Temporary Power: Keeping the Mining Industry Buoyant Through the Trying Times

The present times have not been favorable to the mining industry.

Many mine operators in Africa, Asia and South America have been facing myriad production-related challenges, owing to power shortages, not helped by the longer and stronger than expected El Niño phenomenon. El Niño, a cyclical meteorological phenomenon, brings extreme weather to parts of South America, Southeast Asia, Australia and Africa. For instance, mining operators in Indonesia, a major nickel and copper producer, have been facing consistent output drops as hydroelectric power facilities fail to generate enough electricity. In Peru and Chile, persistent heavy rains not only cause extreme flooding into zinc mines, affecting their production and triggering price spikes, but wide spread blackouts and damage to power infrastructure.

Then, there is the gradual decline of prices of commodities for the past several years. Prices of gold, silver, iron ore, coal and copper have all been negatively affected by stringent credit restrictions, weak global demand and a growing supply from new low-cost projects. As a result, mining companies, established and start-ups alike, are struggling to maintain a profitable production, resulting in job cuts and tighter cash flows and limited expenditures.

In such a case, mine operators can find huge benefits in hiring the services of temporary power providers. Electricity plays an undeniably essential role in mining operations, be it in exploration, production, climate control or workplace visibility, and rental power plants can provide the necessary electricity without the operators spending scarce CAPEX. As opposed to investing in permanent power infrastructure, mining companies can pay for the electricity produced by hired power plants from their operating revenues. As their operations expand and their power requirements increase, mine operators will be able to add additional power modules that will increase the rental power plant’s generation capacity. The investment in temporary power plants have been proven to be marginal compared to the cost of foregone opportunities, lost production time, or wasted man-hours.

As rental generators are modular and containerized, they can be rapidly delivered to and installed anywhere in the world, and can be tailored to the requirement of any mining site. They are fully able to function even in remote locations and in sites where traditional power infrastructure, like grids and substations, is outdated, damaged or absent. They can be fully constructed and powered on in a matter of days, and can be ramped up or scaled down depending on a site’s power usage demand.

Modern rental generators boast of a cleaner operation, being able to run on a variety of fuels, including natural gas or dual-fuel (70% gas and 30% diesel). As a case in point, Caterpillar’s natural gas-powered generators surpass the NOx emission requirements, emitting only 250 mg/Nm3 even without after-treatment.

Caterpillar’s gas generators are also capable of converting coal mine methane to electric or thermal power, which contributes to the reduction of greenhouse gas emissions. The gas generator technologies have the ability to utilize gas with variable concentrations of methane.

The global mining industry is going through challenging times triggered by natural and economic circumstances. Temporary power technologies can give mine operators a sustainable competitive advantage, as they can enhance a site’s productivity and optimize its processes without the need for a sizeable capital expenditure.

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Straight from the Shoulder: Insights on the Rental Power Market in the Middle East

Altaaqa Global CCO, Julian Ford, shared his insights on the outlook of the temporary power industry in the Middle East. He also discussed how generators running on gas and dual-fuel are gradually gaining ground. Highlights...

What has led to the rise in the power rental market in the Middle East and North Africa (MENA)?

First of all, it is important to note that the rental power industry in the Middle East, as with other regions in the world, goes in cycles, and is dependent on the prevailing market situation and activities. 

The buoyance of the rental power market in the MENA region is spurred by several factors.

• Utility shortages, particularly in KSA, Kuwait and Iraq, especially during peak summer months 
• The gradual recovery of the construction industry in UAE and Saudi Arabia
• Sustained production of oil & gas and repair & maintenance of refineries and associated infrastructure
• Absent or unreliable electricity connection in many areas in the region
• Regional growth in population and upgrades in the standards of living
• The availability of diesel, and the nascent increase in the supply of natural gas, particularly in African markets 
• Large industrial customers companies turning to rental power to maintain the effectiveness/productivity of their operations in times of power interruptions or peak shaving
• Looking forward, there will also be significant opportunities for infrastructure rebuilding and development in like Iraq, Libya and Syria

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

Saudi Arabia, Qatar and the UAE have been demonstrating high economic growth rates buoyed by industrial and commercial development. As such, these countries have consistently been the biggest market for gensets in the region, be it for rental or for sales. On the sales front, a recent report by Frost and Sullivan show that the genset market in the GCC is set to grow to as much as USD 950.4 million in 2018, largely due to intensive construction activities, prevention of transmission and distribution bottlenecks and determent of power shortages. Rental figures follow a similar trajectory.

It is interesting to note that certain markets, like the UAE, reflect encouraging genset sales figures because they are vital hubs for re-exporting generators to nearby markets.

A number of other Middle Eastern markets, like Yemen, Iraq and Syria, are currently going through a difficult period. 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? Upcoming trends in the genset market for the MENA region?

It is expected that the diesel genset market will continue to grow in the next several years, riding high on the wide availability of fuel, fuel safety and economy and ease of installment of diesel equipment.

We are noticing however 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 vigor in many countries around the world.

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 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 also helping to overcome these obstacles.

Side-bar: How do dual-fuel gensets work?

• Operate on a blend of diesel and natural gas fuel
• They start operating with diesel as the fuel
• As gas becomes available, the technology blends the gas with the diesel, substituting natural gas for diesel.
• When a sufficient supply of natural gas is available for stand-alone operations, then the existing power plant can be easily replaced with 100% gas-fuelled generators

What are the preferred ranges that are most popular in the region and the industries that are catered to? 

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 of 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 large-scale 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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Temporary Power Plants Support Hydropower Generation

Many countries around the globe whose electricity generation is mainly dependent on hydropower are being adversely affected by the extended and intense El Niño phenomenon. El Niño, a cyclical meteorological phenomenon, brings droughts in a number of regions in the world, causing hydropower facilities to fail to generate enough electricity for residential and industrial consumption.

In cases like this, utility providers or governments of hydropower-dependent countries can find merit in hiring large-scale temporary power plants. Rental power plants can instantly fill in the gap in electricity supply without the need to heavily invest in permanent power infrastructure or wait years or decades for the completion of one. As large-scale rental generators are modular and containerized they can be rapidly delivered to and installed anywhere in the world, and can be configured to the requirement of any city, region or even an entire country. They are fully capable of working in remote locations and in areas where grids or substations are outdated, damaged or absent. They can be fully constructed and operated in a matter of weeks, and can be ramped up or scaled down based on the customer’s consumption.

Aside from proven reliability and ease of installation and operation, large-scale temporary power plants also boast of sustainability and environmental stewardship. Modern large-scale rental generators are able to run on a variety of fuels, including natural gas or dual-fuel (gas and diesel) and thus surpass worldwide emission standards.

By virtue of their economy, dependability and environmentally friendliness, renting large-scale temporary power plants as a solution for seasonal electricity requirements yields many benefits to governments, utilities, industries and residents.

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Load Shedding, the Pharmaceutical Industry and the Quest to Save Lives

In light of the constant increase in electricity demand and a relatively moderate investment in the construction or refurbishing of power infrastructure, many countries around the world face the problem of regular load shedding and continual power outages. The effects of load shedding and power interruptions are felt by almost all sectors of the society and economy, including residents, the government, primary resource businesses and manufacturing/processing industries. One sector that has been ailing from constant power outages is the pharmaceutical industry.

Industry spokespersons cite that constant load shedding has been making it difficult for their companies to manufacture drugs and other pharmaceutical products, including potentially life-saving medicines for serious diseases, including cancer and hepatitis. “Shortage of power,” says one pharmaceutical facility operator, “is not only affecting our production, but has also been making the lives of patients around the world more difficult.” He said that power outages render more challenging not only meeting the local demand for medicines, but also fulfilling export requirements. “Before load shedding,” he continues, “we have been satisfactorily meeting the domestic pharmaceutical requirements, but now, we have found it increasingly difficult to meet our targets here and abroad.”

Industry players have been clamoring for the pharmaceutical sector to be exempted from daily rounds of load shedding and peak shaving, but the governments and the utility providers cannot always guarantee this. “There are days when we experience continuous power,” says another operator, “but most of the time, power is cut at unexpected times, and the outage lasts for hours.” He understands that residents, businesses and industries all share a limited supply of electricity, and a privilege of a continuous supply of power extended to the pharmaceutical industry will be at the expense of another industry or the residents. “We know that it is very difficult at this time for the utility providers to exempt us from load shedding or peak lopping,” the same operator continues, “so we have installed local power generation facilities within our sites.” The problem, however, is that their power production is not always reliable, and is not always sufficient for large-scale production.

Pharmaceutical facility operators may find benefits in supporting their local power generation facilities, like renewable sources, with large-scale standby power equipment, like rental power plants. Rental power plants are capable of providing a reliable and consistent electricity supply to industry-scale operations, and generating the exact amount of power as they are designed to produce. They can be ramped up or scaled down depending on the precise need of the customer, hence precluding instances of under- or over-sizing. So, for instance, if the local power facility produces sufficiently, then the rental power plants go on standby mode; but once the electricity supply diminishes, the temporary power plants activate and ensure that the desired amount of electricity is supplied.

As constructing rental power plants do not require a huge capital expenditure, implementing them does not mean an additional burden for pharmaceutical companies. The companies can pay the electricity supply as they go, and do not have to think of the maintenance and servicing of the plants.
 
With rental power plants, pharmaceutical production facilities can continuously operate to meet the local demand for medicines, and fulfill their export requirements. They can go on creating life-saving medicines for the most pressing illnesses of the world. While the governments and the utility industries construct and improve power infrastructure to eliminate load shedding, temporary power plants can ensure that life goes on not only for patients but also for the pharmaceutical industry.

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Load Shedding Throws Food Production into Disorder

Power interruptions affect the entire food supply chain – from primary production to the delivery of goods to consumers. Farmers are highly dependent on electricity for irrigation, livestock care and harvesting. Food processing plants rely on electricity to run their machinery and keep procedures thorough and safe. Food storage facilities depend on power to maintain the correct temperature in their stock rooms. Groceries and supermarkets have to continuously run freezers and chillers to keep food items safe for public consumption.

Food manufacturing and processing entities declare that the foremost challenge in this whole scheme of electricity supply inadequacy is the uncertainty around the schedule of load shedding. The unpredictability of when the power will go out makes it difficult for companies to schedule their operations around the outages. As food processing and manufacturing facilities cannot afford to shut down operations during blackouts or halt production processes once they have been started, a sudden loss of electricity and stoppage in production often result in million upon millions of wasted raw materials and discarded half-finished products. Not to mention that there are also processes that are completely dependent on biorhythms of animals, like milking or laying eggs – these cannot be scheduled around load shedding timings.

Let’s quickly look at the processing of fresh milk as an illustration. Once the milk is in a silo, it has to be treated, cooled and transported to a dairy plant for processing. It has to be kept at the perfect temperature, and then processed through various heating and cooling stages. This being so, a milk processing plant needs electricity 24/7, or it runs the risk of discarding unfinished products or producing unsafe goods. Either way, the financial and opportunity losses can amount to several millions.

The unwanted effects of power outages spill over post-harvest. Once food items have been processed and finalized for distribution, they have to be carefully stored at the precise temperature so their quality does not deteriorate and their safety is ensured. If, at any point, such a process is disrupted by temperature abuse, the products lose value or, worse, thrown away due to safety concerns.

Some food processing facilities have attempted to work around the problem by employing solar or wind energy facilities within their sites, but later on found out that such power sources were not always able to sufficiently produce for a huge production load.

While renewable energy sources are excellent options to support conventional power sources, they can become more viable if integrated with standby power generation systems, like rental power plants. Temporary power plants can help plug in the gap in electricity supply in instances when solar or wind power facilities inadequately produce. Rental power stations have been configured to generate at all times the exact amount of electricity as needed, and can be ramped up or scaled down depending on the requirement of the minute.

Food processing and manufacturing facilities may also find benefits in renting power plants during seasons of peak production. During months of increased demand for food products, food processing and manufacturing facilities cannot afford to limit or suspend production just because there is insufficient power, or they will lose huge economic opportunities to grow their business and expand their customer base. During such times, rental power plants can ensure the continuous supply of electricity for uninterrupted operations.

Large-scale temporary power plants can supply reliable electricity to large food processing, manufacturing and storage facilities all over the world. They are easily installed and commissioned, and can be quickly decommissioned as desired. Constructing rental power plants will not disrupt operations, as they are containerized and configured for plug-and-play installation.

As building temporary power plants do not require a large capital expenditure, food processing and manufacturing facilities will be able to pay for the electricity as they go, and not spend scarce Dollars on infrastructure construction and maintenance.

By employing fast-track, reliable and sustainable alternative sources of electricity, like rental power plants, food processing and manufacturing companies can ensure the health, safety and loyalty of the people that patronize their products.

In the next article, we will discuss how load shedding affects the pharmaceutical industry and how rental power plants can ensure the safety and efficacy of medicines and other pharmaceutical products.


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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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Julian Ford Joins Altaaqa Global as Chief Commercial Officer

With over 15 years of experience in the rental power industry, Ford takes the helm of the company’s strategic business development and top-line revenue generation functions

Altaaqa Global, a leading global provider of large-scale temporary power services, has appointed energy industry veteran, Julian Ford as Chief Commercial Officer (CCO), effective July 1, 2015. As the company’s CCO, Ford’s remit is to ensure that Altaaqa Global achieves revenue growth targets and overall commercial success, and to facilitate the formulation and implementation of innovative global commercial strategies.

Julian Ford, Chief Commercial Officer of Altaaqa Global

Ford’s career in the industry started at the time when the concept of power plants on a rental basis was just gaining ground. He had a hand in introducing the concept of power project rental to governments of developing economies, which allowed them to hire power capacity to address short term energy issues during times of hydropower shortage or other generation or transmission issues.
Ford was instrumental in taking the rental power concept to different regions across the globe, including Middle East and Africa, South America, East Asia and South Asia. “My vision then,” he said, “was for the rental power market to develop beyond its traditional local markets and become a truly global business. We started in the Middle East and East Africa and quickly expanded our operations in other regions of the world.”

A true visionary, Ford led the way for the development of the gas-fueled temporary power equipment market in the mid-2000s. “At that time,” explained Ford, “diesel costs were rapidly rising, and it was imperative to diversify the product offering and capitalize on the growth of natural gas reserves.” With keen interest in markets where gas reserves were not vast enough to be commercially developed, Ford pioneered a new business model that allowed countries to monetize their ‘stranded gas’ reserves to generate useful low-cost electricity for the national grid.

Ford welcomes the challenge of his new role, as he recognizes the continuous evolution of the rental power industry. “The role of temporary power has evolved from being a local, short-term, transactional activity to a major global project-based industry,” said Ford, and added that it is no longer uncommon to see power plants of 100 MW and up being rented on a longer-term basis. “Our objective is to create a highly skilled, motivated and experienced, world-class, power projects team. My vision is for Altaaqa Global 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.”

About Altaaqa Global
Altaaqa Global, a subsidiary of Zahid Group, has been selected by Caterpillar Inc. to deliver multi-megawatt turnkey temporary power solutions worldwide. The company owns, mobilizes, installs, and operates efficient temporary independent power plants (IPP’s) at customer sites, focusing on the emerging markets of Sub-Sahara Africa, Central Asia, the Indian Subcontinent, Latin America, South East Asia, the Middle East, and North Africa. Offering power rental equipment that will operate with different types of fuel such as diesel, natural gas, or dual-fuel, Altaaqa Global is positioned to rapidly deploy and provide temporary power plant solutions, delivering electricity whenever and wherever it may be needed.
http://www.altaaqaglobal.com

About Zahid Group
Zahid Group represents a diverse range of companies, offering comprehensive, customer-centric solutions in a number of thriving industries. Some of those include construction; mining; oil & gas; agriculture; power, electricity & water generation; material handling; building materials; transportation & logistics; real estate development; travel & tourism; waste management & recycling; and hospitality.
http://www.zahid.com

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