Gas Turbine Efficiency - overcoming your power problems

HIRE & RENTAL EQUIPMENTPower on demand: the role ofhire & rental equipmentCan purchasing power-generating equipment truly be cost-effective or does it createsignificant liabilities? Julian Ford, Marketing and Sales Development Director, AggrekoInternational, talks to WIP about the dichotomies which exist.Julian Ford, Marketing and SalesDevelopment Director, AggrekoInternational, is well used toproviding heavy-duty equipment forcompanies around the world. He tellsWIP: "Now more than ever, companiesneed to give very careful consideration tothe options for securing additional powersupplies.It is all too easy to follow the purchaseoption and we have seen many companieswho have ignored the hidden costs ofmaintenance and operation, only todiscover that their purchase has become aliability, costing significantly more thananticipated and crucially, not providingthe power they need.”The decision to be made betweenpurchasing a power system or employingpower rentals will depend largely uponthe urgency of finding a solution to thepower problem being faced and thelength of time the power solution will beneeded for.The current needs of companies tocontrol capital costs whilst not neglectingtheir company's business needs is creatingnew interest in power rentals as rentalsoffer financial benefits.An immediate benefit of power rentals isthat they avoid the need for large capitalexpenditure. In most cases, the financialAggreko recently won two contracts to hire215MW of temporary power from companies inOman and Panama. The combined worth of thehire contracts is US$75m.benefits of power rentalswill compare favourablyagainst the large fixedcosts of a power plantthat will tie up largeamounts of a company'sworking capital.There are many otheradvantageous featureswhich make theproposition of rentingpower suppliesincreasingly attractive,such as improved cashflow and the speed bywhich the much needed power can besupplied to the user.Other key factors: there are no downpayments for a loan for power plantpurchase required and power rentals havea guaranteed payments schedule over theagreed term, with options to extend therental period if required.Additionally, the power rentals optionprovides the end user with operationaland maintenance services from thespecialist power rentals company.The decision to rent power simply meansthat the company transfers the costuncertainties and the risks of powerequipment ownership onto the powerrental company.During an economic upturn,the lead-time for the purchaseof generation equipment canbe anywhere up to two years,meaning that companies whichneed power urgently will finda rental option veryattractive, due to the 'fasttrack'aspect of rentals.However, the currentfinancial turmoil isencouraging companies to60MW of power - units hired out by Aggreko.consider rental for different reasons, suchas how to better utilise working capitaland to ensure that it is not tied up inlarge capital purchases for items such aspower plants.When deciding between power plantpurchase or power rentals, a companyshould first evaluate the many hiddencosts that are incurred with purchasing apower plant.Insurance is one key item which is oftenoverlooked by companies seeking topurchase such equipment. Also, withpower plants there are a multitude ofspare parts and ancillary items that needto be purchased regularly to ensure thatthe power system is operable.Not only do spare parts need to bepurchased, but they also require storagespace and skilled engineers to install thespares.With power rentals all plant spares andancillary items are the responsibility ofthe rental provider, thus enabling thecustomer to budget more effectively.Internet linkwww.aggreko.comWIP20MARCH 2010 • WORLDWIDE I NDEPENDENT P OWER