Caspian Energy Journal Caspian European Club
Friday, 04 January 2019 18:30

Industrial and construction solutions with no capital expenditure - Aggreko Featured

Industrial and construction solutions with no capital expenditure - Aggreko

Caspian Energy (CE): It's been a year since Aggreko opened a mobile modular office in Baku. How successful has it been so far?

Ridvan Özer, General Manager for Georgia, Ukraine, Turkey and Azerbaijan: Yes, the office was opened exactly one year ago. However, Aggreko has had a presence in Azerbaijan for over five years. Our facilities in Baku comprise not only our modular-type office set up in our branded containers but also a production area and an equipment depot. Such a facility enables us to expand our presence in the Caucasus region. We specialise mainly in sectors such as oil and gas, mining, shipbuilding and construction, but we also undertake projects in telecommunications and the entertainment industry. Our company has contributed to the implementation of a number of key projects in Azerbaijan, including the launch of the Shah Deniz 2 Project and 2015 European Games in Baku and also Formula 1.

CE: What influenced Aggreko's decision to launch an office in Azerbaijan, and how do you evaluate your progress here?

Ridvan Özer: Azerbaijan is a vibrant country that is constantly changing and opening up to the world. Azerbaijan's strategic location has a major influence on its competitiveness. It lies at the crossroads between Europe, the Middle East and Asia. We regarded this as a crucial factor, also taking into consideration the Group setting up a new market unit: GUTA (Georgia, Ukraine, Turkey, Azerbaijan). The economy of Azerbaijan is well on the road to recovery after oil prices dropped in 2014, and it maintains positive momentum. Among the factors enhancing its economic stability is the Trans-Anatolian Natural Gas Pipeline (TANAP) which provides for Azerbaijan gas exports from the Shah Deniz 2 field to Europe. There are transportation projects, too: the Baku-Tbilisi-Kars Railway; the first construction stage of the Baku International Sea Trade Port; and the North-South Transport Corridor.

Our company takes part in almost all major projects related to the development of Azerbaijan's pipeline or transport infrastructure, including the development of dockyards and ports. What we offer the market are cost-effective solutions aimed at enhancing effectiveness, reducing overall energy costs and minimising maintenance costs, among other advantages. Our equipment has also proven reliable during emergencies such as blackouts.

CE:What are Aggreko's advantages over other companies on the market?

Ridvan Özer: I think the main advantage in our offers is the absence of capital expenditure and developing both temperature control and power  tailor made solutions for client’s pain points or to improve their process efficiency and to reduce total cost of energy. We design and produce diesel, gas and hybrid projects (gas/diesel + battery storage), load banks but instead of selling them we rent them out for different time periods: a day, a week, a month, a year or several years. While many companies offer generators and special-purpose machinery as an extra service, Aggreko regards renting as a business model. This means our equipment relocates to, and operates in, various climatic conditions, and its design focuses on mobility, modularity, and is simple to connect. Our equipment is not for sale, and, therefore, there is no need to secure funding for long-term investments through loans or withdrawal of funds from our turnover. Amounts paid for equipment or kilowatt-hours are deductible costs because they are operational, non-taxable expenses. In addition, we save money on general construction and infrastructure work, maintenance costs and hiring additional staff: energy workers and engineers.

Forward-thinking companies always seek to optimise their costs without loss of quality or reduced productivity. Aggreko's solutions enable us to channel resources towards business development rather than purchasing expensive generating equipment and incurring the accompanying costs.

CE:What cutting-edge technologies is Aggreko focusing on now? What technologies would be the most effective in Azerbaijan and in the Caucasus?

Ridvan Özer: We are interested in hybrid solutions and everything associated with them: for instance, industrial energy storage units. A year ago, Aggreko purchased Younicos, a German-American company specialising in managing hybrid solutions based on combined solar and hydrocarbon energy, microgrids and their optimisation by means of energy storage units. This year, we reached another deal, purchasing a 14 per cent share in Origami Energy, a technology platform provider. Increased RES in the overall energy balance is a short-term priority for many countries and, according to Azerbaijani Energy Minister Parviz Shakhbazov, Azerbaijan will be no exception. Azerbaijan is working on a legislative framework for developing RES, and negotiations are underway with BP and Equinor on partnering in this field.

This is why the local market will be, above all, interested in our solar-diesel hybrid package. Using it in tandem with industrial batteries makes it possible to reduce energy costs, adjust frequencies and cover energy peak times.

Secondly, our solutions in terms of cogeneration and trigeneration increase the thermal utilisation factor. Using such equipment is highly effective since its implementation reduces the overall cost of fuel. Aggreko intends to commission mini power plants for cogeneration based on pollution-free fuel or on partially renewable energy sources.

Thirdly, we provide temporary solutions for industrial cooling, including chillers, cooling towers and air conditioning units. Our equipment is used during peak hours, seasonally or when repairing the permanent cooling plant. Notably, in Azerbaijan's hot climate, our solutions improve the efficiency of gas turbines by cooling air at input: the temperature drop from 40°С to 15°С prevents the power decrease of turbines by 30 per cent! This enhances the life cycle of gas turbines and cuts maintenance costs.

I'll conclude with a word about loadbanks. They are used to check sources of electricity by imitating variable electrical load conditions.  We conduct such preliminary tests, among others, for wind farms in order to save contractors time and money.

We are confident that the Azerbaijani market will appreciate our solutions because they are truly cutting-edge technologies aimed at efficiency improvement and cost reduction.


Thank you for the interview

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