POWER July 2014 - 46

DISTRIBUTED GENERATION
ket research report by MarketsandMarkets
(M&M), the global power rental market is
expected to grow from " an estimated $7.8
billion in 2012 to $17 billion in 2017 with a
compound annual growth rate of 17% during
the same period. " Global power rental market
revenue-generator rental plus revenue from
the temporary power plant-was estimated
at $6.4 billion in 2011. Roughly half of that
revenue derives from peak load installations,
with prime load and standby service making
up the other half.
To put those numbers in perspective, Aggreko,
the largest player in the market, says
that in 2013 it served customers in about 100
countries and had revenues of approximately
$2.5 billion.
There's good reason to be skeptical of
market report figures, in part because, as Altaaqa's
Keddis noted, the barriers to entry in
this industry " are fairly low, " especially for
local, small-scale generation rental. " Also,
this business is very dynamic with high
transaction rate. The combination of these
factors, in addition to the lack of transparency
in many countries, makes the industry
extremely difficult to track and size. "
And, as Cummins' Duncan noted, the size
and location of the market varies from year
to year. He said market studies he's seen estimate
that the temporary power opportunity
is in the region of $5 billion globally; this
can vary significantly by year, with large opportunity
existing in North America, Europe,
Middle East, Africa, and Asia Pacific. When
looking at market opportunity, it is important
to distinguish between local hire (short-term
rental) and power project markets (longerterm
rental) because the market drivers, applications,
and geographical presence are
significantly different, he added.
The most familiar uses of temporary power
are for construction sites, events, disaster recovery,
off-grid mining operations, and the
like. But utilities are also major customers.
These days, according to Aggreko, the largest
provider of temporary power, aging infrastructure,
grid instability, seasonal peak
shaving, transmission and distribution limitations,
planned maintenance, weather events,
and unplanned outages are all driving the market.
(See " Shifting Sands: The Middle East's
Thrust for Sustainability " in this issue.)
The M&M report found that the utility
sector is the largest user of temporary power,
followed by the oil and gas industry and the
industrial sector. Utilities and the event industry
are the fastest growing markets.
Geographically, according to M&M, the
largest markets are, in order: North America,
Middle East, and Asia-Pacific. However, the
report also found that the Middle East is the
fastest growing market.
At country level, the report finds that
the U.S. accounts for the largest revenue
share, followed by China, India, and Canada.
That list shouldn't surprise anyone, as
it includes the two largest industrializing
nations and the two countries experiencing
unprecedented shale resource exploration
and development. In fact, just last year, Aggreko
opened new service centers in Sas2.
Cross-border power delivery. Aggreko's 232-MW temporary power project on the
border of Mozambique and South Africa supplies power to both countries as well as Namibia.
Courtesy: Aggreko
katchewan and Texas to be closer to its oil
and gas mining customers.
And although temporary power is the primary
focus here, some firms also offer related services,
such as cooling and heating equipment,
compressors, heat exchangers, and remote
monitoring-markets that are also growing.
Changing Project Profiles
Temporary power has long been a staple in
the global resource development industry,
and that remains the case. But at least for the
market leaders, both the sizes and types of
projects have expanded recently.
Size. One of the biggest changes in the
industry over the past decade or two is the
scale of installations. Previously, GE's
Kempf noted, they were small by necessity,
but " electricity has become more and more
critical to sustaining the modern way of life.
The world's economy is electrifying and urbanizing,
creating large potential demand for
temporary power on short notice. "
GE has handled projects in excess of 600
MW in a single order, with first power put to
the grid within 60 days, Kempf said.
APR Energy's largest installation to date
was more than 450 MW across six sites in
Libya in summer 2013, but its largest singlesite
installation was 200 MW in Uruguay,
part of an overall 300-MW project (see Figure
1). The plants installed as part of these
two projects are still in operation.
New Roles for Temporary Power. GE's
Kempf identified two major trends his company
is seeing that were not part of the business
just 10 or 20 years ago:
■ Emerging economies that are attempting
to electrify and are challenged to meet
near-term power needs and get ahead of
anticipated growth.
■ Rapid and unexpected needs driven by
natural disasters.
Another newer role that Cummins is heavily
involved in is providing prime power to
U.S. military bases in war zones like Iraq and
Afghanistan. Cummins' largest installation
to date was at Victory Base Complex-East,
Iraq, a 74-MW Prime Power Plant. The project
consisted of a new 54-MW plant designed
and constructed by Berger/Cummins (a joint
venture between Cummins Power Generation
and The Louis Berger Group), an integrated
and previously existing 20-MW plant, an
electrical infrastructure upgrade consisting
of a new 100-MW bus/switchgear, 40-MW
substation, six new 11-kV overhead distribution
feeders, and a fuel farm constructed to
supply the power plant.
According to Duncan, the plant resulted in
the removal of 103 spot generators, resulting
46
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