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Energy in Africa – Power spare wheels

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Africa boasts a considerable potential of all kinds of renewable energy but time is running short. The generation capacity increase forecast for the African continent is estimated at 28 GW over the next five years. “But what happens if there are delays in the expansion plans?” asked Aggreko International’s Managing Director for North & West Africa, Christophe Jacquin, during the June 2011 Africa Energy Forumn, which took place in Paris. 

If such delays occur, countries have not choice but to use “emergency spare wheels”, in other words, diesel powered engines. But even this costly solution includes various choice: either the utilities use their own machines, which may mean an enormous consumption of fuel or they can opt for the rental of energy efficient up-to-date diesel power which consume less fuel. The problem, says Jacquin, whose company is one of the world leaders of the rental energy market is to find the right balance between the installed the capacity of the utility, the overall total production cost, the consumption and the emergency solutions. Some countries also choose sometimes to postpone big maintenance works in order to save money in the short term. But this policy is risky.
dod2Yet, in countries with large gaps between seasonal peaks of power consumption, the question is whether it is worth investing in important capacity increase if the peak period only lasts a few months. This is why Burkina Faso has opted for the seasonal rental of power, explains Christophe Jacquin. Accordingly, some clients also use Aggreko as a “cold reserve”. Their thermal generators are available but they are only operating as an emergency spare wheel. It provides comfort in the management of investments because one knowns that in the event of a problem, there is a “spare wheel”.
Finally, interim solutions provide an important service to electricity companies and avert the dreaded scenarios of deterioration of their position in the market, warns Jacquin. Indeed he points out, Africa’s power companies face a major challenge. They must at the same time produce cheep energy and recover their bills. Yet, the problem is that if they allow energy quality supply to deteriorate, they risk loosing their best clients, those who can afford to pay, such as corporations and industries which may prefer to become self-producers, as it is the case in Nigeria. That can be dangerous for the economic viability of the power companies. Indeed, if factories becomes self-sufficient, the poor electricity companies remains with the poorest revenue consumers who have a limited capacity of payment. In this context, hiring interim solutions may help them to retain their clients and invest in long-term capacities.
dod3There is no doubt that acute shortages all over the continent have created a niche for interim solutions providers such as Aggreko or Caterpillar. But they now face a new competitor: the Turkish Karpower International company, whose ‘power-ships’ represent a combined capacity of over 1,000 MW and an interesting solution for Africa’s coastal states. Karpower, has started prospecting the markets of Algeria and Morocco. Mauritania will follow suit, but also Guinea-Conakry, At the moment, the company owns a fleet of four floating power plants totalling a capacity of 1,000 MW. Eight more ‘power-ships’ are under construction in Turkish shipyards. Two of them should be operational before the end of the year. The contracts provide flexibility with the possibility for the client to rent quantities which can range between 45 MW and 250 MW according to needs over a period of three to five years. The solution offers direct connectivity to local grids from the on-board high voltage substations. Beside a “highly competitive” price, one of the advantages of the Karpower’s fleet is short time needed to start production since installations are ready to operate as soon as the ship docks in a harbour. The only requirement is to plug it in to the local grid.

 

François Misser

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