Road to Growth

Economic excitement is back in many countries in the world. Construction activities have picked up, investment is flowing and manufacturing has once again gained momentum. India’s economy, for instance, reflects a buoyant growth rate of around 5.3% in 2014 and 5.8% in 2015, riding high on intense government and private sector funding and on an aggressive push to build new and improve on existing public and industrial facilities. Naturally, India’s new found economic vitality has attracted entities and professionals from all over the world to set up shop and work in the country, respectively. From information technology to industrial manufacturing to consumer goods, the best global brands are flocking to India as a safe bet of investment.

Powerline July page 1

While the foregoing bodes well for the future of the country and its people, the frenetic pace of economic and social activities in India is taking its toll on the country’s power supply. A study conducted by India’s Central Electricity Authority reported that energy deficiency would be felt across the country and that the spare power capacity of the northern regions would gradually recede. The situation described above has actually been looming for a time now: Recorded data in recent years showed that demand for energy in India had consistently outstripped the supply, both in terms of base load energy and peak availability. India, the data suggested, registered an 8.5% deficit in base load requirement and 9.8% short-fall in peak load requirement.

The government, in recognition of the foregoing, had initiated rural and urban electrification projects that comprised power plants that run on traditional and alternative energy sources. The discrepancy between the rates of the addition of electric power supply and the growth of demand, however, is that wide that the available energy is never enough to fulfill the requirement. And the gap is observed to be continuously growing, whether in generation, transmission or distribution….

The repercussion of the power deficiency is real. In 2012, a massive blackout left 700 million people in India without electricity. In what is touted to be one of the worst blackouts in history, 20 of India’s 28 states suffered the effects of the power interruption that almost incited social instability and protest for fears that the country was no longer able to support its booming local energy demand.
With the feverish growth rate of economic and social activities in India, the country’s demand for electricity should show no signs of slowing down.

How can energy be sustained?
One has to face the truth that permanent power plant projects cannot be completed in days or months. Permanent energy facilities may take decades to complete, as planning, designing, approving, constructing and commissioning them entail time, effort and processes that go through different channels. What, then, can be done? Is there anything that can possibly support the permanent infrastructure while the new ones are being built?

Temporary power generation companies, like Altaaqa Global CAT Rental Power, have the technologies that have the capacity to support the existing power generation infrastructure, bridging the gap in electricity supply as, where and when the necessity be. In times when the power demand heavily outstrips the supply, rental power generators, running on diesel for example, can prove to be viable and affordable sources of energy to avoid disastrous power interruptions, unscheduled load shedding and widespread blackouts.

Though some parts of the country may have occasional spare power capacity, its availability may be periodic and can be severely affected by a disrupted seasonal pattern. For instance, some parts of the country where hydroelectric power stations operate may experience droughts or prolonged absence of rain, which in turn can drastically reduce the power generation capacity of the said plants. Solar or photovoltaic farms thrive during summer months but may experience shortage in production in months when days are predominantly cloudy or rainy. In these cases, rental power plants may support the power generation capacity of the current facilities to bridge the gap during the crucial months of seasonal change.

With its booming industrial manufacturing sector, production facilities in India often need to double, may be even triple, their capacities to meet the international production requirement in certain months, say during Christmas or Diwali. The consequent spike in power consumption may usher in operational challenges. It is highly probable that during the peak months, utility companies will set ceiling caps for electricity consumption or will ask production facilities to pay an additional consumption premium during peak hours. In this case, based on cost-benefit studies conducted among industries within the arc of peak months, it will be more economically sound for manufacturing facilities to hire temporary power plants than to pay an additional fee for every peak kilowatt used, shut down parts of the production complex when power usage is at its peak, or pay a hefty fine for using more power than what has been allocated. Peaker power plants (peakers for short) are an ideal solution offered by energy rental companies to curb seasonal electricity demand during peak production months.

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Power partner checklist
To fully capitalize on the advantages of temporary power technologies, the governments and the utility companies in India need to be discerning in hiring an interim energy service provider. In selecting a temporary electricity partner, one should look at the provider’s experience, organization, support system, rate of deployment and equipment reliability and sustainability before signing an agreement with it.

One of the most important things to consider when entering into an agreement with a rental energy provider is its track record in delivering executable, measurable and sustainable solutions to a wide array of projects. If the mobile generator company cannot supply the required power, it may cause more delays in the project, eventually leading to legal disputes and further economic damages. The Indian government and utility companies should avoid dealing with backyard rental companies that will over-promise but will eventually under-deliver. One should ask, ‘Can we really trust mom-and-pop rental power companies when we are supplying power to airports, hospitals, mining facilities, telecommunication entities and petrochemical companies?’

Though temporary power plants are engineered to endure even the harshest conditions known to man, they are by no means indestructible. The governments and the utility companies in India must keep in mind that the service of a rental energy company should not end when the electric power generators are switched on. The company should have the spare parts and the human resources to carry out after-sales support to installed and commissioned projects at any given location, at any given time. One should ask, ‘Do we stop a 100 MW power plant simply because there was no available spare part?’

An interim energy partner should have the capability to react, deploy, mobilize and commission temporary power plants at a moment’s notice. This means that the provider should have available equipment and manpower on the ground to carry out a rapid delivery. If the power rental company has the available equipment to deploy and a team of professional logistic personnel that can deal with the complexities of ports, customs and transportation, it can immediately solve the power crisis.

Providing solutions to power requirement of different entities does not follow a template nor is it governed by a rule of thumb. Each case should be carefully studied and evaluated in order for rental power companies to prescribe an optimal solution. The only way that an interim energy company can afford to meet the exact requirement of any client is for it to have the adequate and state-of-the-art technologies available in its product line.

Now, there is a solution
The power supply situation in India does not have to be a Catch-22. India could not possibly turn its back on investors and professionals saying that they could not stay in the country because they would eventually consume electricity, putting more pressure on the country’s power facilities. On the other hand, India could not go on growing its economy at the expense of its limited power supply that, when severely overwhelmed, might eventually collapse and cause a massive socio-economic tragedy. In times of tough choices, such as this, rental power plants can make a difference. With interim generators supporting the existing power infrastructure, India can go on its road to economic growth without sacrificing the country’s energy supply. While the permanent power facilities are underway, rental energy plants can bridge the electricity gap, allowing India to power its way to a brighter future.


*The foregoing article was published in the July 2014 issue of Power Line magazine (India Infrastructure Publishing, India).*

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Robert Bagatsing
Altaaqa Global
Tel: +971 56 1749505


Power to grow sub-Saharan Africa’s economy

While achieving a buoyant economic climate is a feat in itself, the real challenge lies in staying afloat. To sustain the economic optimism that Africa is now enjoying, it is imperative that governments, particularly in sub-Saharan Africa, address the critical issue of chronic power shortage, which hampers the development of various industries in the region.

Energize coverage June 2014
Africa has remained resilient in the face of the economic headwind of the previous years. This was the good news delivered by the African Development Bank (AfDB), which recently presented the African Economic Outlook 2014 in its annual meeting in Kigali, Rwanda. Africa’s economic growth, the continent-wide document suggested, was expected to reach 4,8% in 2014 and 5,7% in 2015, on its way to hitting the same numbers as it had before the 2009 economic downturn. The economic expansion, the report indicated, would be driven by domestic demand, infrastructure and a heightened continental trade in manufactured goods. Moreover, the report revealed that direct and portfolio foreign investments were projected to reach US$80-billion in 2014, and financial flows towards the continent were predicted to surpass $200-billion – four times its year 2000 level.

The above-mentioned growth projections bode well for the entire continent, and AfDB suggested that in order to sustain the momentum and achieve economic sustainability and a development breakthrough, Africa would need to participate more actively in the global production of goods and services. In this way, added AfDB, the continent could boost its economic diversification, domestic resource mobilisation and investments in critical infrastructure.

Is there enough power, though?

Since the industrial revolution, power has always been identified as a key factor in encouraging economic growth, and that still holds true today. In the light of Africa’s ambition of achieving economic sustainability, diversity and viability, the continent needs to ramp up its production and industrial activities, and to achieve that, it needs the staying power. The question, however, is “does the continent have enough energy supply to power its way to the future?”

Though the International Monetary Fund (IMF) concurred with AfDB, it sounded a caveat when it said that the observed power supply deficiency in the continent may rein in economic growth. It has been documented that some 25 countries in sub-Saharan Africa were facing an energy crisis, evidenced by rolling blackouts, and that some 30 countries in region had suffered acute energy crises in recent years. While the Key World Energy Statistics by the International Energy Agency reported that electricity generation in Africa rose from 1,8% in 1973 to 3,1% in 2011, the continent still remained to have the smallest share globally, despite being the second most populous continent.

Nigeria, for instance, a country that has three times the population of the South Africa, only has one-tenth of the power generation capacity of the latter, and enterprises are already complaining about regular power interruptions. In Tanzania, a month-long blackout was experienced in Zanzibar when the underwater cable lines supplying power to the archipelago failed, following a surge in demand. As a result, residents were paying $10 daily to run diesel powered domestic generators, while businesses requiring refrigeration or heating had to suspend operations until the power was restored. In Kenya, it has been observed that only 25% of the population had access to electricity, and that only 5% of the country’s rural areas had access to the grid. The occasional recession of the water level in some of Angola’s rivers affects power production, disturbing other services, like water distribution. Luanda’s water supply firm, EPAL, cited that various areas in Luanda experienced water supply shortage, owing to challenges related to power distribution.

Touted to be Africa’s biggest copper producer, the Democratic Republic of Congo (DRC) advised mining companies in the country to suspend any project expansion which would require more power, due to a power shortage that, the government said, would take years to resolve. While the country would reportedly institute an electricity-rationing program, mining companies were encouraged to postpone signing new contracts, in an effort to slowdown the growth of electricity demand in the country. Even the region’s largest economy, South Africa, was not exempt from power-related woes. In fact, in a recent communiqué, Eskom, supplier of 95% of the country’s electricity, warned residents of a rolling blackout due to load-shedding, which it said, was to protect the electricity grid from total failure. Eskom said it had begun scaling down maintenance to prepare for winter, but in the face of a rising demand, particularly during peak hours, it appealed to the public to reduce power consumption by at least 10%. If the power demand does not decline, then, the company said, load shedding would be the last resort to avoid a total power shutdown.

With Africa’s population expected to double to approximately 1.9 billion people by 2050, the World Bank said that a much higher investment would be needed to at least double Africa’s current levels of energy access by 2030. In fact, it is estimated that the sub-Saharan region would require more than $300-billion in investments to achieve total electrification by 2030.

Boosting energy

As a response to this pressing need, countries in the region are mapping out strategies to supply more energy through alternative solutions. In the DRC, for instance, the Grand Inga hydroelectric project, expected to boost the country’s power supply by 44 000 MW, is said to be gaining traction, while in Zimbabwe upgrades to the Kariba South hydropower and the Hwange thermal coal plants, forecast to add about 300 MW and 600 MW, respectively, are reportedly in the pipeline. South Africa is also reported to be cooking up the building of two new coal-fired power stations at Kusile and Medupi, expected to individually add approximately 4 800 MW of capacity.

The afore-mentioned initiatives are a testament to the tremendous attention that these countries are paying to their respective power generation challenges. Governments and private entities alike have been putting years’ worth of research and investigation, and billions worth of investment, to draw up the myriad adverse economic and social effects of electricity supply deficiency. A crucial element in the equation, however, is time, and in a world governed by more stringent business practices, faster turnarounds and heightened interdependency, the essence of time transcends chronos. Today, time may mean the difference between profit and loss, between political unrest and stability, and between economic growth and uncertainty.

The price of power: Focus on Southern Africa

Southern Africa was observed to have absorbed the blow of the power crisis in recent years. Blackouts brought cities to a standstill and spelt terminal financial losses to small- and medium-size companies. One of the region’s flagship industries, mining, was also unfavorably affected, prompting mining companies to halt expansion plans and repress local power usage. When Eskom deemed to cut down its electricity export to support its power demand at home, the electricity supply in Botswana, Namibia, Mozambique, Lesotho, and Swaziland, countries that import power from South Africa, was severely affected.

The foregoing, however, was not unexpected. In 1998, the government of South Africa apparently acknowledged the necessity of investing in electricity infrastructure amidst the threat of a power crisis looming large. It deemed, therefore, to privatise Eskom to inject new capital, thus encouraging a ramp up on its efficiency. The finalisation of any agreement, however, was reported to have taken longer than expected, and by 2008, the utility found itself unable to support the then-existing power demand.

Other governments in the region were said to have admitted to underestimating the trajectory of power requirements. In 2008, Botswana Power Corporation said that the energy forecast was skewed by the proliferation of new mines, which meant a steep spike in power demand, not only in Botswana, but also in other countries, such as Zambia.

At present, solutions are underway – but they, naturally, will not come cheap. Economic reports indicated that, at the prevailing growth rate of the demand from industries and residents, the region would have to double its power generating capacity by 2025, at an approximate cost of $171-billion in South Africa alone. Of that amount, $45-billion would supposedly have been needed before 2013.

In order to sustain this projection, the governments have identified potential sources of funds, such as approved power rate hikes and foreign investment. Yet, power hikes could stir alarm and protest from the citizens and trade unions, and could prompt industrial entities, like mining corporations, to cut down on operations, putting jobs and production at risk. Foreign investment agreements, on the other hand, could take time to materialise, and the planning, designing, installation and commissioning of alternative power generation projects may entail years, if not decades.

Bridging the power gap now

Unstable electricity production and regular power interruptions bring about a multitude of negative impacts to any country’s economy, business and citizens. In today’s world, power has become a fundamental element for any economy to function, as every sector of the modern society, be it domestic, commercial or industrial, is heavily dependent on electricity. Nowadays, a power interruption affecting critical facilities, such as hospitals, airports, telecommunications towers, data centers, mining facilities and oil & gas installations, has the potential to put an entire country, region or city to a standstill, and in light of globalisation, the consequences could transcend national or regional borders.

Hiring interim power generation plants to bridge the gap between the demand and the supply of electricity yields many advantages, particularly when there is a foreseeable delay in the fruition of permanent power generation facilities or when the temporary power is immediately needed. It was clear in the above-mentioned examples that countries in sub-Saharan Africa are looking to mitigate the observed deficiency in power supply by upgrading existing facilities, soliciting foreign investment to build new power plants and harnessing the potential of alternative sources of energy, including geothermal, solar, hydro and nuclear. While the aforementioned initiatives have recognised and acknowledged merits and potential, they may require further research, planning, designing and legislation, and additional physical facilities to be operational; and this takes time.

When time is of essence, rental power companies, like Altaaqa Global CAT Rental Power, are capable of providing solutions as needed, when needed. Utility companies in the region, can hire temporary power plants in times when demand outpaces the supply, when the electrical grid is unstable or when power distribution networks are unavailable, like in the rural areas. This will allow them to bridge the supply deficit without waiting for another day. Hiring power generators can prove to be a viable solution to power supply inefficiency, bridging the power gap while the permanent power solution is still in progress.

Powering the way to the future

The world welcomes the positive outlook of Africa’s economy. The continent that was once regarded as a tailender in terms of development, is now making an aggressive move towards economic stability and viability. While achieving a buoyant economic climate is a feat in itself, the real challenge lies in staying afloat. To sustain the economic optimism that Africa is now enjoying, it is imperative that the governments, particularly in sub-Saharan Africa, address the critical issue of chronic power shortage, which could hamper the development of various industries in the countries. The effort that the region’s governments are applying to address this predicament is commendable, but there exist other entities which can help them to further alleviate the situation. Rented power addresses the issues of urgency, cost-efficiency, reliability, energy-efficiency and environmental safety. In recognition of the indispensable role of electricity in today’s modern society, it is advisable that utility companies provide for a contingent power solution in cases of power interruption that may lead to operational delays and, ultimately, negative social, economic and financial consequences.


* The foregoing article was published in the June 2014 issue of Energize (EE Publishers, South Africa). To read more: *

Energize June 2014 cover

Robert Bagatsing

Altaaqa Global

Tel: +971 56 1749505