Innovation Strategy | Aggreko

Strategy

Making Temporary Power Cost Competitive with Permanent Power

Aggreko’s 2009 Interim Strategy Review determined that the best way to expand our Power Projects market was to make temporary power cost-competitive with permanent power. We felt the key to lower cost per MWh lay in fuel type and improved efficiency, and we’ve successfully delivered competitive results in both areas.

The costs per MW are made up of:

  • Capital cost
  • Fuel cost: type and consumption
  • Operating costs


We estimate that our combined fleet typically has a 20 – 40% lower capital cost / MW than our competitors.


In 2006 we launched our gas-powered generator, which has been very successful. This product delivered over $250m of revenue in 2012 and is expected to be approximately 40% of our Power Project revenue in 2013.


However although Gas is by far the cheapest fuel type it is not widely available. Heavy Fuel Oil (HFO) is widely available and lower cost than diesel (see table below) but in 2009 there was no suitable technology available that met our criteria for a rental product: mobility, flexibility, low capital cost / MW.

 Illustrative: Cost of generation diesel = 100 Fuel as % of cost / kwh Short term fuel availability
 Diesel  100  88%  Everywhere
 HFO  68  77%  Many places
 Gas  39  53%  Very hard to find

So we launched a 3 year, £6m development programme with Ricardo plc, and with the support of Cummins. The result is the Aggreko G3+ HFO with a cost / MW less than half that of new products from leading manufacturers.

 
Thanks to our investment in new ideas and products, Aggreko is currently the only operator who:

  • Can offer customers choice of diesel, HFO and gas, with low emissions or fuel optimised
  • Has developed gas into a volume rental product
  • Has developed proprietary technology to optimise performance
  • Has a large pool of engines that can be rebuilt to produce new product at very low cost.

Our capital cost per MW in all fuel types is significantly lower than our competitors’, but we believe we can reduce this further, as we refurbish and innovate our fleet in the future.

Our capital cost per MW in all fuel types is significantly lower than our competitors’, but we believe we can reduce this further, as we refurbish and innovate our fleet in the future.

Innovating for Sustainability

Burning less fuel will always be preferable to burning any amount of fuel even if it is ‘clean’. At Aggreko we strive to create innovative solutions that improve product efficiency, reduce pollution, and meet customer needs.

Pollution is an inevitable by-product of an internal combustion engine, but this hasn’t stopped us from developing complex systems that can dramatically lessen its impact.

Our products combine the latest innovations from scrubber, filter and catalytic converter technologies, and this is one reason why we’ve been able to reduce emission levels of particulates like NOx* and SOx*.

We also engineer and design our own products to minimise the danger of spillage and we have one of the highest levels of compliance in this area for our industry. Indeed many of our designs are held up as best practice.

Aggreko is also the world leader in the field of gas-powered temporary electricity generation. We have invested heavily in this area, as our customers are increasingly turning to gas as a cleaner, more efficient fuel alternative.

Our skill at providing commercially viable, high output air-quality solutions has produced exclusive and long lasting partnerships with customers.

*Oxides of nitrogen and sulphur

temporary-power-military

To speak to one of our team in South Africa, please call

+27 11 357 8900

Send rental enquiry