A Case for Distributed Power Systems in Southeast Asia

The observed inadequacy in the region’s current electricity infrastructure have prompted Southeast Asian countries to find power solutions in various forms of distributed power generation

Rapid economic development, a continuous growth in population, and increased domestic and foreign investments across key industries have all contributed to the remarkable increase in Southeast Asia’s power consumption in recent years. The region’s power demand has risen by 2.5 times in the past 20 years, and by 2040, Southeast Asia’s electricity requirements is likely to triple, for which an additional power generation capacity of approximately 400 GW is said to be required.

Courtesy www.gineersnow.com

In the interest of maintaining a healthy economy and attracting further foreign investment and activities, countries in Southeast Asia have ramped up their spending in infrastructure, including in roads, railways, and residential and commercial facilities. This, among other factors, has caused the region’s power demand to exponentially expand. And while Southeast Asian governments and allied stakeholders are also funding the building of new or the refurbishment of existing power facilities to support long-term electricity requirements, the current shortage in power supply within the region, not helped by constrained transmission and distribution facilities, is making it challenging to satisfy the immediate electricity demand.

The observed inadequacy in the current power infrastructure, delays in the construction of permanent power generation facilities, and the heightened need to fulfill the region’s immediate power requirements have prompted Southeast Asian countries to find solutions in distributed power generation. 

Distributed Power Generation in Southeast Asia

According to global research and consulting firm Frost and Sullivan, the overall installed capacity of the distributed power generation market in Southeast Asia is in the area of 20,450 MW in 2015, which can scale up to 34,747 MW by 2020.

Among the countries in Southeast Asia, the Philippines, Indonesia, Myanmar, Thailand and Vietnam are considered to be high-potential territories for distributed power based on market potential and available resources. For instance, in the Philippines and Indonesia, distributed power generation facilities can rapidly bring power to provinces that are currently not connected to the countries’ national grids due to isolation and remoteness. While in Myanmar, distributed power generation systems can provide electricity to smaller load centers, considering that the country’s overall electrification rate is only 26% and the transmission line losses stands at 25%.

Moreover, more than 60% of the land in Thailand, Myanmar and Vietnam are greatly suitable for large-scale solar farms, with substantial irradiance levels between 1,200 kWh/m2/year and 2,000 kWh/m2/year. Overall, Southeast Asia is touted to have an annual global horizontal irradiance ranging from 1,200 kWh/m2 to 1,800 kWh/m2, making the region highly ideal for developing solar power plants.

Key Types of Distributed Power Systems Installed in Southeast Asia

The key types of distributed power facilities installed in the region include biomass and waste-to-power, solar photovoltaic, and diesel/HFO/gas temporary rental power plants. Hybrid power plants and micro-grid systems are reportedly also being developed.

Biomass and waste-to-power plants are ideal to supply the captive power needs of small- and medium-scale industries. This type of distributed power system enjoys wide government support across Southeast Asia, and benefits from abundant biomass resources, particularly in Indonesia, the Philippines and Thailand.

Solar PV facilities, on the other hand, are gaining ground across the region, thanks to policy support and incentives. Thailand is at the forefront of the solar PV market in Southeast Asia, with an estimated capacity additions of approximately one GW in 2015 alone.

Temporary power plants running on diesel or HFO still dominate the rental power segment in Southeast Asia, owing to significant cost-savings, rapid installation, wide availability of fuel, and inherent flexibility of use. Temporary power plants running on gas are also gaining popularity in the region, in recognition of their cost and environmental benefits.

By going for the rental power option, one avoids the need for a significant upfront investment, and the long lead times associated with the construction of permanent power generation facilities.
Industry studies conducted across Southeast Asia reveal that a permanent centralized power plant may take around five to ten years to become fully operational due to the obstacles created by environmental laws in the region and land acquisition requirements, compounded by overall construction delays. While waiting for the power plants to be constructed and activated, power companies in Southeast Asia, the likes of Meralco and the National Power Corporation in the Philippines, or the Perusahaan Listrik Negara in Indonesia and the Vietnam Electricity Company, will find numerous benefits in setting up temporary rental power plants to meet the immediate power demands of their countries.

Temporary power plants are also scalable, in that its output can be tailored to the existing electricity demand of a community, a city or a province. They can also be installed even in areas with limited power infrastructure, say where substations are absent, because they can be directly connected to the grid having been equipped with the latest protection systems and advanced transformation and switching equipment.

When the permanent power plants are completed, the rental power plants can be easily and completely demobilized, thus leaving no power facility not used or that will require further maintenance and servicing.

For more information on temporary power plants on diesel, gas or bi-fuel, please visit: http://www.altaaqaglobal.com

The Growth of Distributed Power in Southeast Asia

As Southeast Asian economies continue to grow in the coming years, the region’s demand for electricity will proportionally increase. While the region’s governments are implementing long-term programs to respond to future power needs, power utilities in Southeast Asia, including Tenaga Nasional in Malaysia or the Electricity Generating Authority of Thailand, can take advantage of the availability of distributed power generation systems, like temporary power plants. Distributed power facilities can help overcome topographical challenges in delivering power, circumvent power transmission and distribution limitations, and boost the electrification rates of various countries in Southeast Asia.



-Ends-

Sources consulted:

https://ww2.frost.com/news/press-releases/vast-opportunity-distributed-power-generation-solutions-demand-power-southeast-asia-soars/

“Distributed Power Generation Enables Power Plants to Rapidly Address the Demand for Power in Southeast Asia”. Frost & Sullivan.

https://renewablesnow.com/news/se-asia-to-hit-34-7-gw-of-distributed-generation-by-2020-528745/

https://www.iesingapore.gov.sg/~/media/IE%20Singapore/Files/ASIR/PreConference_workshop_Sharad_Somani.pdf

http://powerstruggle.discoursemedia.org/deepdive/southeast-asia-access-to-energy-research-brief/

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This is a solution to Venezuela’s Electricity Crisis

Is Venezuela a victim of its own economic success?

The government has recently announced the shifting of Venezuela’s time by 30 minutes – an effort aimed at reducing the amount of electricity used for lighting. This is the latest of the drastic measures launched by the government to curb power consumption, which also included implementing load shedding for four hours a day across multiple states, enforcing leaves for public-sector employees for three days a week, closing of schools on Fridays, mandating malls and hotels to generate their own electricity for nine hours a day, and requiring heavy industries to cut electricity usage by 20% else they could face hefty fines.

Because of this scenario, there is tension between the government and the people. The people of Venezuela are calling for more than palliative solutions: They are clamoring for an urgent definitive resolution of the power crisis that has aggravated the country’s precarious economic situation. If the escalating tension is any indication, Venezuela will continue to reel from the effects of a deteriorating public security, social stability and economic viability, unless the severe power shortage is urgently redressed.

Electricity Minister Luis Motta looks at the massive Guri Dam, virtually dry because of the drought.
Courtesy Reuters.

How did things get so bad?

Venezuela heavily relies on hydroelectric power from the Guri Dam, which, according to estimates, provides more than 60% of the country’s electricity. While hydropower is usually a clean and reliable source of electricity, a prolonged drought or a persistent absence of rain can cause water levels in reservoirs to fall below what is necessary to spin the turbines in dams. This is what is happening to Venezuela in the face of the El Niño weather phenomenon. Reuters reported that in early April 2016, the water level at the Guri Dam is already at its historic low of 797 feet.

Countries that rely on hydroelectricity need a sufficient back-up power infrastructure that will support the supply of electricity when the water in reservoirs run dry. Unfortunately, Venezuela does not have one that can respond to its present electricity requirement. But, that is not to say that the country did not invest in its electrical infrastructure. In fact, according to Victor Silverman, historian at the Pomona College, in an interview published by www.wired.com, Venezuela invested around USD 10 billion in electrical generation under the presidency of Hugo Chavez. The problem, however, is that electricity consumption fast outstripped the available supply.

Courtesy Energy Information Administration

During the presidency of Chavez, Venezuela saw a notable decline in poverty, as the World Bank reports that the country decreased its poverty rate from 50% in 1998 to 30% in 2013. This meant that a great number of Venezuelans enjoyed an improvement in their standard of living, and an increased availability of money, which allowed them to purchase items that consume electricity, like TVs, refrigerators, air conditioners, and blow dryers, among others.

During that time, Venezuela, which has one of the world’s largest oil reserves, was also reaping the economic advantages of high oil prices. Wired reports that the country channeled the revenue from oil exports into social programs that improved the quality of life of its citizens. Not only did the government made healthcare and food more affordable, it subsidized fuel and electricity, and froze power rates. This prompted Venezuelans to consume electricity at a higher rate compared to other countries in Latin America.

Numbers from the US Energy Information Administration supports this: Between 2003 and 2012, Venezuela’s electricity consumption increased by 49%, largely owing to the economic and social improvement under the presidency of Chavez. However, installed capacity expanded by only 28%. This wide disparity took a toll on the country’s power grid.

The drought of 2009-2010 caused the water level at the Guri Dam to nosedive. According to www.vox.com, what ensued was a power shortage that forced to government to implement rolling blackouts, forced holidays and fines for heavy electricity users, like businesses, factories and mines. In the months after, added Vox, the government spent USD 1.5 billion to procure and install back-up generators throughout the country. But, owing to a lack of maintenance, the supplemental generators were not properly utilized, leaving the country’s transmission lines overburdened and unable to handle major electricity fluctuations.

Analysts say that the electricity crisis in Venezuela was never genuinely resolved from that point on. Further blackouts hit the country from 2012 to the present, and the people of Venezuela are losing hope of ever seeing an end in sight.

How can the power crisis be resolved?

Quoting energy experts, to provide a long-term resolution to Venezuela’s power crisis, the country needs to upgrade its existing dams, install reliable sources of back-up power plants in times of drought and prolonged low-rain seasons, and refurbish its transmission and distribution grid. This can be achieved through a well-executed investment plan, which requires a sizeable amount of financial resources and a competent oversight.

Unfortunately for Venezuela, the country’s economy has been severely hit by the collapse in oil prices over the past few years.  The days of buoyant revenues from oil exports have sailed, and now the government finds itself cash-strapped and deeper into debt. The country is now struggling with food shortages, and scarcity of basic goods and medicines, and with the prevailing power crisis, analysts predict that the country’s economy will deteriorate even further.

What Venezuela needs are viable power solutions that will provide reliable electricity to its industries and, consequently, spark a sustainable economic recovery. What Venezuela needs are affordable power solutions that will not require millions of dollars to buy, construct and maintain. What Venezuela needs are immediate power solutions than can be rapidly delivered and installed, and can supply consistent and reliable power within days and not years.

Multi-megawatt temporary power solutions can pave the way for a decisive resolution of the power crisis in Venezuela.  

In this time of economic recession and a devastating power crisis, Venezuela and its heavy industries will find considerable benefits in hiring the services of temporary power providers. By choosing temporary power plants, there will be no need for the Venezuelan government nor for industrial companies to spend scarce resources on capital expenditure, which is usually the case when procuring power equipment or building permanent power facilities. The government or the industrial companies can conveniently pay for the rented electricity from their operating revenues. As operations grow and the requirement for electricity increases, the government or the industrial companies can simply choose to add more power modules to the existing power plant, precluding the need to buy additional equipment or build other permanent facilities. Likewise, in case the power requirement decreases, the load of the temporary power plant can be proportionally adjusted.

The latest temporary power plants do not require heavy civil works, and can be connected to the grid regardless of its quality or age. There will be no need for extensive site preparation nor for the refurbishment of the transmission and distribution grid prior to operating temporary power plants. Owing to this, as soon as the generators and other equipment arrive on site, they can be installed, commissioned and powered on within days. In a matter of days, the country and its industries will be supplied with consistent and reliable electricity.

Temporary power providers offer a full range of service that includes the operation, maintenance and servicing of temporary power plants. The government or the industrial companies will be relieved of any responsibility in running or maintaining the power plants, thus can focus on their more essential functions. Temporary power providers have expert in-house engineers that will ensure that the power plants run at the optimal level at any given time.

As soon as the requirement for supplemental power passes, the government or the industrial companies can simply choose to end the contract with the temporary power provider. The entire temporary power plant will be demobilized, leaving no idle power equipment nor permanent power plants that will require constant maintenance.

There is a solution

Such a debilitating power shortage is not unique to Venezuela. Hydropower-dependent countries around the world are suffering from the same problem, and are struggling to find a viable solution. At times, governments and power utility providers are content with merely mitigating the effects of the power crisis, thinking that curative solutions will take enormous amounts of resources and years, sometimes even decades, before completion. There are sustainable answers to the world’s most pressing power problems, and one of them are temporary power solutions. Paradoxical as it may, turning to temporary power solutions can open doors to a long-term resolution of even the most severe of power challenges hounding our world today.

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Sources consulted:

“The roots of Venezuela’s appalling electricity crisis”, http://www.vox.com/2016/3/17/11254860/venezuela-electricity-crisis 

“Venezuela’s economic success fueled its electricity crisis”, http://www.wired.com/2016/04/venezuelas-economic-success-fueled-electricity-crisis/

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In Search of an Immediate Solution to Southern Africa’s Energy Challenges

Southern Africa’s hydropower sector is reeling from the effects of the drought caused by the intense El Niño weather phenomenon. With allied power infrastructure unable to provide the needed supplemental electricity, is the region left with no choice but to ride out the hard times?

Many countries in southern Africa are facing extended periods of drought or low rain, owing to the ongoing El Niño weather phenomenon. The impact of the drought is so pronounced that various governments in the region label it as the worst in decades. For example, industry reports reveal that the government of South Africa considers it as the worst since 1982, while the Zimbabwean Ministry of Agriculture compares it to the economically crippling drought of 1992, which affected close to 86 million people across 10 countries.   

Several countries in southern Africa depend on hydropower generation for an essential amount of their electricity supply. In fact, industry studies estimate that hydropower is responsible for more than 21% of power generation in the Southern African Power Pool (SAPP, a common electricity market among 12 southern African countries) in 2015. Thus, depressed water levels at major dams, due to drought and extended low-rain season, can bring about significant power generation challenges, which lead to widespread blackouts, causing inconvenience to residents and operational interruption to businesses and industries. 

The electricity-related effects of the drought are looming large in several countries in the region. In a recent release by Control Risks (an independent global risk consultancy), it reported that the ongoing drought had aggravated the already-precarious electricity situation of the SAPP. In Mozambique, for instance, the country’s National Water Board claimed that main hydropower facilities were struggling to keep up with the power generation requirements. In Zambia, meanwhile, Energy Minister Dora Siliya said that the water level at the Kariba dam, which accounts for a lion’s share of power generation capacity in Zambia and Zimbabwe, was “extremely dangerous”. 

Persistent blackouts and continual load shedding hurt the economy of southern African countries. Regular power interruption threatens to rein in the region’s economic growth, and to suppress the successes that southern African countries have achieve in recent years. In recognition of the urgency of the situation, the region’s governments have launched various short-, medium- and long-term solutions to the power challenges, including improving and maintaining hydropower and other power stations, enhancing electricity generation capacity, and managing electricity demand. Such solutions, however, can take years, even decades, to complete, and with the gravity of the present situation, it is safe to assume that countries in the region could not afford to wait that long.

With all due respect to the efforts launched by the governments, we observe that the need of the hour is an efficient power solution that is able to immediately and economically bridge the gap in electricity supply. Multi-megawatt temporary power plants represent a viable short- to medium-term solution to the region’s hydropower challenges.

A feasible solution to southern Africa’s power challenges

Temporary power plants represent an immediate, reliable, scalable and cost-efficient solution to the region’s power concerns. 

The installation of temporary power plants does not call for extensive site preparation nor for the refurbishment of transmission and distribution grids, which can take anywhere between months and years to finish. As soon as the generators and other power equipment arrive on site, they can be immediately installed, commissioned and powered on within days. In a matter of days, countries in southern Africa will be supplied with a consistent and reliable electricity supply.

The governments, power utility providers, nor industries and businesses in southern Africa will not need to spend scarce financial resources on capital expenditure, which is usually the case when procuring large-scale power equipment of building permanent power facilities. The governments and other industry stakeholders can conveniently pay for the rented electricity from their operating revenues. As industry activities grow and the requirement for electricity increases, they can simply choose to add more power modules to the temporary power plant, precluding the need to buy additional equipment or build other permanent facilities. By the same token, in case the power requirement decreases, the load of the temporary power plant can be proportionally adjusted.

Temporary power providers offer a full range of services, including operating and maintaining the power plants. They have well-trained, expert engineers that will ensure that the power plants run at the optimal level all the time.

As the region eases through its power challenges, and as soon as the long-term power sector development plans are gradually rolled out, the governments or the power utilities can simply choose to end the temporary power contract. The entire temporary power plant will be demobilized, leaving no idle power equipment nor permanent power plants running on part-load and requiring constant maintenance, servicing and upgrades.

Powering southern Africa’s success

Industrializing economies, such as the countries in southern Africa, need an efficient, reliable and continuous supply of electricity to sustain their social and economic activities that will spur their further growth. Temporary power solutions, in support of hydropower and other power generation stations, can immediately provide them with the much needed boost in power supply, paving their way into a sustainable and viable social and economic progress.

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This is a solution to Latin America’s Hydropower Crisis

Hydropower-dependent countries around the world are suffering from the effects of the El Niño weather phenomenon. In Latin America for instance, the National Oceanic and Atmospheric Administration has warned that the El Niño, which causes changes in the temperatures of oceans in the Equatorial Pacific Ocean, can bring severe storms and flooding in the southernmost countries of the region, as well as droughts and low-rain seasons in the northern part. Reports say that the current El Niño, touted to be the worst since 1998, has already caused extreme drought in several countries in the region, which in turn has led to a notable decline in hydropower generation.

Just recently, Venezuela, which heavily relies on hydropower, has announced that it had adjusted its time by 30 minutes, in an effort to reduce the amount of electricity used for lighting. This is the latest of the drastic measures launched by the government to curb power consumption, which also included implementing load shedding for four hours a day across multiple states, enforcing leaves for public-sector employees for three days a week, closing of schools on Fridays, mandating malls and hotels to generate their own electricity for nine hours a day, and requiring heavy industries to cut electricity usage by 20% else they could face hefty fines.

Owing to the power supply challenge in the country, there is an observable tension between the government and the people. The people of Venezuela are clamoring for an urgent definitive resolution of the power challenge. Thus, in order to avoid the deterioration of public security, social stability and economic viability of the country, the government needs to urgently reverse the prevailing situation.

Though the spotlight is currently on Venezuela, such an unsettling scenario can also happen to other hydropower-dependent countries in Latin America, in the face of the worse- and longer- than-expected El Niño. In order to prevent a total collapse of the countries’ power infrastructure, energy experts suggest upgrading existing dams, installing back-up permanent power plants and refurbishing transmission and distribution grids. The caveat is that such initiatives immediately require a substantial sum of financial resources, a dedicated competent supervision and an enormous amount of political will. Moreover, such initiatives can still take years to take shape, and with the gravity of the current power crisis, the affected countries cannot afford to wait.

In the interest of urgency, what the affected countries need are immediate power solutions than can be rapidly delivered and installed, and can supply consistent and reliable power within days and not years.

How can the power crisis be resolved?

Multi-megawatt temporary power plants can immediately provide a resolution to the power crisis in Latin America.    

Temporary power plants do not require heavy civil works, and can be connected to the grid regardless of its quality or age. There will be no need for extensive site preparation nor for the refurbishment of the transmission and distribution grid prior to operating temporary power plants. Owing to this, as soon as the generators and other equipment arrive on site, they can be installed, commissioned and powered on within days. In a matter of days, the affected countries will be supplied with consistent and reliable electricity.

By choosing temporary power plants, there will be no need for the affected countries to spend scarce resources on capital expenditure, which is usually the case when procuring power equipment or building permanent power facilities. The affected countries can conveniently pay for the rented electricity from their operating revenues. As the countries’ requirement for electricity increases, they can simply choose to add more power modules to the existing power plant, precluding the need to buy additional equipment or build other permanent facilities. Likewise, in case the power requirement decreases, the load of the temporary power plant can be proportionally adjusted.

Temporary power providers offer a full range of services, including operating and maintaining the power plants. The affected countries can rest assured that rental power providers have well-trained, expert engineers that will ensure that the power plants run at the optimal level all the times.

As the affected countries ease out of the hydropower generation crisis, and as soon as the requirement for supplemental power passes, they can simply choose to end the contract, and the entire temporary power plant will be demobilized. There will be no idle power equipment nor permanent power plants that will require constant maintenance.

There is a solution

Hydropower-dependent countries bearing the brunt of the El Niño will clearly benefit from the immediacy, efficiency, scalability and reliability of temporary power solutions. If expert forecasts are any indication, the long-term resolution of the region’s power crisis may necessitate careful planning, flawless execution, substantial funding and a reasonable time frame. Thus, while the governments and allied stakeholders are working towards a viable solution, rental power plants can support existing energy sources in providing a reliable and continuous electricity when and where it is needed.  

For more information on temporary power solutions, visit http://www.altaaqaglobal.com

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To Rent or Go Permanent: A Mining Perspective

By: Julian Ford, Chief Commercial Officer, Altaaqa Global CAT Rental Power

The mining industry has played an integral part in Africa’s history and progress. Though currently weathering unfavorable economic circumstances, Mining will continue to be important in the progressive growth of the continent’s economy.

Africa is instrumental in providing the world with precious metals and commodities, including platinum, diamond, gold, copper, steel and aluminum. Many of the mines sites in Africa, however, are in remote locations, where power infrastructure may not exist or are still developing, or where a reliable connection to national grids can still be improved. This poses a challenge to mine operations, established and developing alike, particularly in light of the fact that without access to a sufficient or reliable source of electricity, mining companies run the risk of losing on profit, valuable production time or opportunities for growth.

In coming up with a solution to ensure a consistent supply of electricity to the sites, mining companies often find themselves choosing between building a permanent power plant or turning to temporary electricity. Julian Ford, Chief Commercial Officer of global power solutions provider Altaaqa Global, shares his insights on how temporary power solutions can benefit mine operations especially during these economically trying times.

Why rent?

It is most advantageous to specify temporary power during the pre-feasibility/feasibility stage of mining operations, when mining companies are applying for finance. This could help them secure financing for the project.

“Temporary power solutions can support the growth phase of mine operations, because they provide flexibility, scalability, risk mitigation and cost minimization,” says Ford. Specifying the services of temporary power providers during this stage will preclude the need for mining companies to spend scarce CAPEX in procuring their own generators or building permanent power facilities. “With temporary power, mines can opt to start small, then add power capacity as their operations grow. They can pay for the rented electricity from their operational profits,” he says.

As mine operations develop and become established, mining companies will eventually find benefit in building their own permanent power plants, which, however, may take a substantial amount of time to complete. “While the permanent power plants are being constructed,” says Ford, “temporary power can sustain the mine operations. As soon as the permanent facilities are constructed and fully operational, mining companies can simply end the contract, and the temporary power plants will be immediately demobilized. This way, mining companies will not have surplus equipment, because everything was only rented.”

Temporary power solutions are also beneficial for ongoing mine operations, in times of power shortage or emergency situations. “When mine operations need additional power to sustain production, temporary power providers can easily deploy and install temporary power plants at their sites in a matter of days to supply continuous and reliable electricity,” says Ford.

As commodity prices remain depressed, and full economic recovery continues to be elusive for developed and emerging countries alike, mining companies are in the midst of challenging times. “In these times, mining companies cannot afford to subject their operations at risk, owing to lack of funds or long project lead times. Renting power does not require spending scarce CAPEX that is usually related to building permanent power plants. Temporary power plants can also be tailored to any power or voltage, so there is no longer a need to build support power infrastructure to run the rental plants. Additionally, installing temporary power plants will only take days, whereas constructing a permanent power infrastructure may span longer periods of time. This means that in a short time, mine operations can be up and running, and producing.”

“Hiring electricity can prove advantageous for both established and nascent mine operators. It can provide operational flexibility, enhance a site’s productivity and help optimize its processes without the need for a long lead time and a sizeable capital expenditure,” says Ford. “As mining companies realize the benefits of hiring power, it will no longer be uncommon in the coming years to see larger temporary power plants being hired on a longer-term basis within the mining industry.” 

*This article was published in the Web portal of Mining Weekly, South Africa: http://goo.gl/hHUWqa

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Plant on Demand

In its February 2016 issue, PMV Middle East magazine spoke to rental firms to find out how the market was going their way. One of the respondents was Altaaqa Global Chief Commercial Officer, Julian Ford. Here is what he said:

• As the provider of rental services, are you experiencing growth in your segment? And is it possible for you to provide any figures to quantify such developments?

It is important to recognize that that the growth of the rental power industry in whatever region in the world, goes in cycles, and is dependent on the prevailing market and economic situation.

In the Middle East, for instance, the buoyancy of the rental power market is spurred by several factors, including the availability of diesel, utility shortages, intensified construction activities, sustained oil & gas production, repair and maintenance of refineries, and unreliable electricity connection in many areas.

In Africa, on the other hand, the nascent increase in the supply of natural gas combined with an underlying increase in demand for power in developing markets, and the ongoing El Nino weather phenomenon that adversely affects hydropower dependent countries drive the growth of the temporary power market. 

• Is there any segment that is developing more strongly for your business than others?

Among the rental power technologies available, diesel generators will continue to dominate the market, mainly owing to the wide availability of fuel, fuel safety and economy and ease of installation. 

We are, however, observing that generators running on other fuels, such as natural gas or natural gas-diesel combination are gaining popularity. The growth of the segment can be attributed to the increasing availability of locally extracted natural gas, and, to some extent, to the environmental stewardship regulations in many countries around the world. Several countries in Africa are looking to monetize their ‘stranded gas’ reserves to generate useful low-cost electricity for the national grid, and rental power technologies can contribute towards that cause.

• What rental or leasing pricing structures are currently the most popular among your customers?

In the depot business, where transactions are much more frequent and are lower in value, it is usual to have a daily, weekly or monthly charge for the use of equipment. On top of this, there can be an option to supply fuel, or the customer can provide his own fuel.

When it comes to larger power projects, as supplied by Altaaqa Global, it is more usual to make a capacity charge for having the power plant available, plus an ‘energy charge’, which covers the variable maintenance cost of operating the plant. The situation with regard to fuel supply is more complex here.

We are observing that customers of power projects business are increasingly asking for guaranteed levels of fuel consumption, and even for fuel supply arrangements to be made as part of the service. While fuel consumption can be guaranteed within certain operating parameters, the funding of fuel is usually subject to a separate financing arrangement.

Julian Ford, CCO, Altaaqa Global

• What reasons are your customers providing as to why they are opting for rental arrangements? And are you seeing any particular trends?

Renting power affords many advantages to customers. Temporary power plants are readily available and are immediately deployed to virtually anywhere in the world where electricity is urgently needed. Rental power plants offer utmost flexibility in power and voltage, so that customers can choose to increase or decrease electricity output at short notice. Renting power also offers the customers the possibility of paying for the electricity produced by the hired power plants from their operating revenues. Additionally, renting electricity negates the need to spend scarce CAPEX that is usually required to build permanent power stations.

• How are you currently adapting your services to adjust to changes in the market’s demands?

The temporary power services that we offer vary from industry to industry and site to site.

In recognition of the changes in the market’s demands, we will continue to offer the most fuel efficient, reliable and technologically advanced generators and power systems to our clients to reduce their overall operating costs. We will combine it with consistent technical support and expert advice on equipment selection.  

As we have stated above, the diesel generator market will continue to grow in the next several years, so we will continue to have diesel generators readily available in our fleet. As natural gas becomes increasingly available, and gas power generation technologies progressively find application in bigger and longer-duration projects, we will ensure to offer natural gas generators where it is appropriate.  

• Is the push by more and more dealers and distributors to develop their own rental services noticeably increasing competition in the market compared with previous years?

Yes, definitely. The drive of more dealers and distributors to develop their own rental services have increased the number of players in the marketplace, particularly in the depot sphere. The depot entities often offer smaller generators and provide a wider range of services, which go beyond the realm of power rental. This makes putting up a depot business an attractive venture to new regional players, for instance. 

The power projects business, on the other hand, is more specialized, and offering integrated power services requires a high degree of experience, engineering expertise, technical skills, and equipment efficiency and reliability. Having said this, the increase in the number of entrants to the power projects sector may not be as pronounced as in the depot sector. 

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Global Warming Worsens Power Crisis in Africa

Africa is home to nearly a billion people – over a sixth of the world’s population – but the region only generates four per cent of the world’s electricity. Of that, three-quarters is utilized by South Africa, Egypt and a handful of other North African nations, with only 30% of the population of the continent with access to power.

Though most of the continent have constantly been facing challenges related to electricity, it is the hydropower-dependent countries that are presently being extremely burdened by power shortages. Spurred by erratic rainfall patterns and an increased frequency of droughts, these hydropower-dependent countries have seen an exceptional, drastic fall in the water level in major dams, forcing their governments to introduce a load shedding schedule that involves up to 18 hours of power interruption. The reduced level of water in the dams have provoked relevant authorities to advise power utilities to reduce generating capacity.

“The unprecedented energy crisis,” said one of the leaders of the countries, echoing the opinion of the other leaders of hydropower-dependent nations, “has already cost our countries dearly in terms of productivity, jobs and revenue.” He said that the power crisis had exacerbated the challenges that developing countries were still grappling with, including poverty, high unemployment, limited access to education, slow industrial development, inadequate infrastructure, poor quality health services and low industrial productivity. “The current energy crisis we are facing has a clear strong connection to global warming,” he said, “and as such, new strategies to alleviate the situation has to be proposed to address the effects of climate change.”

Diversifying energy sources
The leader said that a sound strategy to combat the current power crisis was to diversify energy sources to reduce dependency on hydroelectric stations. “Our country”, he said, “is blessed with abundant sunshine, which can be harnessed to increase energy supply to consumers. Adopting solar energy technologies, and to some extent wind, could reduce the pressure of demand for electricity on the national grid and over-dependence on hydro and thermal power.”

The aggressive drive of Africa’s hydropower-dependent countries towards diversifying their energy sources is laudable, especially because it does not only seek to resolve the power supply challenge, but also combat global warming and climate change. Moving away from the traditional sources of energy, like hydro and fossil fuels, and venturing into renewables, like solar or wind power, will not only encourage an increase in power generating capacity, but also a more sustainable use of conventional primary energy sources.

Shifting to renewable energy sources
A reservation, however, is that transitioning from conventional power sources, like hydro and fossil fuel, to alternative sources, like solar and wind, may not be immediately possible, as it may require the buy-in of several entities, including several branches of government, financial institutions, investors and industry stakeholders. With the procedures involved in obtaining approvals for such an initiative, the process of fully shifting to alternative sources of power may take years, or even decades, to complete.

Another concern is the observed insufficient reliability and predictability of renewable sources of power, like solar and wind. Industry experts claim that, though holding tremendous potential, solar and wind power still have room for improvement and optimization before they can assume the role of absolute primary sources of energy.

Urgent power supply support
The hydropower-dependent countries suffering from power shortage urgently need a reliable alternative source of energy now – not in a few years, not in a decade. In times of drought and low-rain seasons, load shedding and regular electricity outage, governments, utilities and large industrial operations in hydropower-dependent countries will find an immediate effective power solution in hiring the services of temporary electricity providers. Reliable electricity is essential in powering a country’s economic and social development, and renting large-scale power plants while the process of effectively integrating renewable energy sources into the energy mix is underway can guarantee a constant supply of power even to expansive regions, provinces and cities without the need to spend scarce CAPEX. Rented power plants offer economy and flexibility, because governments, utilities and allied stakeholders can pay for the electricity produced by hired power plants as the generators run, and they can choose to add power modules to the rental power plants as their requirements increase.

Rental power plants are not only reliable and fuel efficient, they also have less impact to the environment, supporting the government’s drive to combat climate change. Modern rental generators boast of cleaner operations, being able to run on a variety of fuels, including natural gas or a blend of gas and diesel. Studies conducted in different rental power plants sites around the world show that temporary power stations, like those running on natural gas, can surpass the worldwide NOx emission requirements, emitting only 250 mg/Nm3 even without after treatment.

Final Word
The prolonged low-rain season and drought in hydropower-dependent countries, which resulted in alarming low water level in major dams, are indubitably related to global warming and climate change. The stand of hydropower-dependent countries to diversify energy sources and reduce their dependence on conventional sources of power has its merits, especially when coupled with initiatives geared towards energy conservation and efficient use of electricity. While the process of shifting to renewable energy sources is moving forward, governments, utilities and allied stakeholders can find an immediate solution to their countries' power woes in hiring rental power providers. Ultimately, however, the solution to the power supply challenges and climate change will depend on the principled actions of the countries’ leadership and people.

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Altaaqa Global

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rbagatsing@altaaqaglobal.com

Will Blackouts Dim the Future of the Next Generation?

Worsening electricity shortages across many of the world’s developing countries are choking off progress in the education sector

Ayana, an engineering student from a town in Africa, would like to be a power plant engineer, having been through the horrors of persistent blackouts and load shedding. 

“I’d like to be an electrical engineer, because I would love to solve the power supply problems of my town, or maybe my country,” she said. She entered the technical university with high hopes: Months before classes started, her school had been outfitted with new computers, engineering laboratory equipment and electrical machines, and had been connected to the grid with the help of a rural electrification agency. “Our classes were productive, because we were working on our computers, spending fruitful hours in the lab and actually performing experiments,” she said, recounting her experiences prior to the prolonged rain-less season that has shrouded her country.

“Now,” she continued, “we are fast growing frustrated with what we are doing in school.” Owing to the lack of electricity due to shortage in hydropower, Ayana’s class regularly skips experiments, causing her and her classmates’ marks to flop. “We are like learning from our imagination. How could we master practical and technical subjects on paper? But, what can we do? Our machines and lab equipment just won’t work without power.”

Imamu has just earned his degree in Education from an African university. He wanted to teach young children, so he can take part in the formation of their values and learning. But, regularly disrupted classes and the lack of power and water in schools have gradually caused a change of heart. 

“I would have loved to teach children here in my country, but I feel like I am between a rock and a hard place”, he said, adding that the pressing electricity problems were driving him away. “Because power only returns in the evening, I have to begin my classes at night. But, it’s not possible. It is not safe, and I have to be with my family.” He said that if the dire power situation continues, he might eventually be left with no choice but to move to neighboring countries where wages for teachers and working conditions in schools are better.

Electricity has gradually become a scarce commodity in many emerging countries, largely owing to shortage in hydropower and unstable power infrastructure. With the effects of blackouts and load shedding growing more pronounced in the education sector, industry experts and stakeholders fear for the next generation.

“Schools are hit hard by this ongoing energy supply situation,” said a member of an Educators Union. “Many developing countries are burdened with unemployment, and for some, the key to have better chances of finding a suitable job is obtain qualifications in science, engineering and business. But, while quality science, engineering and business education received a notable boost some few years ago, these days, it may have hit a formidable roadblock in blackouts.”

Solving the educational conundrum cannot wait for years nor decades. To keep up with the rapid evolution of knowledge and of the world itself, students and educators alike have to be abreast of the developments with the help of computers, mobile devices and other modern electronic equipment.

In times of persistent load shedding and regular blackouts, governments, utilities and stakeholders in the education sector will find an immediate power solution in hiring the services of temporary electricity providers. Reliable electricity is needed to power computers, run science and engineering laboratories and keep the school environment conducive to learning. Renting large-scale power plants can guarantee a constant supply of power to educational facilities without the need to spend scarce CAPEX in building permanent power stations. Governments, utilities and other stakeholders will appreciate the fact that they can pay for the electricity produced by hired power plants as the generators run, and that they can choose to add power modules to the rental power plants as their requirements increase.

Rental power plants are not only reliable, they also have less impact to the environment. Modern rental generators boast of cleaner operations, being able to run on a variety of fuels, including natural gas or a blend of gas and diesel. Studies conducted in different rental power plants sites around the world show that temporary power stations, like those running on natural gas, can surpass the worldwide NOx emission requirements, emitting only 250 mg/Nm3 even without after treatment.

“I feel sad even considering moving to another country to teach other children,” said Imamu. “I feel that as a citizen of my country, I have a role to play in its progress and in the development of its children and people. I still want to stay here. I hope the situation will be better in the coming weeks…”

“I am excited to actually use the computers and the lab equipment we have in school,” said Ayana. “I still believe that when I finish school, I will be a productive electrical engineer. I don’t only dream for my personal success; I envision my town emerging from poverty with reliable electricity.”

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Encouraging Outlook for the Middle East Rental Power Market

The rental power market in the Middle East has remained buoyant, and is predicted to go on expanding in years to come. Buoyed by the development of new rental power technologies, interim power stations will continue to find application in a variety of sectors, including utility markets, extractive industries like mining and oil & gas, large process industries and major infrastructure construction projects.

Among the rental power technologies available, diesel generators will continue to dominate the market, largely due to the wide availability of fuel, fuel safety & economy and ease of installment. However, it is helpful to note that generators running on other fuels, such as natural gas and dual-fuel (a combination of diesel and gas), are progressively gaining ground. The market expansion of such technologies is spurred by the increasing availability of inexpensive locally extracted natural gas and the strict emission regulations in many countries around the world.

There have been observed limitations on the growth of the natural gas generator market, including fuel availability, and the prohibitive cost of installing safe and reliable fuel delivery infrastructure. Today, these are gradually being mitigated by the availability of cost-effective natural gas resources, and the application of natural gas technologies in bigger and longer-duration projects. In addition, dual-fuel generators simplifies the transition from diesel-run to gas-run generators.

There is also a growing trend towards the use of renewables in the region, particularly solar. As technology here develops, it is inevitable that they will play an increasingly important role in the future energy mix, and in the development of hybrid solutions with diesel or natural gas generators.

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Do Renewable Energy Facilities Have a Negative Impact on the Environment?

Every year, the number of countries that pledge to incorporate renewable energy in their overall energy mix is gradually going up. Be they incited by a constantly increasing demand for electricity, a keen interest to augment electrification rates or by the desire to conform to strict efficiency and environmental stewardship standards, the plans to “go green” are projected to come into fruition in 10 to 20 years.

In recent years, the world has seen a notable increase in the number of constructed and in-progress renewable energy facilities. In 2014, 64% of the global installed renewable energy capacity is hydro, 24% is wind, 8% is solar, 3% is bioenergy and 1% is geothermal (www.altenergymag.com). The facilities are indubitably geared towards the amplification of energy reserves and the reduction of the environmentally harmful effects of conventional energy generation, but are such facilities really as friendly to the environment as they are billed to be?

We have investigated some of the negative effects of renewable energy facilities towards the environment, and here is what we found:

Hydro

Though hydropower facilities do not cause any direct air quality impact, their construction and operation can influence the flow of rivers, which, in turn, affects wildlife and people.

Hydro facilities can cause flooding in and around the area where they are situated. When the water stored within the dam is suddenly released, it can lead to immediate flooding of the river downstream. The flooding may result in the destruction of agricultural land and forests.

Wind

Wind energy facilities are mostly scrutinized due to their impact on birds and other species. A recent release from the National Wind Coordinating Committee reflects that collisions with wind turbines, and the change in air pressure owing to spinning turbines are responsible for a number of deaths among birds and bats.

Solar

Complaints about solar facilities are often motivated by issues in land use, water use, habitat loss and materials used in the manufacture of solar panels.

Case-in point, to build a large-scale power facility, a vast area of land is needed. Experts suggest that the use of many acres of land may result in clearing and grading of land, leading to soil compaction, erosion and alteration of drainage channels.

Solar energy systems can also negatively affect the land during the process of materials extraction, exploration, manufacturing and disposal.

Bioenergy

Bioenergy feedstock, and the way it is harvested, may not only impact land use but also contribute to global warming emissions. For instance, human and animal waste utilized to power engines may increase harmful methane emission.

In addition, using tree or tree products to create biomass requires vast forest lands to be cleared, which causes topical changes and damages animal habitat.

Geothermal  

Aside from being known as capital intensive, constructing geothermal facilities may cause poisonous gases to escape during the drilling of holes. Geothermal facilities are also, under extreme circumstances, known to cause earthquakes.

While renewable energy facilities bring about observed negative impacts to the environment, one cannot deny the fact that they make a considerable difference in reducing carbon emissions largely associated with conventional electricity generation, among other processes. The onus is now on the R&D sector, manufacturers, implementing agencies and governments to mitigate (or eradicate) the impact the above-mentioned harmful effects.

In Part 2 of this article, we will take a look at other alternative energy sources that can support the power demand while renewable energy technologies and infrastructure are enhanced and optimized.

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Energy: The Oxygen of the Economy and the Life-blood of Growth

Zambia is currently experiencing a sever electricity shortage that has brought about the worst load shedding program the country has ever needed to employ. Because of the prevailing low-rain season, the water level in the country’s reservoirs has been consistently low – a fact that compelled Zesco to ration power generation and, ultimately, apply load shedding. When Zesco, the state-owned power company in Zambia, informed the public about the low water levels from which it generates electricity, few people lent their ears. Now, unusually extended hours of power cuts have been haunting Zambians….

Many residents have already been lamenting about the disastrous consequences of the power shortage on their homes and livelihoods. Zambia’s government, however, has been planning to roll out electricity-related projects that aim to mitigate the effects of the persisting hydrologic imbalance.

Minister of Mines, Energy and Water Development Christopher Yaluma has reportedly informed Zambia’s parliament that the government had been taking the necessary steps to import between 150-200 MW of electricity as an interim solution to cushion the power shortage. If this pushes through, there should be no load shedding in Zambia for the financial year 2015, because Zesco had also projected the production of 12,900 MW based on earlier indications from the country’s meteorology department of normal to above-normal rains for the season.

Zesco, in cooperation with other power generation companies in the country, has also been working on several projects to include more electricity in the national grid.

To complement the country’s drive to enhance its electricity generation and transmission infrastructure, Zambia can also choose to hire the services of rental power generation companies, which are able to provide temporary power plants to bridge the gap in electricity anytime and anywhere.

Rental power plants represent a fast-track, large-scale solution to the energy challenges plaguing not only Zambia but any given country in the world. Temporary power plants are a reliable, environmentally friendly and cost-effective answer to power shortages no matter its extent and degree. They are equipped with the latest technology, allowing them to be configured to produce the exact amount of electricity as required, and to be connected to a site’s existing power infrastructure regardless of its condition or age. As they are compact and containerized, they can be transported from and to anywhere in the world, and can be installed and commissioned in as little as days – not months, not years. Most importantly, they can offer the government and the tax-payers notable savings, because hiring rental power plants do not involve a large CAPEX.

Zambia’s power sector is presently dominated by hydroelectric power, which has not been adequate to meet the demand. Thus, the country is currently looking beyond hydropower and taking the initial steps to diversify its electricity sources.  Electricity is the ‘oxygen’ of the economy and the life-blood of growth, and the recent instances of severe load shedding has reminded the country about the reality that its power generation sector requires crucial new investment in order to meet the growing energy requirements of its residents and industries.

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Robert Bagatsing

Altaaqa Global

Tel: +971 56 1749505

rbagatsing@altaaqaglobal.com

Is the Future of Renewable Energy Already Upon Us?

Renewable energy sources have gained notable traction in the past few years that they have already taken their share of the spotlight in terms of many countries’ energy planning. A few years ago, integrating renewables in the overall mix of a country’s energy sources was almost next to impossible: The economics of doing so were challenging, and the impact on the electricity grid of adding too much capacity from renewables (like solar or wind) was unknown yet unsettling.

Today, the concerns of those days are gradually being eradicated by the tremendous development that renewable energy sources have undergone. There has been a remarkable reduction in prices among photovoltaic cells and wind turbines, making renewable power cost-competitive vis-à-vis traditional generation. In fact, a recent report issued by the World Bank’s Energy Sector Management Assistance Program (ESMAP) declares that “with the right combination of new policies and investment, countries can integrate unprecedented shares of variable renewable energy into their grids without compromising adequacy, reliability or affordability.”

While this observation is undoubtedly exciting, realizing it will require massive amounts of adjustment and fine-tuning not only on the part of infrastructure but also, and more importantly, in thinking. Opening inroads into a higher level of renewable energy generation will entail grid modernization, adoption of new technologies, revised business models for utility providers and updated policy and regulatory framework. Moreover, as per the insights of ESMAP, to ensure the success of the transition, countries should work towards strengthening interconnections between areas, diversifying the contribution of different renewable sources from various location, and building complementary generation and demand response technologies.

While the above are, to some extent, doable, it will take years, or even decades to set up the conditions conducive to higher levels of renewable energy generation. Pushing such initiatives forward will require the collaboration and the agreement of myriad entities and agencies, and will necessitate years upon years of infrastructure construction and refurbishment. Renewable energy generation itself is still undergoing a feverish level of research and development in order to optimize and, ultimately, stabilize it.

As renewable energy technologies are being developed and constructed, and as the necessary modifications in policies and regulations are drafted and approved, other power-related technologies, like mobile electricity generation systems, will be able to provide the necessary support. Mobile power technologies are designed and engineered to keep the electricity supply buoyant in cases when conventional or renewable sources meet challenges in sustaining the electricity demand. As permanent power infrastructure are being improved and refurbished, and renewable energy generation facilities enhanced, temporary power stations can provide the electricity supply to fill in the gaps in energy production.

With rental power plants on board, the perceived limitations of conventional and renewable energy sources can be overcome, and the power can be bridged until the mentioned sources regain their stability and reliability. In this context, temporary power plants find their maximum benefit in being used as supplementary or back-up power, while permanent energy facilities are being constructed or refurbished, or when alternative energy sources are being advanced and improved.

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Robert Bagatsing

Altaaqa Global

Tel: +971 56 1749505

rbagatsing@altaaqaglobal.com