A Review of the Nigerian Energy Industry

Aggreko discusses embedded power with five DISCOs

AggrekoKunle Kalejaye 19 July 2014, Sweetcrude, Lagos – Aggreko, a Scottish business company that specialises in providing temporal power solution and temperature control across the globe, is currently in talks with five electricity Distribution Companies, DISCOs, in Nigeria to provide embedded power to them, SweetcrudeReports has learnt.

Embedded power generation is a situation where a generator is directly connected to the distribution network. It consists of smaller or modular generators that use a variety of generation technologies such as solar, wind, biomass, diesel, fuel oils, crude oil and small hydro. It is also a useful means of dedicating power to state and local government, eligible customers and others.
SweetcrudeReports could not immediately ascertain the five DISCOs involved, but guarded gathered that discussion were ongoing with the five power companies.
Aggreko’s Regional Managing Director, David Taylor-Smith told news men in Lagos that the company was desirous to discuss with the 11 DISCOs in the country about embedded power solution, noting that it is an exciting opportunity.
He explained that Aggreko has its manufacturing company in Scotland but already exists in 28 African countries, including Nigeria providing about 1.3 gigawatts of electricity across the continent.
He added:There are three markets in Africa where we set up permanent businesses to keep equipment in the country and our team of engineers and that is Nigeria, South Africa and Kenyan.
“We chose these countries because their economy are more bigger and also we think that there is demand for power and a demand on the kind of way we provide power.
“We think that the most exciting opportunities in the whole of Africa is Nigeria because there is a big demand for power and also because we provide power in the oil and gas industry.
“We have been working here for a number of years but we have been doing it on a project basis. The important thing now is that all of our team got equipment in-country.
“We have Nigerian engineers and any time they need more equipment it is quite easy because they keep those equipment mobile anywhere in the world.
“So if there is a need for more power and there is an emergency, we put the power on quickly. Like next door country, Benin we are about to put 15megawatts on and they ask for it two months ago and we are going to put it on next month,” Taylor Smith said.
‎Aside from embedded power solution, Taylor Smith noted that there are a lot of opportunities in Nigeria to also provide captive power.
“We think there are lots of opportunities to provide captive power and this happens when a company comes to us and tell us they have been using power from the national grid but they want reliable power,  then we put on power on site which could be 10 or 20 megawatts,‎” he added.
The Aggreko Regional Managing Director added that there were no quick fix to power problem in‎ Nigeria and that reforming the sector was the way forward.
Smith also explained that the successful power reform ‎must be backed up with the right regulatory frame work.
He noted that Africa, with special focus on Nigeria, is a potential market but the regulated tariffs are less than the cost of production.
“No business is going to go there if the tariff is less than the cost of production, so there has to be the right regulatory environment,” he said.
Aggreko’s Managing Director, Nigeria, Mr. Alaba Owoyemi disclosed that the company had executed some projects in Nigeria accompanied with success stories and challenges.
He added: “In 2005 we have about 20 megawatts in Abuja which was in partnership with Geometric Power, we have also done some jobs with oil companies like Shell and Mobil.
“At present we are supporting the manufacturing sector, most of the manufacturing companies are depending on us.
“In the area of challenges ‎that we are facing, it is not different from what other multinationals are facing. We are having some complex issues with our import processes.
‎”So what am saying is that we are having some issues which is out of our control, Nigeria importing system is so complex and the regulatory frame work is not really friendly. We are all aware that we are stilling reforming the power sector, we hope to be there very soon.
“Another area of challenge is stability because a lots of things are happening in the country and as an investor you can not really make up your mind because you are not sure of the future.
“In summary our challenges is not totally different from what other companies are going through but the opportunities far out weigh the challenges which is peculiar to all emerging market”.
The Regional Managing Director of Aggreko reiterated that with the company’s over 50 years experience in providing power and temperature control solution to customers who need them, either very quickly or for a short period of time, and its 200 locations based in over 49 countries, the company in due course would establish a servicing repair centre in Nigeria.


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