Critical Supply

Genset manufacturers and rental providers are focused on providing cost-effective, reliable and innovative solutions for end users.

Within power there is a large spectrum of machines and offerings, from the simplest low-cost generators to large, sophisticated gensets used for specialised and critical applications.

When it comes to complex jobs, many customers rely on rental companies for their expertise. In December, Aggreko signed a five-year contract to deliver a 24MW gas-battery hybrid power solution to United Steel Industries Fujairah steel mill. The mill is the largest of its type in the UAE, supplying 1.1m tonnes of steel components to the construction and manufacturing sectors.

Aggreko’s deployment includes 13 highly efficient gas generators delivering 19MW of primary power, and a 5MW battery system comprising five battery packs providing frequency regulation and back-up power. The battery system will remove the need for a spinning reserve and balance out sudden jumps in the mill’s load. Traditionally, this is managed by diesel generators that run constantly at part load, consuming excessive amounts of fuel and increasing overall carbon emissions.

“By using our proprietary monitoring software to inform our data-driven decision-making, we have also been able to deliver a 49% cost saving on fuel costs,” says Phil Burns, Managing Director for Aggreko Asia and Middle East. “We are delighted that we have been able to deliver a reduction in carbon emissions for United Steel Industries while still improving the overall fuel efficiency of the mill.”

Rental companies encounter a wide variety of projects, each varying in terms of scope and location, says Andy Carter, GM of Hertz Dayim. “Our smaller projects could be a stand-alone generator rental, short-term specifically for events, or for long-terms such as powering up a construction site. Larger projects could be dispatching 10MW power for seasonal events like the Holy Hajj pilgrimage, to uninterrupted power supply for shutdowns or medical facilities,” he explains, noting the ability to support different market sectors with varying scales of power requirement.

For the Holy Hajj pilgrimage, Hertz Dayim provided temporary power of 10MW. “Preparation and coordination activities were initiated weeks in advance, with mobilisation of over 40 units across an area where mobility is the major challenge,” said Carter. “The team completed the ground preparation well ahead of time, with power services functional before the first pilgrim entered the holy site. We had a service team in place 24/7 to cater to any unforeseen downturn. The overall project was a success, with zero downturn and uninterrupted power supply for the entire duration.”

One constant is that all rental clients require their supply partners to provide complete power generation solutions, says Carter. “This includes site survey, technical recommendations, supplying all ancillary accessories. This also includes back-up supply, which means uninterrupted power supply, always.”

Hertz Dayim’s footprint extends across Kuwait and Saudi Arabia, with KSA its main area of operations, bringing into play the large distances and isolated work-sites found in the kingdom. “The majority of our equipment is used in remote locations that at times become difficult to monitor both in terms of usage and breakdowns,” says Carter. For this reason, the firm’s power units are all fitted with telematics to provide real-time machine performance updates such as fuel usage and engine performance.

The rental company’s unique selling point is the low average age of its fleet, which enables it to provide the latest technology to customers. “Our association with leading blue-chip manufacturers ensures that our equipment delivers optimal productivity,” says Carter.

All about engines

There’s no doubt that the engine is the most significant component of a generator, both in terms of its function and in dictating the end price. To generalise, the market has a choice between simpler mechanical fuel injection engines – often coming from markets in Asia where there is less of a focus on emission standards – and direct fuel injection engines from regulated markets, where there is a laser-sharp focus on enhancing productivity and reducing emissions driven by regulations in the EU, the US, Japan and elsewhere.

Fabio Rigon, Vice President of EMEA at FPT Industrial, says the Middle East is an important market for the company, although this is mainly indirect; the Turin-headquartered company supplies power generation engines to many large genset manufacturers which sell into the Gulf, including Himoinsa, Generac and Pramac, and has a structure in the region to support distributors and dealers (though product support is also often carried out directly by OEMs).

Hertz Dayim says the low average age of its genset fleet is a unique selling point for the rental company.

Features of the FPT engines include low fuel consumption, an outcome of dedicated engineering focus. “We use a specific combustion chamber design, which helps us reduce fuel consumption relative to our main competitors,” says Rigon. The service interval on the engines provided to genset OEMs is also longer – competitors normally offer around 500 hours for the basic oil change service interval, while for FPT the service interval is 600 hours, he says, noting that this not only saves money for end users, but is also better for the environment.

With the focus on emission reduction standards, technology is a key differentiator between engine manufacturers. Even in countries with lower emission standards, such as in the Middle East, buyers still benefit from the investment in technology and engineering, given the improved efficiency of engines when buying a product with an FPT engine, notes Rigon. This is becoming increasingly important, as fuel costs have risen across the GCC and may continue to do so as governments pare back subsidies. For low-emission or non-regulated markets, apart from engine price, service support is essential to the overall package, says Rigon.

Network requirements

Within the genset market, there is also a wide variety when it comes to low-cost gensets. These are basically commodity items, compared to more expensive units for more advanced applications.

Daniel Crossan, GM at Himoinsa Middle East, says the firm has a strong brand in the market, with good results around the 200-700kVa range. “In that range, quality is an important factor, and as a European manufacturer and a premium brand we do well.” They see consistent sales in the lighting towers sector as well, says Crossan. “It’s a bit of a commodity item, but because we’re a manufacturer we can adjust a little bit on price depending on volume.” 

Himoinsa is also competitive on the project side, such as 1MW and above. However the sector is hotly contested, with major international manufacturers increasingly producing out of sub-continental Asia, Turkey and Lebanon to reduce overall product costs, says Crossan. With a total of 13 production facilities in Europe, North America and South America, Himoinsa also has a factory in China, allowing it to leverage lower production costs there.

When it comes to the smaller range – 5-100 kVa – the market is saturated by low-cost manufacturers. Most buyers at this end of the market are looking for a product that may only be used for a short time, versus larger gensets where there is more of a total-cost-of-ownership mindset among buyers, says Crossan.

Himoinsa has production facilities around the world, including in Europe and in China.

Buyers of larger gensets also typically have more rigid requirements around the security of the power supply, he says. “Security of power is very important, depending on the market sector. In the telecom sector, in locations where their infrastructure can’t be connected to the utilities network, generators are needed to run consistently to meet network requirements. These requirements may be as high as 98% or 99% uptime, and if these are not met, there may be quite harsh penalties for the rental company.”

Standby projects are another area where premium products are sought out. “For example, if you’re installing a standby sytem in a hotel or shopping mall or other site, it’s really important that if the power from the utility does go out, that the genset can start and will provide the power that is required for emergency services, HVAC, fire pumps or whatever else is required. It’s very critical that the genset works when called upon,” Crossan notes.

Crossan says Himoinsa is seeing a lot of competition in the standby sector, and its job is to convince customers of the need to buy a quality product that will perform as required when called upon. “Buying a cheap genset for a standby application which doesn’t run when required is kind of like having an insurance policy that is void from the day you buy it,” he says. “Hopefully they’re not needed often, but when they are, we have confidence that our product can stand up to what it is we have sold.”

Himoinsa also offers hybrid gensets – currently a buzzword in the market – with telecommunications a key sector for this. Himoinsa offers a hybrid unit with solar panel and a battery, which can result in significant fuel savings. “Hybrid is not a new solution, but it’s becoming more feasible, and the drop in prices on solar panels over the last five years or so has made a big difference to the overall TCO model.” It recently executed a project supplying 11 all-in-one-box units to a local rental company for use in the telecoms sector, which is currently undergoing trials. “The main constriction factor is the price of fuel – the less you run the generator the less fuel you burn, and so the less money you spend.” This is balanced against the cost of the solar panel, but for the boxes the firm engineered a solution whereby the batteries could withstand a much quicker charging time. Apart from the financial savings, this also reduces carbon footprint. Longer term, Crossan sees regulation and the price of fuel as key drivers of uptake of hybrid solutions and the push towards green energy.