Diesel still rules the GCC’s portable power roost

Experts tell Jochebed Menon how the temporary power market is evolving and why diesel generators are here to stay, despite a continuing push for more efficient and sustainable machines

SPECIAL REPORTS, Sectors, Altaaqa Global, Atlas Copco, Caterpillar, Doosan Portable Power, Gcc, Middle east, Portable power, Riyadh Metro

The demand and need for temporary power supply has rapidly increased over the years as consumption of electricity has been growing constantly across the globe thanks to increasing industrialisation.

With construction activity in the GCC among the highest globally, the need for temporary power solutions, especially diesel generators, is evidently high.

Robert Bagatsing, marketing manager, Altaaqa Global, a supplier of Caterpillar’s multi-megawatt turnkey temporary power solutions, says: “The power rental market has been constantly growing in the Middle East, owing to the region’s continuous economic growth and sustained industrial and infrastructure activities.”

According to a recent report by Research and Markets, the Asia-Pacific region is leading the diesel generator market, followed by the Middle East and Africa. It states that the gensets (diesel powered generators) market is projected to grow at a compound annual growth rate (CAGR) of 7.4% during the period 2016 to 2021. Due to a growing need for prime power and standby power sources, especially in oil and gas exploration sites, industrial infrastructure, and mining activities, demand for gensets is expected to rise over the next five years.

Gensets, which constitute a major subset of temporary power solutions, are used mostly during the construction phase of mega-projects. For example, Doosan Portable Power, a provider of generators and electrical equipment, has been involved in the construction process of large projects in the region, such as the East-West Pipeline in Saudi Arabia, new road networks in Egypt, and other major oil and gas facilities.

Chicago Pneumatic, a subsidiary of Swedish industrial company, Atlas Copco, is playing a key role in powering the construction of one of the world’s largest metro systems in the capital of Saudi Arabia. This manufacturer of temporary power solutions deployed 80 stationary generators on the project in May 2016.

The machines are being used to help construct Lines 1 and 2 of the Riyadh Metro project, where they are powering a large variety of applications, including road and tunnel lighting, site office electrification, electric power tools, and water coolers.

Himoinsa, another major producer of generators and lighting towers, has been also involved in many GCC projects, such as the Dubai Canal project, Kite Beach Boardwalk, and Doha Festival City.

With 2015 and the first half of 2016 witnessing a slowdown in construction momentum in the region, major players in the temporary power market are positive that 2017 will be slightly better.

Gaby Rhayem, regional director of Doosan Bobcat EMEA in the Middle East & Africa, says: “The business in the construction and oil and gas industry has witnessed a downturn of 30% compared to the previous years in the Middle East region. In contrast, the size of the portable power industry in 2017 is expected to be 10% higher than [last year].”

Keith Webb, general manager at Himoinsa Middle East, maintains a guarded stance: “The market [is] still recovering and the international market [is] still not globally back to sustained growth, this has left a lingering effect. The desire to remain cautious is still apparent. The clamouring to gain whatever part of the market is slowly becoming available is creating more and more competition.”

He also explains trends that the temporary power sector will undergo in the coming years: “There is likely to be a major move towards gas as an alternative to diesel overall for the power generation market, filtering from increased availability both locally and within the region.

“The price of fuel is still rock bottom and, in a market where the main controlling resource is oil, it is hard for the market to move away from its bread and butter without some influencing factors, usually financial or legislative pressure.”

For Bagatsing, diesel generators will continue to dominate the market. “It is expected that the diesel generator market will continue to grow in the next several years, owing to the availability, safety, and economy of the fuel, and ease of installation of diesel equipment,” he says.

Rhayem believes that the portable power business will remain constant and stable in terms of portable compressors in the Middle East over the next five years, but that “the electrical generator side will constantly increase, and will be 60% bigger than what it is today”.

As the market evolves, consumers of portable power – namely the developers of construction projects in the market, and government authorities – are pressing for more efficient and sustainable temporary power solutions.

Rhayem is of the opinion that the power industry is progressing towards achieving “more reliable power generation, less fuel consumption, energy saving, lower noise levels, safer and smarter operation, and more environment-friendly products”.

Bagatsing adds: “We [have] observed a gradual shift in solar and other renewable power generation technologies. We see this as a welcome development in increasing the availability of electricity in areas that require it, and in diversifying the energy mix to encourage long-term energy security.”

Himoinsa also realises the need for more efficient gensets as it moves forward with hybrid products. “[The] push for flexible solutions, improved fuel economy, or cleaner solutions, is always present. That’s why Himoinsa brings new technology every year, if it is hybrid power systems or gas powered gensets, we are constantly looking to the future,” Webb adds.

He concludes: “Government companies are looking towards greener solutions, but these are in evolutionary steps, rather than revolutionary, and the pressure is being applied only as much as funding will allow.”

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