Seize the Opportunity

During peak production seasons, it is not rare for utility companies to set ceiling caps for electricity consumption or to charge a premium during hours of heavy energy demand. They even warn some companies to taper their energy usage or they will be compelled to pay a hefty penalty.

In cases such as this, what choice do industrial companies have?

PowerWatch India October coverage page 1

Many companies, especially those in consumer goods and industrial production, only have a handful of months that they regard as their peak production season. During these months, the requirement for their products exponentially increase, hence they find the need to use their production machinery at full capacity and to extend their operational hours round-the-clock. As a result of intense production activities, their power consumption spikes.

Will they have to control their electricity usage and risk foregoing the opportunity of making double or triple their off-peak revenue? Will they have to go on with the feverish production pace and choose to pay the penalty, which could take a sizable amount off the profit that they will be making?

Hiring the services of temporary power providers to augment the existing power supply is an option that industrial companies can take in times of peak production. Using mobile power stations will allow these companies to avoid paying a considerable penalty imposed by utility companies, and to work around the ceiling cap for energy consumption if they require more electrical power. There is a real risk that the increased tariff rate during peak hours and the fine enforced by the utility companies may take out a substantial amount from a company’s peak season revenues. In times like this, it may be more cost-beneficial to run alternative power sources, like interim power plants.

Because temporary power stations are modular, flexible and adaptive, they can be easily installed in a variety of customer locations anywhere in the world. Modern gensets have the capability of producing electricity according to customer requirements, precluding over- or under-sizing. They also have a plug-and-play configuration that allows them to be installed, commissioned and activated in as little as days.

More importantly, as a temporary solution when power demand is heightened, mobile power plants bring more cost-efficiency compared to paying hefty fines or limiting production activities. Several studies conducted in different industries in different countries show that in short- or medium-term use, the price of procuring, running and maintaining power plants for hire is significantly lesser than the cost related to the effects of lost business opportunities, customers, production time and raw materials.

The negative effects of peak lopping can be countered by engaging the services of mobile generator providers. Temporary power plants are cost-beneficial and bring about invaluable paybacks to the operations of industrial entities. With interim power plants, companies can take full advantage of a peak production season onwards to raising a more sustainable and prolific business.

PowerWatch India October coverage cover

*The foregoing article is based on what was originally published in the October 2014 issue of Power Watch magazine, India.*

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

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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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PRESS INQUIRIES
Robert Bagatsing
Altaaqa Global
Tel: +971 56 1749505
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.

Electra Mining Spet 2014 Page 2

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