Purchasing power

Aggreko supplied the Fifa World Cup with temporary power this spring.

Who rents?
Against this backdrop, it is small surprise that rental providers name utilities as their biggest sources of income in the region.

“The biggest proportion of our business in the Middle East is focused on working with utilities. Over the past year, we have provided multi-megawatt power projects to support local utilities in Oman, Saudi Arabia and Yemen,” says Burns.

Do rental companies experience a similar rush for their services from the private sector, with clients keen to safeguard against potential shortfalls, especially prior to the summer heat? No, says Cox.

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“Seventy percent of the companies leave it up to the last minute. After the 2009 economic crisis, companies tend to be more reactive and passive. If they can delay the hiring of the power, they will do so. There are cases where problem already exists and they will only increase their power requirement after the problem has been triggered.”

Cox believes that this cheapskating can come to haunt companies, as they face the prospect of production gaps and subsequent sales shortfalls.

Another money maker for generator rental companies is the events sector. Events only account for around five percent of RSS’s total segment share, says Bagatsing. Nevertheless, the company provided power to such high profile events such as Yas Island after-race-concerts, powering the performance of Beyonce, Aerosmith, Jamiroquai.

For Aggreko, events are increasingly important both in the region and globally. “The events sector has been an area of growth over the past 18 months.” This year alone Aggreko provided temporary power for the World Cup and the Vancouver Winter Olympics.

In the Middle East, the company has powered the Bahrain Grand Prix since its inception in 2004 and the Dubai Rugby 7s for over a decade.

Generating trends
Clients might at times be a little tardy when it comes to renting power, but they do seem to know what they want. Providers have seen a number of trends developing both in a regional and a global context.

“Regionally we are pleased to see the shift away from open-type generators and towards silenced units in the construction sector. In the West, this has been mandated for decades, and it does offer the users and the surrounding environment benefits,” says Sagermann.

“Worldwide we see more electronics integrated within the products, and greater attention given towards environmental aspects like exhaust emissions and spill containment. This has been long a cornerstone feature of our products, since ours are built with European norms conformity as a key driver.”

This is not the only example where generator manufactures and rental companies may need to adapt to keep abreast with the changing demands of their clients.

“One of the trends we are currently seeing is that customers are looking to diversify their energy portfolios,” says Burns. "Rather than relying on one type of fuel, they are looking to expand their generation capacity to include two or more fuel types.

For example, one of our customers, a cement company in Ras Al Khaimah, had their own gas-powered turbine but they contracted a diesel-powered package from Aggreko to provide additional capacity to their facility.”

In response to this demand, Aggreko in 2005 diversified their product range to offer generators that run on natural gas, and
is now working with customers to determine how they can utilise gas resources in their respective regions.

In addition, most of Aggreko’s generators can be run with biofuels, as the company proudly point out. Rental providers, it seems, will be finding, and providing, opportunity in the Middle East for some time to come.