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Sat 2 Jul 2005 04:00 AM

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Keeping business on the move with temporary power systems

Many companies were hard hit by last month’s power cut in Dubai, but for the city’s generator suppliers it was one of the busiest and most lucrative days of the year. As increased power consumption over the summer pushes the local grid capacity to its limits, the question is, could it happen again? Construction Week looks at how companies can benefit from buying or renting temporary power systems as part of a contingency plan for the future.

Keeping business on the move with temporary power systems|~|Blackout-200.jpg|~|The blackout in Dubai meant many businesses had to shut up shop early. For some, it was a nine-hour wait until a full service was restored.|~|The Dubai blackout on 9th June is thought to have affected around one million people. Power went off in homes and businesses across the city after the outage, which was most likely caused by an equipment failure in one of the transmission substations at Jebel Ali Power Station.

For Dubai, which is asserting itself as one of the region’s major business and tourist hubs, the blackout was a financial disaster and is estimated to have cost firms in the emirate hundreds of millions of dollars.

While most companies suffered major disruptions to their operations, for a few it was one of the busiest and most lucrative days of the year. In a matter of hours, generator suppliers in Dubai had sold out of stock as contractors rushed to prevent work on their sites from grinding to a complete halt.

“We had people trying to call up, the phone lines were jammed and people were literally queuing up outside the gate,” says Pat Fallon, general manager at Byrne Equipment Rental.

The region’s frenetic pace of construction combined with its rapidly growing population means that demand for power is being pushed to the limits. And as the Gulf temperatures soar during the summer months, the extra demand for electricity to run air conditioning will place further strain on the power infrastructure.

“Across the Middle East, demand for electrical power is currently experiencing substantial growth driven by sustained oil prices, infrastructure development and the renaissance of Iraq,” says Julian Ford, director of marketing and business development, Aggreko International.

“In certain areas, civil infrastructure is growing at such a rate that development of the local grid has problems keeping pace.”

While the blackout has raised questions about power capacity, some see it as a wake-up call for companies to have contingency plans in place to deal with similar incidents.

One of the main targets for generator hire nowadays are construction sites.

“In the utility sector, temporary power is proving to be an essential element of today’s energy market as companies increasingly recognise the relative merits of generator rental,” explains Ford.

Contractors often supply their own power on a construction site, regardless of its proximity to the electricity network. By using their own power source, contractors can offer a reliable and safe turnkey package with minimal disruption to the developer.

Aggreko has provided power on a wide range of construction projects in the region, from plant and industrial construction to residential and commercial projects. These include the Pearl-Qatar, Dubai’s Palm Island, Sohar Port in Oman, Arabian Ranches, Dubai Festival City and Dubai Finance Centre.

“Temporary power is used for many different applications during the construction of these projects,” explains Ford.

“During the foundation of a project, Aggreko provides power to operate dredging and ground compaction equipment. During the construction phase, Aggreko generators can supply power for site offices, labour accommodation and security lighting.”

There are two main uses for gensets in the Middle East, known as stand-by and prime applications. For stand-by applications, generators are installed permanently in facilities that have a high dependency on power and cannot cope with a sustained power outage, such as banks, hospitals, hotels and shopping centres.

Prime applications refer to where a generator supplies power to a site for several hours every day — in some cases continuously. Examples include construction sites and shipyards, supplemental power in peak season for the grid, and for factories and warehouses during planned maintenance periods.

“Generator purchase can be beneficial for clients who need power for the long term (probably over two or three years), providing the client is able to service and maintain the equipment satisfactorily,” says Ford.

“However, to provide a standby power system with the capacity to operate all the facilities on a site can incur a high degree of capital expenditure, which may be called into use very rarely. An alternative is to rent standby power packages at those times of the year when operations are most critical and power disruptions are most likely,” he adds.

Many contractors prefer to rent power generation equipment for their construction projects rather than buy, as it releases capital for other activities. It also means a fixed price solution and the flexibility to increase or decrease the amount of equipment on hire at short notice. Renting brings with it additional value-added service offerings including technical advice, 24-hour equipment service and rapid response times.

Fallon agrees that the rental option is proving to be a popular choice: “Rather than investing in expensive generators, people are opting to hire generators in times of power shortages. I think more people should have measures in place for an outage, but most think it’s a commercial risk that they’re prepared to take.”

The question on everyone’s lips is are we likely to see more
power blackouts similar to the one experienced recently in Dubai?

“I’m not sure whether what happened on 9th June would encourage people to have more stand-by capacity, but most people have taken the view that the chances of it happening again are very slim,” says Fallon.

Mohammed Al Hashimi, export sales manager, Kanoo Machinery Group, says: “As more and more construction projects get underway in Dubai, there will be a greater need for power capacity. But I think we’re unlikely to witness a similar blackout again in Dubai because the new systems being developed will be able to cope with the demand.

“But I do think there should be rules enforced whereby large buildings such as hospitals and shopping malls should all have their own power generation capacity,” says Al Hashimi.

It would seem that the most prudent way forward is for companies to think ahead and make contingency plans, especially for periods of critical operation or when disruption of the power supply is more likely.

“It is usually much too late to wait for a power cut before acting,” says Ford. “At the moment, the generator market is very active and there are nowhere near enough generators available to satisfy every emergency power demand.”

He adds, “Unfortunately, we tend to take our power supply for granted and it is only when events like this happen that we are abruptly reminded of our dependence on power. Even those with standby power generation systems can be caught out if the equipment has not been regularly serviced and operated.”||**||

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