Infographic: Bringing More Than Power

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Power Leads to Economic Resilience

Africa is intensively pushing to build and grow its economy on the back of increased domestic demand, aggressive infrastructure construction activities and economic interconnection among countries in the continent. In fact, in a recent annual meeting in Rwanda, the African Development Bank (AfDB), presenting its African Economic Outlook 2014, reported that the continent’s economy was expected to grow by 4.8% in 2014 and 5.7% in 2015, approximating its growth figures pre-economic downturn.

The ongoing economic efforts in the continent will, naturally, have to be supported by energy. Gone are the days of organic economies, where economic growth could be achieved through mere human and animal strength. In this day and age, almost all economies rely on power to sustain their activities and produce tangible results. Power has become an integral component of any economy or society that outages and blackouts could bring about devastating consequences.

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Africa’s power scenario
To support Africa’s ambition to achieve economic sustainability, diversity and viability, it will primarily need to boost its infrastructure to support the growth of its various industries. To achieve that, the continent will require massive amounts of power. Does it, however, have enough energy to sustain this power-intensive phase?

The International Monetary Fund (IMF) sounded a warning that an escalating power supply deficiency in Africa may hamper the projected 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.

With Africa’s population expected to double to approximately 1.9 billion people by 2050, and with the continent’s industries projected to require power at almost full capacity, 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 USD 300 billion in investments to achieve total electrification by 2030.

The power instability: The bigger picture
Sub-Saharan Africa was observed to have absorbed much of the blow of the recent power crisis. Blackout brought cities to a standstill and spelt terminal financial losses to small- and medium-scale companies. Mining, one of the region’s pillar industries, was severely affected, even prompting mining companies to shelve expansion plans and curtail local power usage.

Nigeria, for instance, a country that has three times the population of the Republic of South Africa (South Africa), only has one-tenth of the power generation capacity of the latter, and business in the country are reportedly starting the feel the effects of power interruptions in their daily turnover.

In Tanzania, a blackout that lasted for almost a month was experienced in Zanzibar when the underwater cable lines supplying power to the archipelago failed, owing to a huge surge in demand. As a result, residents needed to shell out USD 10 daily to run diesel-powered domestic generators, while businesses requiring refrigeration or heating had to suspend operations until power was restored.

In Angola, the occasional recession of the water level in some of the rivers affects power production, distressing allied services, like water distribution. Luanda’s water supply firm, EPAL, cited that various areas in the city experienced water supply shortage, owing to challenges related to power distribution.

The Democratic Republic of Congo (DRC), touted to be Africa’s biggest copper producer, in May 2014 advised mining companies in the country to suspend any project expansion that would require more power, amidst a power shortage that, the government said, would take years to resolve.

Even the Republic of South Africa, the region’s largest economy, was not exempt from power-related woes. In a communiqué in June 2014, Eskom, supplier of 95% of the country’s electricity, warned residents of a rolling blackout due to load-shedding, which, it said, was necessary to protect the electricity grid from total blackout. Eskom said it had begun scaling down maintenance to prepare for winter, but in the face of a rising energy 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.

At present, solutions are underway – but these, naturally, will not come without a hefty price and cannot be completed within days or weeks. 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 USD 171 billion in South Africa alone.

In order to sustain this projection, the governments in Africa have identified potential sources of funds, such as power rate hikes and foreign investment. Yet, power hikes could stir social unrest and could prompt industrial entities to cut down on operations, putting jobs and production at risk. Foreign investment agreements, on the other hand, could take time to materialize, and the planning, designing, installation and commissioning of permanent power generation projects may entail several years, if not decades.

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How temporary power plants can help
Power is indeed a fundamental element for any economy to function, as every sector of the modern society, be it domestic, commercial or industrial, is, in a way or another, dependent on electricity. Nowadays, a power interruption affecting critical facilities, like 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 globalization and economic integration, the consequences could spill over regional, national or even continental borders.

Hiring interim power 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 construction of permanent power generation facilities or while waiting for the permanent power plants to be completed.

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, like Eskom in South Africa, Kenya Electricity Generating Company, Tanzania Electric Supply Company, the Power Holding Company of Nigeria, the Concelho Nacional de Electricidade in Mozambique, the Empresa Nacional de Electricidade in Angola and the Société nationale d’électricité in DRC, among others, can hire temporary power plants in times when the demand outpaces the supply, when the electrical grid becomes unstable due to a spike in electricity requirement or when power distribution networks are unavailable, like in the rural areas. This will allow them to bridge the supply deficit immediately. 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.

With an immediate solution on hand, the governments and the utility companies can avert resorting to raising the prices of electricity or curtailing the supply of power during peak hours. On a greater scope, an instantaneous resolution of Africa’s escalating energy supply challenges will preclude social and political instability and massive financial losses to businesses and individuals.

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The power to go further
The continent that was once regarded as a tail-ender in terms of development, is now making an aggressive move towards economic stability and viability. To sustain the economic growth that Africa is now enjoying, it is imperative that the governments in the continent address the critical issue of chronic power shortage, which could hamper the development of various industries in the countries. The effort that the African governments are putting to address this predicament is commendable, but there exist other entities that can help them to further alleviate the situation. Rental power companies propose solutions that address the issues of urgency, cost-efficiency, reliability, energy-efficiency and environmental safety. 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, political, economic and financial consequences.

IMIESA October coverage cover

The foregoing article was originally published in the October 2014 issue of IMIESA, published by 3S Media, South Africa.

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Robert Bagatsing
Altaaqa Global
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rbagatsing@altaaqaglobal.com

Putting power in the hands of the communities

Kenya has had a taste of the consequences of high costs of electricity and erratic electric power generation. Droughts experienced in recent years had driven water heights in major dams to precarious levels, that power industry authorities were left with no other conceivable choice but to rely on imported fuel to produce electricity. High cost of available fuel in the international market drove electricity prices up – a burden that would have to be passed on to industrial and private consumers that were fortunate enough to be connected to power lines.

While rising energy prices were the bane of these end-users, approximately 90% of Kenya’s rural population and an estimated 45% of the country’s urban residents were yet to gain access to electricity, while a projected 60% of Kenya’s total population still used biomass as a source of energy for cooking.

The energy situation in Kenya was far from being stable, to say the least.

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Kenya’s renewable energy potential

The country’s energy situation represented a daunting affair for any government to try to overturn. But somehow, something has to be started somewhere, so Kenyan authorities trained their gaze on renewable energy sources for solutions. Today, Kenya’s renewable energy sector is touted to be one of the most active in Africa, with investments in wind, geothermal, small-scale hydro and biomass rising from virtually zero in 2009 to approximately USD 1.3 billion in recent years. Kenya is considered to be the largest producer of geothermal power in Africa and is known as a world leader in the number of solar power systems installed per capita.

Kenya’s renewable energy sources hold enormous potential. For instance, experts from the African Energy Policy Research Network 2004 observe that, at an average, Kenya receives an estimated four to six kWh per square meter per day of solar insolation, which is equivalent to about 300 million tons of oil. The study adds that most areas in the country can enjoy the benefits of solar energy, because they receive more than six hours of direct sunlight per day.

Moreover, according to scientific studies, Kenya has one of the best wind resources in the world, averaging between three and 10 m/s, with northern Kenya even hitting record speeds of up 11 m/s. Experts suggest that wind energy facilities can be strategically installed along the coast and in areas where agricultural production is counter-intuitive, like in the Northeastern Province. The Lake Turkana Wind Project currently underway is poised to provide 300 MW of wind power to Kenya’s national grid.

While the country has already been thriving in geothermal energy production, experts say that only two per cent of the country’s geothermal potential has been tapped, adding that the total estimated potential for geothermal power capacity in Kenya is in the area of 7,000 to 10,000 MW. Currently, the Geothermal Development Company has laid out plans to drill 1,400 steam wells to provide steam for up to 5,000 MW of geothermal power capacity by 2030.

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It is not just power; it is empowerment

Beyond providing large-scale additional power to Kenya’s national energy generation capacity, renewable energy solutions hold a significance much closer to home. Owing to their flexibility and scalability, renewable energy sources could be locally installed in rural and urban communities, and in industrial facilities, encouraging power decentralization and source diversification. Experts opine that this fact can potentially be a workable solution to over-dependence on hydro and thermal power, which could at times be unreliable or expensive. Decentralized and localized renewable energy projects will find merits in terms of mitigating the risks of climate change and environmental degradation, as well as of the rising prices of fuel in the world market. Giving local communities and industrial players the opportunity to “create” their own power will additionally pave the way to fully capitalizing on the renewable energy potential of Kenya and to unraveling further economic growth.

While localized renewable energy projects in Kenyan rural and urban communities and in industrial facilities are still in the nascent stages, there are technologies available that are able to sustain their progress and advancement. Mobile power technologies are designed and engineered to support power generation when permanent or renewable sources meet challenges in sustaining the electricity demand. As national frameworks are created to promote renewable energy investments at the community levels, temporary power stations can provide the power supply that installed renewable facilities are still not able to produce. As wind or solar power plants depend on unpredictable natural elements for “fuel”, interim generators will be able to supplement the generated power in cases when wind or solar supply is insufficient.

As Kenya improves its hydropower and thermal energy generation capacities, veering away from over-reliance on fossil-based power, mobile electric power stations will be able to support existing permanent power infrastructure in times when the national electric power requirement outstrips the supply. Owing to the fact that rental gensets do not require steep initial investment to procure, the Kenyan government will be able to preserve the budgetary allotment aimed at the construction of renewable energy facilities at the grass-root levels.

Empowering local communities

National economic growth may never be sustainable if a significant percentage of a country’s population and industries has yet to be empowered. Today, with the advancement in research and technology, local electrification and community empowerment is within reach. Renewable technologies are maturing, and are now proving to be viable and sustainable sources of energy. As communities and industrial facilities enjoying the benefits of electric power grow in number, the road map ahead of a country’s economy becomes increasingly clear.

Empowerment, however, does not simply mean being connected to the grid. Encapsulated within the very essence of the word is giving rural and urban communities alike the opportunity to care for their environment, to plot their own future and to traverse their own paths to economic and social advancement.

Kenya Engineer Sept 2014 Cover

The foregoing article was originally published in the September-October 2014 issue of Kenya Engineer, published by Intercontinental Publishers, Kenya.

 

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Robert Bagatsing
Altaaqa Global
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rbagatsing@altaaqaglobal.com

Hydropower-dependent Economies: The Big Dry

Many developing countries are gradually embracing the hydropower technology as one of their main sources of electrical power. Countries in Sub-Saharan Africa and in the Middle East are actively pursuing the construction of large dams to develop more hydropower resources. In recent years however, hydropower facilities have been facing power generation challenges, largely owing to variations in climatic parameters brought about by climate change and discrepancies in the pattern of seasonal months. Some countries have been experiencing low amounts of rainfall, and the heavy rains expected to kick in during the wet months have been delayed. As a result, water levels in many reservoirs in developing countries have dropped, causing the amount of electricity generated by hydropower plants to recede.

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Countries that have anchored a major part of their national power supply to hydroplants are bound to encounter economic, social and political obstacles in the face of changes to weather patterns. Myriad case studies conducted throughout the world have shown that lack of reliable power sets off a disastrous domino effect, wreaking havoc in several industries, including utility generation, industrial and commercial production, telecommunications, transportation, urban and rural electrification, mining and petrochemicals. Massive losses in finances and in social services could result in public unrest, often leading to street protests and demonstrations. As the country’s political stability may be threatened by social discontent, transformative investors could lose confidence altogether in pouring in money in ongoing and prospective projects in that country.

Emerging countries can find benefit in studying the impacts of climate change and prolonged summer months before and during the implementation of hydropower projects. Proactive approaches such as this may help them respond and adapt to the effects of climate change, and save costs in maintenance and refurbishment in the long run.

Power for insufficient power
In cases when the power generation capacity of hydropower plants is not enough to meet the existing energy demand during extremely hot months and days of elevated temperatures, there are available technologies that are capable of supporting them, like large-scale mobile rental power generators. Employing temporary power technologies can potentially be an integral part of any proactive approach to counter the effects of climate change on hydropower facilities. For one, interim electric generators represent a cost-effective alternative when supplemental power is required for short periods of time, like during droughts or prolonged absence of rain. As procuring them does not require large capital outlays, provisional power technologies can secure a government or a utility company’s cash flow by not necessitating considerable initial expenditure.

Because every minute counts during potential electricity interruptions, such as load shedding or electric blackouts, solutions to bridge the power gap should be swiftly and rapidly deployed at any given time. Owing to their flexibility and modularity, hiring rental power plants can be a quick and temporary solution for emergency and exceptional situations. Interim power stations are furthermore equipped with cutting-edge innovations that allow their capacities to be ramped up or scaled down, depending on the need of the situation. For instance, when rains start to kick in but are still not enough, utility companies have the liberty to lower the temporary power generation, gradually blending the productions from hydropower plants and rental gensets.

Choosing a power partner
As with the technology, choosing an appropriate interim power partner is an important element of a proactive initiative to mitigate the effects of climate change on hydropower plants. As was established in the foregoing discussion, hydropower generation has increasingly become one, if not the foremost, sources of power for many countries, thus hiring a temporary power provider entails momentous stakes. Imagine, when a country’s economic, social and political stability is on the line, should the government or hydropower companies entrust the power project to companies with little experience in large-scale operations?

There are several factors to consider in choosing a suitable mobile power provider. Governments and utility companies have to be discerning of a rental power supplier’s experience and track record in delivering executable, measurable and sustainable solutions to projects involving hydropower facilities. Industry stakeholders are advised to avoid dealing with backyard companies, which may not be able to deliver the required solutions on time nor on budget. This may create more problems in the long run, leaving vital institutions of a country – schools, hospitals, production plants, airports, telecommunication entities and petrochemical companies – suffering prolonged hours of no electricity and losing millions of dollars in cash and in opportunities by the minute.

Governments and hydropower companies should also consider the manpower expertise and after-sales service delivery of a prospective rental power supplier. A temporary energy partner should have spare parts and human resources readily available to carry-out after-installation support in times of emergency at any given location anytime.

Industry stakeholders should also be keen on a power supplier’s capability of providing flexible, scalable and turnkey solutions for a wide array of requirements. The potential power partner should have the appropriate expertise to study and evaluate a situation and to prescribe the exact solution up to the minutest exigency of a project. In order to translate plans into tangible and executable output, a rental power provider should have adequate and state-of-the-art technologies available in its product line.

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Proactivity is key
Reversing the effects of climate change may involve time – years or, even, decades. It entails paradigm shifts, not only in one country, but in all countries, developed and developing alike. The magnitude of the task at hand is enormous, and governments in several countries are working to commence the change. It remains to be a work in progress, and not all of us may be lucky to see its fulfillment. To support these efforts, governments and utility companies should be proactive and vigilant in moderating the consequences of climate change on the lives of their citizens and customers, respectively. As a sweeping transformation could not implemented overnight, the best thing to do at this very moment is to prepare. Humans of today are fortunate to have acquired the ability to foretell the effects of climate change, and to have on hand solutions to assuage or preclude them. The onus is now on us to put them to productive use.

AWW Sept 2014 coverage cover

The foregoing article was originally published in the September 2014 issue of Arab Water World, published by CPH Media, Middle East.

 

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Robert Bagatsing
Altaaqa Global
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rbagatsing@altaaqaglobal.com

Bringing Power To Africa’s Mining Industry

Experts herald the mining industry as the light of Africa’s future. With the prevailing power deficiency, however, will the roadmap ahead be dim? Robert Bagatsing Marketing Manager; Peter den Boogert, General Manager and Majid Zahid, Strategic Accounts Director, of Altaaqa Global CAT Rental Power provide the answer.

Electra Mining Spet 2014 Page 1

The tenacity that Africa has shown in the face of the recent economic crisis is nothing short of commendable. If numbers from the African Development Bank’s African Economic Outlook for 2014 are any indication, the continent’s future looks bright. Experts forecast growth rates of 4.8% in 2014 and 5.7% in 2015, and financial in-flows in the area of USD 200 billion.

Playing a major role in Africa’s notable economic performance is the mining industry, widely regarded as one of the chief pillars of the African economy – and not without reason. The mineral industry in Africa is one of the largest in the world, riding high on the continent’s vast 30-million-square-kilometer land area. Africa is richly endowed with mineral reserves, including bauxite, cobalt, diamond, phosphate rock, platinum-group metals (PGM), vermiculite and zirconium. Naturally, gold mining is the African mining industry’s bread and butter.

The world sees the enormous size of Africa’s mining territory, but much of the continent’s potential still remains unearthed. Experts say that a considerable percentage of Africa’s precious metal reserves are underexplored, owing to several financial and operational motivations, among which is the observed lack of dependable, viable and sustainable power. For instance, in a recent release, the government of the Democratic Republic of Congo (DRC) has advised mining companies to suspend any expansion plans or contractual modifications that would require extra power until further notice, in an effort to control the country’s demand for energy. The foregoing initiative from the government may have its benefits in the context of energy conservation, but it may definitely create economic and social deviations in the operations of the mining companies.

In light of this recent conundrum, from the prism of transitivity, a shortage in power supply could mean lost opportunities. With the postponement of mining expansion projects, additional mineral reserves, which could mean additional sources of revenue for operators, will remain unexplored for a longer period of time. A deficiency in energy could mean lost time, as plans that took years to finalize have already been chalked up, only to be discarded or shelved. A deficit in electricity could mean lost employment and income, as halting a project could lead to retrenchment.

With mining playing a major role in most of the African economies, an insufficiency in energy, leading to suspended operations, may have catastrophic wide-scale economic repercussions. Looking back in 2008, blackouts in the Republic of South Africa halted Anglo American, Impala Platinum Holdings and Harmony Gold Mining mines for five days – an incident that spelt a notable difference in the companies’ and in the country’s growth rates that year. A repeat of this predicament would imperil South Africa’s present economic projections, and in this day and age when economies no longer exist in a vacuum, particularly in Africa, where there is remarkable interdependence, a slight drop in one country’s economy may set off a domino effect.

The effects of load shedding on mining operations

In a recent communication, Eskom, the largest producer of electricity in Africa, announced that power cuts could potentially take effect if the surge in power demand in South Africa could not be tapered. This, according to industry experts, might bring about negative operational and financial consequences to mining companies. Mining consultants estimated that the rotational load shedding could result in losses in the area of millions of SAR (South African Rand) a day. Though efforts are being taken to ensure that production would continue in most of the mines around the country, studies pointed to the fact that the deepest underground mines, touted to be the largest employers in the mining industry in South Africa, would be most affected by load shedding. While this happened in South Africa, the same adverse effects to mining operations should be expected had the load shedding happened elsewhere.

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Making a difference with power

Before looking at possible solutions to Africa’s power woes, let us take a closer look at the anatomy of a power deficit. An electricity shortage may be caused by multitudinous reasons, including major planned or unplanned power plant facility refurbishment, a sudden spike in electricity demand, unstable electrical grid, emergency situations, turnaround and peak lopping or shaving, among others. In cases such as these, mining companies may opt to hire temporary power plants such to instantly supply viable and sustainable electricity to their facilities for an uninterrupted operation. Cost-benefit studies conducted across different mining facilities around the world show that the cost of renting interim power generation plants is marginal compared to the economic and financial impact that delays or suspension could bring to operations.

In other cases, mining operations that have localised electricity generation facilities, for instance, may experience energy shortage during summer or winter months, when there is a need to dedicate electricity for climate control. Without supplementary power, mining facilities could not meet the seasonal energy requirement, making the production environment unsuitable for working. Studies show that days with extreme temperature aberration are few in a year, thus mining facilities are discouraged to devote permanent power generation facilities solely for this purpose. This, therefore, makes a strong case for employing rental power plants, which is not as capital intensive as constructing a new, dedicated permanent power generation facility.

Interim power facilities, like the solutions offered by Altaaqa Global CAT Rental Power, a global provider of temporary energy solutions, could spell the difference between lost opportunities and breakthrough. Because Altaaqa Global’s solutions are flexible and scalable, they can be employed in a wide range of applications, be they underground mines, open-pit mines or ore processing facilities. As the company’s products are customizable in size, capacity and, even, in cost, they can be rented by large international mining corporations and smaller regional or local aggregates producers, quarry operators or miners. Thanks to Altaaqa Global’s extensive product range, the company can address any requirement, including the need for standby power, prime power, continuous power, load lopping, peak shaving, or for utility power distribution.

Altaaqa Global’s offerings could spell the difference between lost time and progress. The company has a stellar record in providing interim power generators where needed, when needed, even at a moment’s notice. With Altaaqa Global’s industry-proven experience and reliability, the company has delivered executable, measurable and sustainable solutions to myriad projects across the Middle East and Africa. Owing to the availability of spare parts and expert teams on the ground, Altaaqa Global has proven that it can provide after-sales support to installed and commissioned projects at any given location, at any given time.

Altaaqa Global’s presence could spell the difference between lost jobs and success. The company has an avowed corporate social responsibility program, one of which tenet is to alleviate the social challenges of where it operates through providing job opportunities, extending educational assistance and conducting awareness campaigns on energy conservation and environmental stewardship. Not only could Altaaqa Global’s products ensure the continuous operations of mining projects, thus of one’s employment, the company actually employs competent and talented locals in areas where it sets up its facilities.

The future, electrified

As one of the cornerstones of the African economy, the mining industry deserves a keen attention, particularly in light of the looming power insufficiency. Experts say that Africa’s future is crucially anchored on the mining industry, and for this reason, stakeholders in the mining industry, including the governments, the operators and the investors, are investing thought, labour and money to keep the sector thriving. Permanent power generation facilities, which could provide a long-term solution to the continent’s power woes, are gaining ground in most parts of Sub-Saharan Africa, but their fruition could take some time. While these are in progress, mining companies could opt to rent interim power generation facilities, which are capable of satisfying urgent requirements in a considerably shorter time, precluding disastrous repercussions of operational delays and suspension.

Post-scriptum: Power Solutions for Power Problems

As a response to the looming power supply instability, governments in the Sub-Saharan Africa are mapping out alternative power generation projects, which end is to supply more energy in the long haul. In DRC, for instance, the Grand Inga hydroelectric project, forecast to add 44,000 MW to the country’s power supply, is said to be underway, while in Zimbabwe, upgrades to the Kariba South hydropower and the Hwange thermal coal plants are well in the pipeline. South Africa is keenly looking at Kusile and Medupi coal-fired power stations, with each plant expected to have a generating gross capacity of nearly 4,800 MW.

Electra Mining Spet 2014 Cover

*The foregoing article was originally published in the Electra Mining Africa Preview Supplement, produced by Creamer Media, South Africa.*

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Robert Bagatsing
Altaaqa Global
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rbagatsing@altaaqaglobal.com

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.

END

* The foregoing article was published in the June 2014 issue of Energize (EE Publishers, South Africa). To read more: http://bit.ly/1pTKEgj *

Energize June 2014 cover
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Robert Bagatsing

Altaaqa Global

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rbagatsing@altaaqaglobal.com

Power supply deficit hindering African mining

The deficiency in power generation on the African continent is impacting on the mining industry’s ability to reach its full production potential, thereby impacting on the industry’s ability to boost the continent’s economy, says Dubai- based temporary power solutions provider Altaaqa Global CAT Rental Power marketing manager Robert Bagatsing.

Mining Weekly July 11 page 50

He tells Mining Weekly that power is necessary for all mining operations and that its absence could lead to significant financial, operational and social losses.

“It is crucial to maintain a continuous and reliable power supply at mining locations. A few minutes without electricity can halt operations and endanger the lives of mineworkers – for instance, in cases of extreme weather,” says Bagatsing, adding that a brief power outage can also impact significantly on the profits of an operation.

African Expansion

Altaaqa Global CAT Rental Power opened a Southern African branch, in Johannesburg, this year, which caters to several African countries, including South Africa, Angola, Botswana, Mozambique, Madagascar, Malawi, Namibia, Zambia and Zimbabwe.

Altaaqa Global Southern Africa territory manager Paul Heyns says the new office is part of the company’s drive to be closer to its clients and react more swiftly to their requirements. The expansion is part of the company’s over- arching vision of being Africa’s preferred temporary power solutions provider by 2022.

Altaaqa Global believes that upgrading existing power generation facilities and constructing new electricity plants to boost the supply of power to remote mining locations are two probable and lasting solutions to the power problems facing Africa’s mining industry.

However, Bagatsing says this is easier said than done, as it can take up to five or even ten years for a power plant to become operational.

“Industry stakeholders, including governments, banks, regulatory and policymaking bodies, suppliers and contractors, should all agree on the start-up of a new power project and should commit to seeing it through to the final production stage. It takes only one dissenting incident for a particular power project to be shelved.”

Bagatsing warns that mining companies cannot afford to continue facing the economic and operational consequences of unstable or absent power without assistance from other industry stakeholders.

Immediate Solution

With the mining industry’s reliance on energy and the impact of power supply disruptions on production and costs, an urgent solution is necessary to keep the mining industry afloat, says Bagatsing, adding that the industry needs a resolution now, not in five or ten years’ time.

“It may just be a matter of introducing the concept of interim power technology to the region. We believe that Africa will soon have a better understanding of the benefits of rental-energy technology and will, therefore, be able to grasp its potential.

“Our aim as a company is to provide the African mining industry with power supply solutions, which will enable companies to concentrate on their core business and not be distracted by impending power-related issues. They should focus on mining, while we focus on power,” he says.

Altaaqa Global sub-Saharan Africa regional director Hendrick Mtemeri says the company’s interim power generation facilities have proven to be viable and sustainable systems, in support of existing traditional electricity infrastructure.

“Rental power generators ensure continuous and reliable power supply for mining facilities, even if energy-related infrastructure is not available.”

He adds that establishing interim power plants can save governments and mining companies money on capital expenditure, as these savings could be invested in the construction of permanent power facilities.

Mtemeri believes temporary electricity facilities may also prove vital for the exploration and start-up phases of a project, and for expansion projects. Temporary power could also be useful amid extreme temperatures.

“A sudden power failure or load-shedding can happen, and having the services of rental power companies, like Altaaqa Global, can mitigate the effects of these unforeseen events,” he advises.

Mining Weekly July 11 page 51

About Altaaqa

Altaaqa Global, a subsidiary of Saudi Arabia-based Zahid Group, has been selected by construction and mining equipment manufacturer Caterpillar to deliver multimegawatt turnkey temporary power solutions to mine sites worldwide.

Altaaqa Global owns, mobilises, installs and operates efficient temporary independent power plants. It focuses on emerging markets in sub- Saharan Africa, Central Asia, the Indian subcontinent, Latin America, South-East Asia, the Middle East and North Africa.

Altaaqa Global East Africa territory manager Oduor Omolo says the company supplies a range of products that have been custom-made to cater to the needs of the African mining industry.

“We have engineered technologies that promote energy efficiency and encourage environmental stewardship. We can produce electricity with natural gas power generators that guarantee low emissions.

“The emissions of this type of rental power plant generator are nontoxic. Therefore, the generator does not require after-treatment. Moreover, gas generators are 55% more cost efficient than conventional power generators,” boasts Omolo.

As a temporary power provider, Altaaqa Global believes its role does not end when the power generators are switched on, but extends to the constant monitoring of the health and operation of each generator, ensuring an uninter- rupted supply of electricity.

Meanwhile, the company has established a central monitoring system capable of observing interim power plants worldwide. The control centre systematically identifies problems, monitors the performance of each generator and assesses the reliabilities of every power plant globally for 24 hours a day, everyday, explains Bagatsing.

He adds that, when after-sales services are needed, Altaaqa Global has spare parts and an expert team of engineers ready for deployment at any location worldwide.

END

* The above article originally appeared in the July 11-17, 2014 issue of Mining Weekly, published by Creamer Media. Read more: http://bit.ly/1jwDTOB *

Mining Weekly July 11 cover

 

PRESS INQUIRIES

Robert Bagatsing
Altaaqa Global
Tel: +971 56 1749505
rbagatsing@altaaqaglobal.com