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Altaaqa Global’s Rental Gas Power Plants in Cameroon Go Live

Completed in just 21 days and boasting a combined capacity of 50 MW, the temporary gas power plants provide the country with a new reliable and sustainable source of power.

On April 28, Altaaqa Global’s temporary natural gas power plants, with a joint capacity of 50 MW, were inaugurated at the Logbaba power plant site in Douala, Cameroon. The ceremony was attended by Dr Atangana Kouna Basile, Cameroon’s Minister of Water Resources and Energy, members of the government, and senior executives from Eneo Cameroon S.A. – the country’s integrated utility company – and Gaz du Cameroun (GDC), a wholly owned subsidiary of Victoria Oil & Gas (VOG). The rental gas power plants were installed and commissioned within just 21 days from the arrival of the equipment at the intended power plant sites.

Eugene Lee, Construction Director of Eneo, H.E. Atangana Kouna Basile, Cameroon’s Minister of Water Resources and Energy, Majid Zahid, Strategic Director of Altaaqa Global, Kevin Foo, CEO of Victoria Oil & Gas, Joel Nana Kontchou, CEO of Eneo

Eugene Lee, Construction Director of Eneo, H.E. Atangana Kouna Basile, Cameroon’s Minister of Water Resources and Energy, Majid Zahid, Strategic Director of Altaaqa Global, Kevin Foo, CEO of Victoria Oil & Gas, Joel Nana Kontchou, CEO of Eneo

Collaborative Business Model

The successful completion of the temporary gas power plants stands as a testament to the viability of a synergetic business model featuring contributions from the government, the utility company, the fuel supplier and the equipment provider. The Cameroonian government and Eneo were the clients in this particular project, with Altaaqa Global providing the power generation equipment and taking responsibility for importing and installing the generators at the Logbaba and Ndokoti (Bassa) sites, while GDC supplied the gas to the rental gas power stations at both sites.

Against this backdrop, Peter den Boogert, CEO of Altaaqa Global, said: “We are very proud to have been involved in this project, and to have collaborated with Cameroon’s government, Eneo and GDC. Altaaqa Global is greatly honored to have contributed to Cameroon’s national energy strategy, and to have had the chance to promote the greater good of the Cameroonian nation. The success of this project proves that creating synergy among entities that value service and integrity above their own interests means that anything can be achieved. Here, we have witnessed that as a whole we are greater than the sum of our parts”

The business model also proved to be economically beneficial to the service providers, being referred to as “a true game-changer” by Kevin Foo, CEO of VOG, who continued: “[Through the agreement with Eneo] We have secured a major near-term user of gas for our operations in Cameroon, and we are now becoming an active part of the equation in Cameroon’s energy sector.”

Environmentally Friendly Technology

In addition to the collaborative business model that led to its successful completion, the project can also boast of its environmental stewardship, with the power plants being run on natural gas.

Altaaqa Global installed state-of-the-art gas engine generators at both sites to ensure that the power plants are not only dependable, but also environmentally friendly. In recognition of international emission requirements, which mandate the level of NOx emissions of equipment and industrial operations, Altaaqa Global engineered its gas generators so that an emissions threshold of 250 mg/Nm3 is not exceeded – even without after-treatment.

Speaking on the sustainability of the project, Majid Zahid, Strategic Accounts Director of Altaaqa Global, said: “Our temporary gas power plant systems meet the requirements of worldwide emissions standards and do not harm the environment. These rental gas plants are designed for performance and reliability, while simultaneously being more environmentally friendly compared to systems running on other fuels. Because the generators run on natural gas, they do not require expensive after-treatment, therefore making them more economical to operate owing to more cost-effective fuel prices.” He added that gas systems were more flexible in terms of fuel usage, and would retain their efficiencies even with different fuel varieties.

Cameroon’s Road to Economic Development

Electricity is vital to ensuring the on-going development of economies and industries – especially in emerging countries such as Cameroon. With the successful completion of these temporary gas power plants, the entire country will be provided with a reliable and sustainable source of electricity that will power Cameroon as it works to enhance its infrastructure and construct additional facilities to support its industries.

In this context, Joel Nana Kontchou, CEO of Eneo, said, “This project addresses the shortage in the country’s electricity supply that has been caused by a strong increase in demand, combined with a lack of a reserve in the electricity infrastructure. We are pleased to work with GDC and Altaaqa: Two companies that share our deep commitment to responding to Cameroon’s critical infrastructure needs.”

Cameroon’s economy has weathered the drop in prices among its principal exports – petroleum, cocoa, coffee and cotton – and has remained largely stable in recent years. In 2013, its GDP growth reached 4.9%, and experts predict that, so long as there are strong performances from the construction, oil & gas, transport, telecommunication and hospitality sectors, it will remain at around that level through 2015. Cameroon’s government has been working to promote growth and employment in the country through continuous development of energy, transportation and telecommunications infrastructure, and is also eager to modernize the country’s production equipment and processes – particularly in the agricultural and manufacturing sectors.

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

About Eneo Cameroon S.A.
Cameroon’s long-term electricity operator, Eneo (formerly AES-SONEL) is a semi-public company with 56% shares owned by Actis Group and 44% by the State of Cameroon. Eneo has an installed generation capacity of 968 MW. Its transport network connects 24 substations and includes 1,944.29 km of high voltage lines, 15,081.48 km of medium voltage lines and 15,209.25 km of low voltage lines. Its distribution network consists of 11,450 km of lines of 5.5 to 33 KV and 11,158 km of lines of 220-380 kV. Eneo has more than 973,250 customers, of which approximately 45% live in the cities of Douala and Yaoundé. Eneo employs 3,698 permanent staff.

http://www.eneocameroon.cm

About VOG and GDC
Victoria Oil & Gas (VOG) is an energy utility business and hydrocarbon producer, with energy supply operations in the industrial port city of Douala in Cameroon. The Company generates revenue through its 60% ownership of onshore gas production wells, and its energy utility subsidiary, Gaz du Cameroun S.A. (GDC), supplies cost effective, clean and reliable energy products to major industries in the region. Customers are primarily supplied with gas through an extensive pipeline network built by GDC in the Douala area. GDC products currently include thermal gas, condensate and gas for gas-fired electricity generation. GDC gas is attractive to customers due to its reliability, competitive price, low hydrocarbon emissions (compared to Heavy Fuel Oil) and adaptability to meet varied power requirement needs.

http://www.victoriaoilandgas.com/gaz-du-cameroun

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

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.

IMIESA October coverage page 1

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.

IMIESA October coverage page 2

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.

IMIESA October coverage page 3

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
Tel: +971 56 1749505
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.

Kenya Engineer Sept 2014 Page 1

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.

Kenya Engineer Sept 2014 Page 2

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
Tel: +971 56 1749505
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.

AWW Sept 2014 coverage page 1

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.

AWW Sept 2014 coverage page 2

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
Tel: +971 56 1749505
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, the Key to Economic Stability

There is one pivotal era in history that forever changed the way we look at productivity. At the dawn of the industrial revolution, productive output was fundamentally constrained by the limits of human toil or animal strength and by the boundaries of available land. The industrial revolution paved the way to exponential and sustainable economic growth, to a point that new generations were afforded the confidence that the economy that they will eventually shape would be better off than the one wrought by their forefathers.

At the height of the revolution, electric power was identified as a foremost factor in encouraging a viable economic growth – and that has not changed till now. As the demand for energy exponentially increases in today’s expanding economies, the need to support a country or a region’s electricity requirement becomes ever more crucial. In order to sustain the economic momentum of any given country or region, an ample and continuous supply of clean, viable and affordable energy is imperative.

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When power is not enough

The Indian Sub-continent is enjoying an economic upturn. According to a recently published market report from the Asian Development Bank, the South Asian region is predicted to grow by 5.3% in 2014 and by 5.8% in 2015. India’s economy, taken alone, is forecast to achieve growth rates of anywhere between 5.5% and 6%.

Behind India’s burgeoning economy is power: Power to manufacture, to drill for oil, to fly millions of passengers in and out of the country, to sail the seas with tons of export goods on board, to put on computers, to light up offices and to activate phone lines necessary for worldwide communications. India’s economic growth is a testament to one of the basic tenets of the industrial revolution: That electricity gives economies the power to catapult themselves to heights they thought would never be possible to reach. And India is reaping the fruits of that.

There is, however, a looming electricity supply issue that may challenge India’s continuous economic growth. Energy industry experts ascertain that there are 1.4 billion people in the world who have no access to electricity, and they estimate that over 300 million of them are in India. Recorded data in recent years show that demand for energy in India has consistently outstripped the supply, both in terms of base load energy and peak availability. Studies show that the country registers an 8.5% deficit in base load requirement and a 9.8% short-fall in peak load requirement. Seconding this observation, India’s Central Electricity Authority forecasts that the energy deficiency will affect all of the country’s regions and that, though Northern India expects a power surplus during the monsoon months (as its power generation capacity is predominantly dependent on hydropower), the spare capacity will gradually recede during the winter months.

India’s government has responded to the pressing situation by launching ambitious rural electrification programs, but the challenge proves to be vast that it could not be resolved in an instant. Ground research shows that approximately 400 million Indians still lose electricity during blackouts and that 35.5% of Indian households still has limited access to electricity. The compelling need to urgently address the economic repercussion of the imminent power instability was more vividly drawn by a study conducted by the Federation of Indian Chambers of Commerce and Industries in 2012. The document showed that power interruptions in India could result in approximately 10% in production short-fall, leading to revenue losses of up to INR 40,000 per day.

Who could forget the massive blackout of 2012 that left 700 million people in India without electricity? In what is touted to be one of the worst blackouts in history, twenty of India’s 28 states suffered the effects of the power interruption that almost incited social instability and protests for fears that the country was no longer in the position to support its booming local energy demand. The repercussion was almost journalistically indescribable: traffic jams all over the affected cities, babies wailing of heat, bodies half-burnt at crematoriums, patients gasping for every breath of life, miners trapped underground in complete darkness, passengers stranded in the middle of miles of track.

While stakeholders strive to bridge the supply gap, India’s demand for electricity is not showing signs of slowing down. Industry studies indicate that India’s manufacturing sector will continue to grow at an even faster pace and that domestic demand will increase more rapidly.

 

Power that sustain power

In these crucial times, India’s power generation infrastructure needs all the support it can get. The governments and the utility companies may be moving mountains to immediately resolve the present and the impending energy sooner, but with the scope and extent of the difficulty, they may not be able to do it single-handedly.

Temporary power generation companies, like Altaaqa Global CAT Rental Power, a leading global provider of interim energy facilities, have the capacity to support the existing power generation infrastructure, with the end of bridging the gap in electricity supply as, where and when the necessity be. Hiring power plants has tested and recognized merits, particularly in cases of emergencies or natural calamities, unplanned power failures, unforeseen delays in power projects, temporary plant shutdowns, load shedding or peak shaving. Signing an agreement with interim power providers can also prove beneficial when electricity distribution facilities are not available in certain areas, like in dispersed communities; when permanent power stations are still being constructed or commissioned or when energy generation facilities are being expanded or refurbished.

India’s initiative to harness alternative sources of energy, like geothermal, hydroelectric, solar, wind and tidal has proven to be effective, but seasonal changes may alter the operations of the aforementioned facilities. 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 if only to bridge the gap during the crucial months of seasonal change.

With its large 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. While a manifold increase in production bodes well for a company’s income, the consequent spike in power consumption may usher in operational challenges. It is highly probable that during the same 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 to hire a temporary power plant 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 for a company’s function. Peaker power plants (peakers for short) are an ideal solution offered by energy rental companies like Altaaqa Global to curb seasonal electricity demand during peak production months.

Of all unforeseen occurrences, a natural disaster may prove to be the most difficult to immediately address. Calamities like earthquakes, tsunamis and hurricanes have the capacity to destroy roads; interrupt power, water and communication lines and cripple transportation routes. In these cases, local or governmental entities may need assistance from a temporary power service provider that has the logistical capabilities to deploy, install, commission and run interim power plants anywhere in the world, on a short notice. Altaaqa Global’s temporary power products and genset technologies are the most efficient solution for a rapid capacity application, owing to their modular and flexible design, especially engineered for swift mobilization and start-up.

Power Today July 2014 covarage sheet 1

Partners in mobile power

To fully capitalize on the advantages of temporary power technologies, the governments and the utility companies in India need to be keen and 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. It is essential to ascertain if the rental power plant provider has thorough experience in delivering temporary power plants in complex situations, like city-wide utility electrification. The exercise of putting an interim power provider at the helm of a project or of a city’s electrification program will prove to be counterproductive if the chosen partner does not have the technical experience and the required organization to deliver what it promises. 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 damage. It should be heavily chalked up that utility companies should avoid dealing with backyard rental companies that will over-promise but will eventually under-deliver.

Though temporary power plants, like the ones provided by Altaaqa Global, 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. Whether the project is in the middle of a mountain for a mining operation or in the hot burning Gulf desert for oil & gas refineries, the rental power provider should have the capability to support its temporary power plants, whenever and wherever.

Proving solutions when needed and where needed is the prime reason for being of rental power companies, like Altaaqa Global. 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 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, then help is on the way to immediately solve the power crisis.

Providing solutions to power requirement of different entities does not follow a template nor is 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. Altaaqa Global has a wide range of large-scale temporary power plants running on gas, diesel or dual-fuel (70% gas and 30% diesel). It also offers systems on liquefied natural gas (LNG) and on compressed natural gas (CNG), in recognition of rigid sets of licensing and sustainability regulations that may exist in some parts of India.

Altaaqa Global also proposes state-of-the-art products that pushes the envelope of technological flexibility. One of the company’s flagship innovation is the variable operational mode that can switch from island to grid mode in just seconds. It provides the most scalable power solution to support base load, intermediate, peaking or standby power generation.

Altaaqa Global also offers the first and only substation-free power plants, specifically engineered to serve places in India where they may not be substations. These temporary power plants require no substations and can directly be hooked to the grid.

 

You do growth, we do power

The advantages of renting temporary energy facilities are multifarious, especially from the prism of cost-savings, flexibility and continuous energy supply. Hiring interim energy plants means that the governments and the utility companies in India will not have to shell out huge capital (CAPEX) to erect permanent power generation facilities if the heightened demand is just seasonal or momentary. Provisional electric power plants are also equipped with state-of-the-art innovations that allow them to increase or decrease the capacity following the end-user’s requirement. More importantly, mobile power technologies can provide electricity to any entity as it is needed, when it is needed and where it is needed.

End

* The foregoing article was published in the July 2014 issue of Power Today magazine (ASAPP Media, India). To read more: http://bit.ly/1omDahQ *

Power Today cover July 2014

PRESS INQUIRIES

Robert Bagatsing

Altaaqa Global

Tel: +971 56 1749505

rbagatsing@altaaqaglobal.com