Category: Industry News

Global Power Rental Market Worth $17 Billion by 2017

By MarketsandMarkets

 According to a new market research report,”Power Rental Market by End-User Industry, Peak, Prime/Base & Standby Application, Diesel & Gas Generator/Engine Type – Global Trends & Forecasts (2012 - 2017)” published by MarketsandMarkets, global power rental market will 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 which is the addition of revenue earned through renting the generators and revenue from a temporary power plant is estimated to be $6.4 billion in 2011. Major users of temporary power are utility companies, oil and gas companies, manufacturing firms, shipping industry, events organizers, construction companies, and mining companies.

The Utility sector is the largest user of temporary power and hence contributes maximum share in global power rental revenue. Second largest user is the oil &  gas industry followed by industrial sector. Industrial sector mainly comprises of manufacturing and service industry. Utilities and event industry are the highest growing end user markets.

In terms of geographical markets, North America region is the largest market followed by Middle East and then Asia-Pacific. Middle East is the highest growing market which will make it the largest geographical market by 2017, lagging behind North America. At country level, United States has the maximum revenue share. China is the second largest country level market followed by India and Canada.

Increasing power demand, lack of grid stability & support, and tendency to rent instead of buying are the major driving factors of the power rental market. Economic developments of Asian, African and Middle East countries led the electricity demand exceeding the permanent power plant capacities. To support developments in those economies temporary power is used which has created a tremendous market for power rental companies. Aging permanent power plants is another factor which will increase the market size significantly by 2017. The major restraint affecting the growth of power rental market is regulations.

SOURCE MarketsandMarkets

 

Middle East Rental Power Demand to Increase in 2011

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Rental Solutions & Services, a global provider of rental power, temporary cooling and mobile water desalination predicts an increased in rental power demand. Robert Bagatsing, Group Marketing Manager and Peter Den Boogert, GM Power Projects talks about the future of rental power industry.

Market Trends from 2011 to 2015.

Robert Bagatsing, Group Marketing Manager of RSS talks about the market trends in the rental power industry. Bagatsing says “There will be an increase in demand for power projects around the world, particularly in developing countries. An estimate of 30% increase in rental power demand is forecasted up to 2015.” As the global economy is still devastated by the financial crisis, private power companies will still struggle to fund their permanent power plants. “Therefore, there is still a high demand for rental power companies to fill-in the gaps” according to Bagatsing.

In the Middle East, the demand is very high in several countries like Yemen, Iraq, Afghanistan, Kuwait, Qatar, UAE (Abu Dhabi, Dubai and Northern Emirates), Saudi Arabia, Oman according to Bagatsing. Africa rental power opportunities are in Nigeria, Ivory Coast, South Africa, Kenya, Angola, Algeria, Egypt, Sudan, Congo Rep, Libya. Latin America will also consume more power due to high lack of power infrastructure; countries like Brazil, Argentina, Chile, Mexico and Venezuela are a great opportunity. There are also opportunities in the Asian regions; countries India, Pakistan, Bangladesh, China, Philippines, Indonesia, Vietnam, Thailand will still demand for more power to continue its industrial growth.

Peter den Boogert, RSS General Manager for Power Projects compares rental power demand in Europe, the Middle East, Asia and Africa. Boogert says “Europe is a declining rental power market because it is a mature market. But there are still opportunities in Europe, although not as huge as the new emerging markets. There is a high demand in new emerging markets such as Middle East, Asia and Africa due to high economic activities but less investment in power infrastructure by the government. The economic activities of these new developing markets are increasing at a fast pace while its permanent power projects are delayed. There’s a huge demand for power but less supply from the utility providers.

Hire & Rental Market in the Middle East/UAE

According to Bagatsing, “the whole rental power industry worldwide will grow 30% due to utilities, construction, events, oil & gas, military and emergencies (natural disasters and manmade conflicts). Middle East, Africa, South America and South Asia will have the biggest share among the geographic
market.”

RSS expects that Middle East will grow at 20% in 2011. Driving the growth would be utilities, oil & gas, construction, events and military projects. Iraq, Afghanistan, Saudi Arabia, UAE and Qatar will be the driving force in the rental power projects in the Middle East. These markets will have the most opportunities for rental power companies. “RSS had a successful 2009 and we are forecasting a successful 2010 as well. In 2009, we have expanded our operations to Jeddah, Riyadh, Dammam and opened our new offices in Al Khobar and Abu Dhabi” Bagatsing added. “In 2010, RSS have opened our new office in Cyprus which will serve as a hub for the whole Mediterranean area; we also opened our Islamabad office to serve the Pakistan market; and we have opened our Muscat office to serve the Oman and Yemen area. Our Qatar operation is significantly increasing while Dubai, Bahrain and Kuwait remains on positive level. This year, RSS appointed me (Peter den Boogert) as the general manager for global power projects who will look after the international power project opportunities and strengthen the power project division of RSS. RSS is still continually buying generators for our expansion plans and continually hiring the best people in the industry. RSS expansion plans have been supported by Lloyds Banking Group which was impressed by our financial results. As a whole, RSS had a tremendous growth last year and this year as well. I think 2011 is going to be an exciting year for rental power companies like RSS” Bagatsing said.

New Technology for Independent Power Generation

“Efficiency is important for temporary power equipment due to the cost of fuel” according to Boogert. “Power generator manufacturers are now focusing its efforts in the efficiency of equipment, especially for rental companies. RSS power project division and RSS product research and development department is closely working with our engine and enclosure suppliers in developing the most efficient diesel generators. Fuel efficiency is a main variable in the rental generator market. If you have fuel efficient power generators, then you are in good position to market your products and services” Boggert added.

Bagatsing says “the product research and development of RSS has extensive studies on how to reduce fuel consumption. This is one of RSS main differentiating factor among all other rental companies in the world. RSS has exceptional highly efficient fuel generators that can save hundreds of thousands of dollars for our clients. These are all documented, proven and tested. By 2011, RSS Power Projects division is going to introduce hybrid generators that will significantly reduce the fuel consumption, thus enables the client to save thousands of dollars. Beside the typical small (30kVA, 125kVA) medium (300kVA, 500kva, 650kVA) and large capacity generators (800kVA, 1000kVA, 1250kVA) in the market, RSS will offer breakthrough hybrid power generators.

“Gas generator engines are also being developed towards a sustainable project” according to Boogert. “But if you are going to look at the overall cost, you will see that diesel engine generators are still a viable option as compared to gas. Availability of gas is a critical important factor to a successful power project, however, there are locations/countries where gas is not available and diesel is more preferred due to its availability” Boogert added.

New Power Rental Opportunities Emerge with Increasing Popularity of Distributed Generation

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The economic slump and cost reductions that are inhibiting capital expenditures on one hand are driving the power rentals industry on the other.

Although a non-core requirement, temporary power is essential and rentals offer companies the option of not investing in expensive back-up equipment.

New analysis from Frost & Sullivan (http://www.energy.frost.com/), North American Power Generation Rentals Markets, reveals that the industry generated revenues totaling $405.9 million in 2002. Total market revenues could reach $706.3 million in 2008.

“The fact that the North American market expanded exponentially during 1999-2001 means that the industry has served more customers than ever before,” says Frost & Sullivan Research Analyst K. Ravi. “Even though a lot of them might desist from renting generators in the short to medium term due to perceived needlessness, this is a potential end-user base that has experienced and understood the advantages of rentals in comparison with capital purchase.”

Increasing end-user awareness of rental benefits such as availability of extra capital for core activities, reduced equipment obsolescence, better inventory control, elimination of maintenance, warehousing and disposal costs, and greater cost control is driving demand in different segments.

Though market maturity and slow commercialization of new technologies are restraining factors, value added service offerings, quality service and quick response time can provide the key to customer retention.

“Pre- and post-rental services ranging from engineering assistance to maintenance support are emerging as a key distinguishing factor between competitors,” says Ravi. “Companies need to effectively communicate their business value proposition.”

Reliability concerns and waning capital investment are shifting end users toward the equipment rental concept. Demand is increasing from utility and industrial sectors besides the base market of construction and events.

“Broadening customer base and differentiating services now will enable vendors to gain market share,” adds Ravi.

Increasing homeland security initiatives and their need for back-up power are also creating opportunities. The rental market for non-diesel technologies is growing as emission restrictions increase.

Gas engines have demand in small and medium markets while gas turbines will aid top-end market growth.

“Economic recovery and greater consumer spending will prove the biggest shot in the arm for the rental industry,” says Ravi. “In the meantime, aggressive pricing, geographic expansion, extension of product and service offerings to low and premium market segments can ensure sturdy growth.”

North American Power Generation Rentals Market – Report: A307

 

Safe Work Practices in Confined Spaces at Power Plants

By: Michael Konopka

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Confined space work is often considered to be one of the most dangerous types of work performed in power generation settings. Confined spaces may contain hazardous atmospheres, they can trap entrants, and they generally can increase the hazards associated with otherwise common tasks. When the risks are not recognized, workers all too often regard incidents as surprises, but the hazards of working in confined space can be predicted, monitored, and mitigated. These “accidents” are caused by unsafe conditions, unsafe acts, or both; all accidents are preventable.

Several common dangers found in confined spaces include the hazards of working with electrical equipment, engulfment, and releases from pipes containing fluids or gases.

Electrical. Electrical energy poses several threats to the health and safety of entrants going into confined spaces. For spaces with a potential for flammable atmospheres, both the equipment already in the space and the equipment used in the work performed may become ignition sources.

Arc flash, thermal burns, and other electrical hazards are particularly dangerous in a confined space because it may be difficult for the worker to avoid accidental contact or proximity. In most settings, policy dictates that such equipment simply be de-energized and lockout/tagout procedures put into effect. However, this is not always possible in a power generation environment. Instead, complex operational controls and tagging systems must be used to ensure proper safety (Figures 1 and 2).

1. Restricted access. When dealing with confined spaces in power generation settings, operational controls and tagging systems must be used to protect the safety of workers. Courtesy: New Standard Institute Inc.

2. On alert. Confined space work at power plants requires the identification and removal of unsafe conditions, if possible; controlling access where conditions are inherently dangerous; and training entrants to prevent unsafe acts. Courtesy: New Standard Institute Inc.

Engulfment. Many materials have the potential to engulf an entrant. When small solids are in motion, they begin to act like a liquid. Coal, sand, dirt, and other materials flow, following the shape of their container. The presence of materials with a combination of fluid and semi-rigid properties makes storage areas potentially hazardous. This is an especially important concern for coal-fired plants, where employees must walk across loose coal. A parallel hazard is bridging. When an auger operates, material flows out of the bottom of the storage area. Material at the top may not flow down evenly, forming a temporary bridge out of the material. Walking over the surface of bridged material can lead to immediate engulfment.

Pipes Containing Fluids or Gases. Pipes that carry liquids or gases also present several potential hazards. The condition of a pipe may be hazardous, as a leak could quickly create a dangerous situation. Valves, piping, and infrastructure in confined spaces may be hard to access and are inspected infrequently, so it is important to consider that the risk posed by leaks may be unknown.

Materials being transported in lines and piping, such as steam or coolant, may be at extreme temperatures. Even without a release, such pipes are potentially hazardous if entrants must work in close proximity, as this scenario increases the likelihood of unintentional contact. Gases being vented or brought to a process can quickly create a hazardous atmosphere. Even without obvious damage to lines, leakage usually occurs in most piping systems.

Otherwise nonhazardous fluids, such as water, may not be immediately threatening, but the introduction of any fluid to a confined space creates potential hazards. Fluid may conceal trip/fall hazards, come into contact with energized equipment, or may fill the space. Entrance into lines themselves is always potentially dangerous, and dead or decaying matter in those lines can cause a buildup of hazardous gasses in short amounts of time. Lines used to transport saltwater are particularly vulnerable to such organic matter, even if filters and other measures are taken to clean the incoming supply. Valves normally under pressure from liquids in a line may not seal as well as expected when the lines are drained, so air quality testing is incredibly important in these areas.

Spaces such as large tanks present the possibility of a stratified gaseous atmosphere. Gases have different densities and can rise or sink relative to each other. Gases like carbon dioxide tend to pool, while gases like methane and acetylene rise. Depending on the temperature and source of the gas, or whether the atmosphere inside the space is disturbed, these hazards may be found anywhere in a confined space. When left for some time, the atmosphere in confined spaces will tend to separate out. The air must be tested at small intervals in a potentially stratified atmosphere. Any suspected areas of reduced ventilation, such as behind a baffle or an internal barrier, should be tested as well. Always use a remote probe or sampling tube, and allow workers to advance into the space only as far as the atmosphere has been tested.

Successfully Evaluate Potential Risks

The situations mentioned above are just a few of the potentially hazardous conditions that warrant a stringent evaluation procedure when an employee will be working in a confined space. This evaluation should also include measuring the size of the space as well as access and egress availability. Oxygen, carbon monoxide, hydrogen sulfide concentrations, and the percentage of the lower explosive limit (LEL) in the confined space must be measured and analyzed. The atmosphere within the confined space should be measured in terms of its LEL; typical permissible exposure level (PEL) and time-weighted average exposure (TWA) for different gases are illustrated in Figure 3.

3. Understanding the risks. Before a worker enters a confined space at a power generation facility, the plant safety officer should measure and analyze gases present to determine if the space has an explosive atmosphere or is otherwise a danger to human occupants. Courtesy: New Standard Institute Inc.

Even the slightest potential for a change in air quality or hazardous atmosphere is cause for concern. A space that has walls that converge inward or floors that slope downward and taper could trap or asphyxiate an entrant. Area inspections must identify all of these potential conditions so that efforts can be made to mitigate or control any and all hazards before work begins. It should be considered likely that the space will require a permit entry program, though efforts to control the condition will make entry far safer.

As important as what is evaluated is who does the evaluation. Make sure the group is properly trained and qualified to perform evaluations. If a contractor has his or her own designated safety personnel performing evaluations, make sure they are qualified as well as audited. Many power plants are stepping up their safety programs and requiring all outside contractors to comply with internal programs and use certified equipment. The fact of the matter is that people may cut corners to save time and money; however, there is no acceptable compromise when it comes to safety. Audits should be frequent and unscheduled, and each work site should have an internal person assigned to that task.

Emergency communications should be well defined and centralized. A phone number or radio frequency needs to be on every document and work order so no one has to look far in the event of an emergency. Attendants must be in continuous communication with workers. Special attention will be required if the space or work performed will be creating excessive noise and workers must wear hearing protection.

Layout of the workspace can be critical as well. If workers are not visible from outside the confined space, alternate means must be employed. Radios, video monitors, or other methods should be considered. Some systems of communication, such as tugging on a safety line or rapping on the barrier of a space, are prone to error or misinterpretation and should be considered a backup method that is only suitable for use in an emergency.

Customizing Safety Programs for Power Plants

Confined space work requires the identification and removal of unsafe conditions, controlling access where conditions are inherently dangerous, and training entrants to prevent unsafe acts. This can be an especially difficult task for power generation facilities. Besides the usual confined spaces found in many industrial settings, power plants have additional challenges, including high-voltage hazards, tunnels, tanks, coolant lines, and dozens of other safety threats. The U.S. Occupational Safety & Health Administration’s 1910.146 standard sets out the requirements upon which safety specialists and operational managers should base safety programs for their individual plants’ operations.

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