it to hundreds per year.
After that, build a small factory and produce a small amount to proof to Somali investors that it's actually viable.
Government guarantees could help here to ensure investors don't get 100% screwed but the best thing they could do is to create basic contract laws.
Producing our own power is the only way we'll be able to build a strong economy.
Let me know if there's a better and faster way to increase our electricity generation capacity to GWs.
Don't see the world Bank or Europe giving us billions for this and Somali investors won't invest in a single large power plant project.
However, I could easily see them invest in smaller projects to power their own clan fiefdoms or specific factories.
Let's not forget the wind potential we have in Somalia:
All I see hundreds of billions of dollars in cheap power.
If we could make proper use of this we could easily become Africa's manufacturing capital.
This plan could have us produce billions of dollars in value before the first gallon of oil gets exported out of Somalia.
Global funds and investors are dying for projects like this and we could easily kick-start this with Somali money.
