How Can Rental Power Help Grow Mining Operations?

The mining industry has played an integral part in the history and progress of countries and communities where it exists. Many mines sites, 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.

Temporary power and the Mining industry

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. 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.

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, 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.

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. 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.

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Insights on the Power Rental Market in the Middle East

The performance of the power rental market in the Middle East remains strong, riding high on the region's continued economic growth and sustained industrial and infrastructure activities. Peter den Boogert, CEO of Altaaqa Global, shares the company's perspectives on the road map ahead of the temporary power market in the Middle East.

Which factors are leading to the rise in power rental market in the Middle East region? 

The power rental market has been constantly growing in the Middle East, owing to the region’s continuous economic growth, sustained industrial and infrastructure activities, rapid growth in population, improvement in the standards of living, occasional utility shortages in key areas, and observed unreliable electricity connection in various cities and provinces. 

The above mentioned factors lead to the requirement for alternative power sources, such as multi-megawatt temporary power plants, to support the region’s existing power infrastructure. For instance, the intense industrial and construction activities, coupled with a massive electricity requirement on the part of residents especially during summer months put a heavy load on the region’s utilities, so that occasionally they are unable to supply the required power. This is where turning to temporary power becomes beneficial, particularly in maintaining the productivity of construction or industrial operations, and in avoiding power interruptions, load shedding or peak shaving.  

Furthermore, temporary power plants are also employed to bring electricity to areas where power connection remains unreliable or absent, like in remote locations or mountainous regions. 

Which is the biggest genset market in the region? Recent reports suggest Saudi Arabia, the UAE and Qatar are leading the way. What are the countries, you think, follow the list?

We observe that Saudi Arabia, UAE and Qatar remain the biggest markets for multi-megawatt temporary power solutions in the region. 

Although the decrease in oil prices has had, to some extent, an effect on the economy of Saudi Arabia, economic experts agree that it has not restricted the country’s investments in various projects. The experts recognize the country’s extensive cash reserves for the continuous development in Saudi Arabia’s public infrastructure, utilities, healthcare and education, to name a few. Thus, the sustained construction and industrial activities in the country, coupled with a constantly increasing electricity demand from its residents and businesses, are spurring the buoyancy of the power rental market in Saudi Arabia. In fact, market research firm 6W Research estimates the CAGR of the power rental market in Saudi Arabia to be at 12.6% from 2015-2021.

Similarly, the demand for electricity has, over the years, tremendously increased in the UAE. The constantly increasing public and private infrastructure, together with an expanding population, has caused the country’s electricity requirement to surge in the last decade. The same research firm predicts the CAGR of the temporary power market in the UAE to be at 16.8% from 2015-2021, taking into keen consideration the upcoming World Expo 2020, during which about 25 million tourists are expected to visit the country. Preparations for the global event, including the construction of trade centers, hotels, hospitals, rail networks and airports are seen to be driving the growth of the rental power sector in the country.

The rental power market in Qatar is heavily influenced by the country’s preparations for the upcoming FIFA World Cup 2022. The increasing infrastructure development (building of eight new stadiums, renovation of three existing stadiums, establishment of Lusail City), expanding transportation network (building of Doha Metro Rail and expressways), surging public and private investments, rising hospitality sector and continuous economic reforms are driving the growth of the temporary power business in the country. Research firm 6W Research pegs the growth of the rental power sector in the country at 23.3% from 2014-2020. 

Other significant markets for multi-megawatt rental power solutions in the region include Kuwait, Oman and Bahrain, which are also economically and industrially viable countries.

It is worth noting that temporary power solutions can also prove beneficial for countries that may require infrastructure rebuilding and rehabilitation, or re-establishment of a reliable power connection, like Yemen, Iraq and Syria. As the governance of these countries become more stable in the coming years, we believe that they will represent excellent market opportunities for temporary power providers.

Between gas and diesel gensets, which has a better growth prospect and why? With solar generation being tapped in a big way today especially in Saudi Arabia, the UAE and Egypt, do you think it may affect the genset industry?

It is expected that the diesel generator market will continue to grow in the next several years, owing to easy availability, safety and economy of fuel, and ease of installation of diesel equipment.

However, we are noticing a gradual increase in the requirement for natural gas and dual-fuel power generation technologies, largely influenced by the increasing availability of fuel resources and government initiatives towards reducing carbon emissions. 

In the past, fuel availability and the costs of installing safe and reliable fuel delivery infrastructure have been limitations on the growth of the natural gas generator market. Today, however, gas is becoming increasingly available and gas generation technologies are progressively finding application in bigger and longer-duration projects, making the upfront investment for the gas infrastructure economically sensible. The availability of dual-fuel generators (which significantly simplifies the transition from diesel-run to gas-run generators), is also helping overcome these obstacles.

As for the observed gradual shift in solar and other renewable power generation technologies, we see this as a welcome development in increasing the availability of electricity in areas that require it, and in diversifying the energy mix to encourage long-term energy security. 

Multi-megawatt temporary power technologies are primed to work in tandem with renewable energy sources to help surmount issues of power supply unpredictability and intermittency, especially in power-intensive industries like oil & gas, construction, and utility power generation, transmission and distribution.  

Temporary power plants can also provide supplemental power to renewable energy facilities during planning, manufacturing, installation, commissioning, operations and maintenance. Temporary power plants can help ensure that renewable energy plants are constructed and delivered on time and as planned, and that they remain efficient, reliable and in optimum condition at all times.

What are the preferred ranges that are most popular in the region and the industries that are catered to? Which are Altaaqa Global’s most popular genset ranges and contracts it has been awarded in the region?

The amount of required power vary from industry to industry. For instance, construction projects may require a few hundred kVA during the building phase to a few MW during the commissioning stage. Refinery maintenance and rehabilitation often requires several MW of power. The utility industry has the biggest demand, usually requiring power plants of tens or hundreds of MW to provide supplementary power to the grid. 

For our part, we provide multi-megawatt temporary power plants, focused on utility markets, extractive industries such as mining and oil and gas, large process industries and major construction infrastructure projects.  

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How Not to Waste Your Economic Success: A Solution to Power Supply Deficiency in Developing Countries

Many developing countries around the world are grappling with power supply insufficiency. While the increase in the power requirement is aggressive, investments in the power industry seem to be sluggish. Is it only a matter of time before these emerging countries lose steam?

Perhaps one of the biggest challenges an industrializing economy, like the Philippines, can face is satisfying a continually growing domestic energy demand. Naturally, when a country’s economy expands, it prompts a consequent improvement in the standards of living of citizens and a significant increase in business and industrial activities. These, in turn, result in a surge in the power requirement in the country, which has to be borne by its power infrastructure. The problem is that a developing country’s power systems, owing to their age, quantity or quality, are often unable to cope with the increased power demand.

Metro Manila skyline

When the available electricity is not enough to satisfy the power demand, the government or the power utility providers may implement rolling blackouts, otherwise known as load shedding, to protect the power systems and avoid a total power failure. Though not as disastrous as a prolonged total blackout, load shedding in itself can be a real bane to any business or industry, can bring myriad inconvenience to citizens and can rein in the further economic growth of any developing country.

Why not enough power?

There are several reasons why a developing country’s power infrastructure is unable to produce electricity according to the demand. For instance, there could be a shortage in the necessary fuel to run the power systems. This has happened in South Africa in 2007 when challenges in the supply of coal to its coal-fired power plants resulted in an electricity supply deficiency. From 2014 until recently, South Africa again faced a power supply crisis due to the collapse of a coal storage silo at the Majuba plant which provides approximately 10% of the country’s electricity. A similar situation has also been observed in other countries in Southeast Asia, Africa, and South America, when droughts and prolonged low-rain seasons caused large dams to dry up, resulting in insufficient hydropower generation.

Another reason for the insufficient electricity production of power systems are the delays in the construction and activation of new power plants that will have introduced new generating capacity to the country’s grid. Let us consider this situation: When a country’s energy department predicts an increase in the domestic power demand, it will work towards the construction of new power sources to satiate the eventual electricity requirement. However, the construction of the new power plants can be wracked with delays and budget overruns, which can cause a postponement or the suspension of the power projects. Without the new generating capacity expected from the new power sources, the existing power infrastructure has to bear the increased demand. This puts the power system in severe strain and compromises the integrity of the existing power infrastructure. This scenario often leads to load shedding or, worse, a total failure of the existing power systems.

"Perfect" Combination: Residents of the Philippines suffer from the effects of scattered rains
and continual blackouts, or "brownouts" as more popularly called in the country

A lack of proper maintenance of the existing power systems is also a salient reason of a power supply insufficiency. In many developing countries, it can oftentimes be observed that power plants are operated beyond their maintenance window to save on maintenance cost and to keep them producing electricity in response to the demand. While this may seem to be a sound economic decision in the short-term, this can result in the breaking down of critical plant components and, worse, of the power plant itself. Shutting down power plants for a protracted unplanned maintenance can lead not only to a more expensive maintenance process but also to a deficit in the country’s electricity supply, which in turn brings power interruptions to homes and operational disruptions to businesses, industries, and government services. Moreover, poorly maintained power plants have been proven to be less fuel-efficient and less reliable and, thus, more expensive to operate.

The real cost of the insufficiency in power supply 

Load shedding, rolling blackouts and frequent power outages can severely hamper myriad industry and business functions and can bring health and security risks to citizens. Some of the businesses that could be heavily hit by power interruptions include manufacturing, financial corporations, IT services and consulting, data centers, pharmaceutical plants, petrochemical plants, refineries, food processing facilities, control centers, entertainment venues and medical facilities. Judging from the number and the activities of the affected industries, one can safely reckon that even a momentary power outage can easily cost billions of Pesos in losses and damages.

Not Spared: Dark buildings at the central business district endure
the effects of the power shortage  

More alarming, frequent blackouts hold the real potential to compromise the economic growth and international competitiveness of a developing economy. A disappointing economic performance from key industries can lead to a strong monetary depreciation and downward revisions in growth forecasts. It can also drive global rating agencies to downgrade a developing country’s credit ratings, which can put it in a bad light as an investment destination. A prolonged bout with load shedding can negate previous economic achievements of an emerging country and, worse, can plunge the country’s economy into recession.

There are solutions to power challenges  

To effectively combat a power supply inefficiency, a developing country, like the Philippines, should promote further investment in its power sector and regular servicing and maintenance of its existing power systems. While it is understandable that such initiatives may take some time to come to fruition, an emerging country can in the interim turn to temporary power solutions for the immediate resolution of its power supply challenges.

Temporary power solutions can be delivered to the Philippines or to any emerging country anywhere in the world at a moment’s notice, and can be installed and activated in a matter of days. They are able to effectively supply the precise power requirement at any given time, and can be ramped up or scaled down depending on the demand. Governments, power utility providers or power industry stakeholders need not pour in a huge investment in capital expenditure, and can pay for the produced electricity from their operating revenues. Temporary power plants are greatly beneficial in providing reliable electricity when permanent power facilities are undergoing maintenance, or when there are significant delays in the activation of new sources of electricity. They can also be a viable alternative to running inefficient and costly outdated or poorly maintained permanent power plants.

Temporary power solutions can provide immediate power to developing countries

The economic resurgence of the Philippines in recent years has been one of Asia’s biggest success stories. The country’s continued economic growth has been nothing short of impressive. Modern and industrializing economies, such as the Philippines, need an efficient and reliable supply of electricity to sustain their economic activities, better support their citizens and take off. While the government and other power stakeholders are working towards a long-term solution to power challenges, temporary power solutions can provide the Philippines with the much-needed boost in the power supply, paving the way to a more sustainable and viable economy.

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Maximum Power: Mega Trends in the GCC Regional Temporary Power Industry

From smart solutions to energy efficiency, the value addition curve for rental power plants is always on the rise. Altaaqa Global shares its insights about mega trends that the regional temporary power industry must align itself with. 

• What is you overview of the current Genset market in the GCC?

The temporary power industry is largely dependent on the prevailing market situation and activities. In the context of the GCC, the rental power market is conditioned by several factors, including:

• Utility shortages, particularly in KSA and Kuwait, especially during peak summer months 
• The gradual recovery of the construction industry in UAE and Saudi Arabia
• Absent or unreliable electricity connection in various areas in the region
• Regional growth in population and improvement in the standards of living
• The availability of diesel, and the nascent increase in the supply of natural gas
• Large industrial customers/companies turning to rental power to maintain the effectiveness/productivity of their operations in times of power interruptions or peak shaving
• Opportunities for infrastructure rebuilding and development 

KSA, Qatar and the UAE have consistently been the biggest market for gensets in the region, be it for rental or for sales, as they have been demonstrating high economic growth rates buoyed by industrial and commercial development. At present, however, we see a slight decline in the interest on temporary power services owing to the suppressed prices of oil and other commodities.

• What are the new trends shaping demand for Gensets (across all types)? What is your projection of the region’s Gensets market in the next five years?

We are noticing the gradual expansion of the natural gas and dual-fuel genset markets, particularly where inexpensive natural gas is available. The growth of such markets are supported by the increase in unconventional gas resources and by stringent emission regulations in effect in many countries around the world.

Fuel availability and the costs of installing safe and reliable fuel delivery infrastructure have traditionally posed limitations on the growth of the natural gas generator market. Today, gas is becoming increasingly available and gas generation technology progressively finds application in bigger and longer-duration projects. The availability of dual-fuel generators (which significantly simplifies the transition from diesel-run to gas-run generators), is helping overcome these installation and operational obstacles.

• How is your company geared up to meet the new demand trends?

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.  

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.

• What is the region’s uptake on smart technologies? What solutions does your company offer to that end? What are some of the latest innovations in Gensets to enhance user experience?

There is an intense interest in the GCC in technologies that aid in the provision of reliable and efficient electrical power, resource conservation and environmental stewardship. The relevance of such technologies cannot be overstated in the GCC’s modern environment, which sees high levels of power consumption that takes a toll on the generation, transmission and distribution facilities.

In this light, here are some of the smart technologies available in our power generations systems:

• Our generators are equipped with state-of-the-art control and protection systems that allow them to change operational modes (island, grid or standby) in just a push of a button. Because of this, our generators can provide the precise electrical power at the exact time it is needed, in whatever mode required. 
• Our generators are also equipped with local control systems that provide power metering, protective relaying, and engine and generator control and monitoring. They are integrated with digital voltage regulators, which works to enhance system monitoring. They offer the ability to view and reset diagnostics of all networked controls, eliminating the need for separate service tools for troubleshooting. They also have real-time clocks which allow for date and time-stamping of diagnostic and events.
• To enhance user experience, our generators are equipped with engine operator interface featuring graphical display with positive image, transflective LCD and adjustable white backlight/contrast. Additional features include engine cool-down times, engine cycle crank, three engine control keys and status indicator (run/auto/stop), lamp test and alarm acknowledgement keys. It has warnings/shutdowns with indicating text for low oil pressure, high oil temperature, emergency stop, over speed and over crank, on top of an emergency stop push button and shortcut keys for engine and generator parameters. 

• What are the latest innovations on Bi-fuel portable generators? 

Our dual-fuel power generators are specifically developed to reduce fuel costs and decrease emissions. They are equipped with a dynamic gas-blending technology that optimizes output, while being environmentally considerate. Our bi-fuel generators automatically adjust to changes in fuel quality and pressure to allow engines to run on a wide variety of fuels, including associated gas and vaporized LNG, with no loss of performance integrity. Owing to this, no customer input or gas analysis is required during operation, and no re-calibration is needed when the equipment is moved or the gas supply changes.

• How will the shift towards renewable energy impact the Gensets market in the GCC?

Owing to the rapid depletion of the world’s fossil fuel resources, in addition to greater requirements in carbon reporting, many countries around the world are looking to diversify their energy mix to encourage long-term energy security. A crucial component of this initiative are renewable energy sources.

While renewable energy technologies are being optimized, continued dependence on traditional sources of electrical power is needed to bridge the power gap and maintain a continuous and reliable supply of electricity. Temporary power solutions, for instance, can work in tandem with renewable energy sources to help mitigate the issues of unpredictability and intermittency.

Aside from supporting renewable energy facilities in producing electricity, temporary power plants can also provide power to renewable plants throughout their life cycle. Temporary power plants can provide supplemental power to renewable facilities during planning, manufacturing, installation, commissioning, operations and maintenance. Temporary power plants can help ensure that renewable energy plants are constructed and delivered on time and as planned, and that they remain efficient, reliable and in optimum condition at all times.

• Comment about the market for Genset spare parts?

In addition to our own in-house capabilities, as an authorized Caterpillar dealer, Altaaqa Global has access to the wide range of technical, engineering, logistical and service/maintenance resources of other Caterpillar dealers around the world.

In mobilizing for a project, for instance, we may tap the power generation resources, technical & engineering expertise and logistical facilities of the local Caterpillar dealers where we operate, or of any Caterpillar dealer around the world. We also have access to locally available parts and can call for local maintenance service or technical support. Thanks to this synergy, we are able to provide for a quick and efficient installation of power plants and ongoing support for projects anywhere in the world.

• What are the major challenges in the GCC Gensets industry? How is the slump in oil prices impacting the market?

While the fact that the prevailing oil price makes generators cheaper to run is an advantage in theory, we have to remember that the requirement for generators is proportional to the rate of economic activity. At present, the prices of oil and commodities are suppressed, and this is having a negative impact on the interest on power generation services. We, however, expect the industry to rebound quickly as and when economic conditions improve.

• How is the 5% VAT proposed by GCC countries likely affect the Gensets market?

The introduction of VAT in the region was largely prompted by the drop in revenues in the face of plummeting oil prices. With VAT, businesses and industrial companies must grapple with increased production and higher capital costs. Economists, however, predict that the benefits of VAT to the region will outweigh the financial burdens that come with it.

One positive scenario we see is that with the introduction of VAT, governments in the GCC can have additional revenues that they can use to build additional infrastructure, refurbish existing facilities, and overall improve services to their citizens. These represent excellent business opportunities for temporary power providers. As we have mentioned above, the temporary power industry is conditioned by the prevailing market situation and activities, and if GCC countries intensify their economic and social activities, the industry will continue to thrive in the region.

• With competition in the market growing, what will industry players need to do to retain their clients and also win over new ones? What steps are you taking towards driving efficiency? How is this likely to give you a competitive edge? What is your company doing to have a competitive edge?

As an authorized Caterpillar dealer, we work closely with the Caterpillar product development team to share perspectives of customer requirements in the power rental business. We continually work on improving the efficiency and reliability of our equipment, and we constantly revisit our procedures and processes with the aim of improving the way we do things in every project.

The role of temporary power has evolved from being a local, short-term, transactional activity to a major global project-based industry. To keep abreast of the opportunities in the coming years, we will continue to hone a highly skilled, motivated & experienced, world-class, power projects team. At Altaaqa Global, we strive to lead the evolution of the industry, and to be recognized as the premier source of innovative technical solutions and the highest level of customer service and support.

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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.

End

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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Averting a Power Crisis: Is Curtailing Electricity Consumption the Best Option?

It seems logical, doesn’t it? If there was a hole in your boat, through which the water entered, what would you do? Plug it. If you lifted a box that proved to be too heavy for you, what would you do? Let it down a while, and unload a little. If you had colds, and it was making it hard for you to breathe, what would you do? Blow your nose.

The parallel couldn’t be clearer: If electricity was not enough, and consumption was outstripping the supply, what would a country, a province or a city do? Curtail the demand by all means, even if it means limiting work hours and mandating energy savings. But, does it really solve the problem, or is such a solution merely palliative?

Many hydropower-dependent countries around the world are facing an electricity shortage, owing to prolonged droughts brought about by the El Nino weather phenomenon. The absent or extremely low rainfall levels is choking off hydroelectric dams essential for supplying a lion’s share of the countries’ electricity resources. Because the countries’ power generation is severely hampered, governments and utility providers are forced to implement drastic electricity-conservation measures to make do in the face of the energy challenge.

Aside from load shedding and peak shaving, some countries have started rolling out a mandatory additional day-off for certain sectors, in an effort to control power consumption. While some employees welcome such directives, others are feeling apprehensive. Marta, 45, government employee, shares her thoughts. “I should be happy that I have more time to catch up on sleep and play with my kids, but I am worried about our productivity.” Just a few months ago, Marta’s office cut the working time short by two hours. “A lot of things are not getting done, because we were only working for six hours a day for five days. I cannot imagine what happens now that we will only be working for four days.”

Economists share Marta’s perspective, when they said that decreasing the number of working hours and shortening the work-week for government offices and private companies could worsen the countries’ already reeling economic performance. They said that the implementation of such measures could bring about devastating effects to the countries’ economic productivity, already depressed from the power crisis.

Alberto, 51, restaurateur, does not subscribe to the four-day work-week. “I cannot afford to have my restaurant closed for three days a week. It’s just not possible from a business stand-point.” Unfortunately, Alberto’s restaurant is in front of Marta’s office, so the four-day work-week affects its footfall. “Most of my customers are from that office. They take lunch here, and used to take something out for dinner. When they started working for two hours less, most of them stopped ordering for dinner, but at least they still eat lunch. Now, that they are off for three days, I don’t know how I can fill up the seats.”

Power-conservation measures, such as shortening work-hours, may have merits in immediately controlling electricity consumption, but there could be productivity-related drawbacks underneath the surface. As most businesses and industries need electricity to be productive, requiring them to suspend operations to save on power may be counter-productive to a certain extent.

In times when a country’s power generation is no longer enough to support the demand, governments and power utility providers may find benefit in turning to temporary power solutions to urgently supply the necessary electricity.

By having temporary power solutions on board, governments and power utilities need not spend scarce resources on capital purchase, which is usually the case when building permanent power plants, or refurbishing/rehabilitating old permanent power stations. Moreover, governments and power utilities can pay for the electricity produced by the hired power plants from their operating revenues. Hiring temporary power solutions also brings considerable cost savings, owing to the efficiency and reliability of temporary power technologies. Governments and power utilities will be able to save on fuel- and maintenance-related costs, vis-à-vis running or maintaining dated permanent power facilities.

Temporary power plants are flexible in power and voltage, and their capacity can be increased or decreased according to demand, so governments and power utilities can choose to add power modules as the requirement for power increases. Readily available and rapidly deployed and installed anywhere in the world, they temporary power plants are able to function in virtually any locations, including in areas where traditional power infrastructure, like grids and substations, is outdated, damaged or absent.

Temporary power plants are capable of supplying reliable electricity while droughts persist. As soon as the weather conditions improve, and dams have enough water to generate sufficient electricity, governments and power utilities can simply end the contract, and the temporary power solutions will be demobilized, leaving no idle permanent infrastructure or equipment.

Power supply insufficiency adversely affects big and small businesses alike, like Alberto’s restaurant; government services, as in the case of Marta; and an entire country’s economy. Persistent power outages result in hampered economic productivity that reins in the development of any country. In times of power-related challenges, such as drought for hydropower-dependent countries, temporary power technologies can supply the necessary electricity to keep businesses and industries going, while natural conditions eventually turn favorable.

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Island Resorts Report Losses Due to Power Outage

Mario, a resort owner, could do nothing but shake his head in disappointment. “I was hoping this week will be profitable for us,” he says, adding that every year, he looks forward to the extended weekend, when vacationers can hardly book a place in his resort. “This year was different. I don’t know. Maybe because the season is extremely warm, and we do not have electricity.”

Like Mario, Jose was disgruntled that power had not been restored in the island in time for the four-day weekend. “This is the last long weekend before the rains set in,” says Jose, “I was hoping to make good money this week as a buffer for the rainy days, but the island utility did not rise to the occasion.”

Mario and Jose, like all the other resort, hotel and restaurant owners in the island, are reeling from the effects of an unprecedented drop in the season’s number of tourists, which was reportedly halved. “They have shun our island, because it will not be comfortable to stay in any resort or hotel here in this condition,” says Mario. “Our resort may have small generator sets, but they are expensive to run, and they are not enough to power all our rooms, especially when air conditioners are turned on.”

Jose brings to light another challenge: “Because there is no electricity, our water stations do not function, so we do not have water in our resort. We have to supply our guests with gallons of bottled water to be used for bathing. This is adding not only to our expenses but also to their inconvenience.”

Mario and Jose’s island lost electricity when power was cut off due to a power plant accident. It has been two weeks since the incident, but power is yet to be restored. “We still hope to make the best out of what’s left of summer,” says Mario, “but in order for our businesses to be profitable again, our island has to have constant and reliable electricity again.”

Keeping islands supplied with reliable electricity comes with several challenges for island utility providers. The wide distance between the mainland and the other islands in the vicinity poses significant difficulties in moving reliable electricity, in case of unforeseen power outages. Island-based businesses can resort to running their own local power generation equipment, like small diesel gensets, or solar or wind energy systems, but their production may not be enough to fully run an entire facility, especially during peak seasons. Then, there are allied island utilities, like water, that also depend on electricity to be delivered.

As a proactive stance against unforeseen electricity challenges, island power utility providers need ready energy sources, which are available on-demand 24 hours a day, 7 days a week, to meet their customers’ energy needs. Island power utilities will find benefit in partnering with multi-megawatt temporary power providers, which can supply reliable electricity anytime and anywhere it is needed.
Temporary power plants can be deployed at a moment’s notice and can be easily installed to start supplying electricity in a few days. The generators that make up the plants are containerized, so they can be easily delivered as complete power packages anywhere in the world, even in remote islands. They are modular, which means they can fit a wide variety of site lay-outs, and do not need to be laid out on a huge space – particularly advantageous for small islands. They also have low-noise and low-emission operations, so situating them within the vicinity of hotels, resorts and tourist spots will not be a problem.

The latest-technology temporary power plants can be easily connected to the existing local power infrastructure in islands, and can generate power either in synchronization with the local power generation plants or as a standalone system. They are flexible in power and voltage, and their electricity output can be scaled up or down to meet islands’ varying electricity demand.
Temporary power solutions will not require a sizable capital expenditure and, owing to their operational reliability and fuel efficiency, will considerably reduce the operating and maintenance expenses of island utility providers.

“We can’t dwell on the lost opportunity of this past long weekend,” says Mario. “But, I hope that our island power utility provider has learned a lesson or two from this incident.”

“This extended blackout has not only affected our businesses,” says Jose. “I hope that this does not stunt our tourism industry.”

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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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