Diesel Genset Exports to Africa 2010

John Ridout

Comparing the first six months ofthis year with a similar set of resultsfor the first six months of 2009

might lead one to think stagnation had setin as both values are almost identical.

Last year’s six months results appearedto suggest a slowdown in exports of dieselgenerating sets to Africa. However, thereverse happened – the second six monthsof 2009 to December showed a largeincrease, boosting the predicted forecastup from US $852.2mn to US$1,271.1mn.This was only US$202mn down from therecord breaking 2008 exports.

So Africa appears to be bucking thetrend, which is good news for gensetsuppliers, but a sad reflection on theinability of the power generating sector tokeep pace with the ever-growing demandfor electricity. As Fig 1 shows, exports toAfrica totalled nearly US$500mn for thefirst six months of this year but theforecast for the whole year is bullish andshowing an increase over the 2009 figures.

This is partially based upon the value ofexports shipped over the last 12 months,from June 2009 to June 2010, which showsan encouraging increase. The second halfof 2009 was much busier and exports wereup 75 per cent on the previous six months.It is anticipated this may recur again thisyear, although perhaps not quite sodramatically. A restocking took placeduring the second half as distributorsreplaced their greatly reduced inventories.

This anticipation has been extendedinto Fig 2 showing the value of imports bythe top countries in Africa. A simple

doubling of the first six months results hasnot been used on this occasion and anattempt to predict the full year’s resultsare based on their import record over thelast 12 months from June 2009 to June2010.

Also the actual six months exportfigures do not take production from othercountries such as India, Turkey, Lebanonand Singapore into consideration. Thesecountries contributed US$100mn intoAfrica last year and are quite likely torepeat that, perhaps even exceed thesefigures.

The top four importing countries,Nigeria, Angola, Algeria and Egypt are nowjoined by Libya. Four years ago Libyaimported a modest US$7.8mn (even thatwas a big increase compared to previousyears) but that has now increased to tentimes that volume and is quite likely toshow an even greater increase this year.

A relative newcomer to the top ten nowincludes this year the Ivory Coast, withtheir six months figures beating theiryearly results. Their imports are spread

across all categories of kVA sizes up to2,000kVA with mainly suppliers fromEurope, although China is knocking on thedoor with US$3mn in the first six monthsof this year.

Tunisia is showing activity of a positivenature and, from a very low rating fouryears ago, is now importing generatingsets, mainly standby operational functionsfor hotels and administration offices, tothe tune of US$13 to US$15mn a year.European manufacturers are the mainsuppliers with the US and China a longway down the list.

The US appears to have a relatively smallshare of the African market if their directexports from the US are compared. Thisshows a very modest six per cent share.However, if US-owned companies areconsidered the picture changesdramatically as a very large proportion ofdiesel generating sets being exported toAfrica from Europe, and particularly theUK, are US owned.

As a rough approximation, this couldaccount for around 75 per cent of the UK’s

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Diesel generatingset exports to AfricaA review of the market developments and product initiatives set in placeover six months in 2010

African Review of Business and Technology - October 2010

Exports of Diesel Generating Sets To Africa Six Months to June 2010 (Value US$mn)Range: 1 to 2,000 kVA YEAR US UK EU*2 JAPAN CHINA OTHERS*1 TOTAL

Actual6 months 2010 16.8 107.1 230.1 7.5 85.8 50.0 497.3

Projected12 months 2010 30.0 330.0 630.0 13.5 190.0 100 1293.5

12 months 2009 76.8 341.5 539.8 15.1 197.9 100 1271.1

12 months 2008 80.2 420.1 531.4 28.2 322.7 91 1473.6

12 months 2007 53.5 403.5 495.4 17.6 126.5 64.9 1161.4

*1 OTHERS includes exports from India, Lebanon, Singapore and Turkey

*2 Excluding UK

Source: HM Customs & Excise Statistics

S06 ATR Oct 10 Report F_J_K_O_Layout 1 23/09/2010 12:22 Page 44

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46

output and at least 10 per cent of the EUexports. In terms of value, the US directexports lean heavily towards very largegenerating sets on the 1,000 to 3,000kVArange. Some 76 per cent of their exports toAfrica for the first six months of 2010account for these sizes, shipping mainly toAngola and Egypt.

South Africa’s imports are well down thelist now. This time last year, they were thirdin the top league but are now lying 11th,in the second division. The FIFA worldfootball tournament, held in South Africa,and severe power shortages boosted theirimports up to US$266mn in 2008 but fromtheir current six months results areunlikely to exceed US$30mn this year.Until the surplus second-hand generatingsets currently flooding the market becomeabsorbed, they are likely to revert to theirown in-house manufacturing capacityrather than import new kit.

Exports to the top five countries stillremain in a reasonable steady state andaccount for over 50 per cent of all Africa’s


Top Importing Countries in Africa, Diesel Generating Sets Range: 1 to over 2,000 kVA (US$ million)COUNTRY 2010 2010 2009 2008 2007 Actual Projected 6 months 12 months

Nigeria 103.1 200.0 175.5 286.9 306.4Angola 43.4 140.0 146.4 164.3 105.9Egypt 35.7 80.0 79.7 97.6 57.1Algeria 29.1 110.0 111.3 110.5 51.6Libya 25.0 70.0 59.6 21.9 16.3Ivory Coast 18.6 30.0 12.2 11.6 15.4Sudan 15.5 45.0 47.7 96.3 60.3Ethiopia 11.9 40.0 44.2 32.7 8.8Kenya 11.7 40.0 46.0 38.8 21.5Congo Rep 11.5 30.0 29.4 32.6 41.6South Africa 11.9 30.0 100.7 265.9 66.4Ghana 9.6 32.0 40.5 25.3 72.3Gabon 8.2 16.4 11.3 17.9 16.0Congo Dem Rep 7.5 16.0 17.5 32.6 nrTunisia 7.1 15.0 13.6 13.0 nrSenegal 6.9 14.0 33.3 27.8 17.0Cameroon 5.9 13.0 16.2 8.4 11.2Tanzania 5.5 12.0 11.6 14.8 18.7Chad 3.8 8.0 13.7 nr nrMadagascar 1.4 10.0 13.3 36.9 26.1Uganda 1.4 7.0 8.5 8.8 25.9

TOTALS 1115.5 1394.7 984.4

Figures based on six months 2010 results

Comprises data from 29 countries

Source: HM Customs & Excise Statistics


PowerFEATURE

48

imports. The remaining 50 countriesabsorb the rest and many fail to rise abovetwo digit imports.

World Exports, as per Fig 3, shows apossible increase for 2010 of around 6 to10 per cent based upon the comparisonbetween the first six months of 2009 and2010, plus the volume of exports shippedduring the last 12 months up to June thisyear. All show positive increases.

The US is maintaining volume by

concentrating sales into Latin Americanand Asian countries. The EU countries, withthe exception of the UK, appear to becharging ahead and are predicted tomatch the record 2007/8 export figures.The UK drastically lost ground in 2009,dropping US$562mn from 2008 exportfigures and seeing only a modest increasefor this year. Japan is steady but Chinaseems ready to explode in spite of therelative low 12 month forecast. Exchange

rate changes and the relentless growth ofChinese equipment manufacturers are thedominant forces that are reshaping theworld’s export markets in generating sets,construction equipment and consumergoods.

Quality remains a persistent worry inthis headlong economic manufacturingboom for China and has not beenenhanced after serious welding faults haveallegedly been found in the new 140 windturbine towers due to be installed on theGreater Gabbard sandbank, located off theUK’s Suffolk coast.

Some 180,000t of steel, in the form of

Exchange ratefluctuations and

growing Chinesemanufacturing are the

dominant forcesreshaping the world’s

genset export markets”


World Exports of Diesel Generating Sets, Six months to June 2010, Range: 1 to over 2,000 kVA(Value US$ million) YEAR US UK EU*2 JAPAN CHINA OTHERS*1 TOTAL

Actual6 months 2010 513 586 1027 263 557 50 2996

Projected12 months 2010 906 1385 2586 573 1003 100 6553

12 months 2009 949 1235 2388 617 881 100 6170

12 months 2008 2107 1797 2517 774 1304 120 8619

12 months 2007 1337 1777 2548 564 791 70 7087

*1 Estimates of exports, six months 2010 from India, Singapore, Lebanon and Turkey

*2 Excluding UK

Source: HM Customs & Excise Official Statistics

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wind tower parts, have been assembled byChinese steelworkers and ferried 4,500miles to Europe.

Industry very buoyant

Although China is in the forefront of windpower technology, fuel, in the oldest formof power, is now being provided by250,000 Chinese cows.

Four Jenbacher gas engines have beeninstalled and will power the new LianongHuishan cow farm producing four 1,000kWor 38,000MWh a year in what is claimed tobe the world’s largest biogas project-based on cow manure. It is called gettingyour own back!

Jenbacher, now part of G.E., have beenproducing gas powered engines for manyyears in Austria and hold a veryrespectable reputation for their quality ofproduct. A pilot installation of this naturehad already been installed in the Ukrainewith a plant converting cow manure into

energy (or biogas) from 4,000 cowsproducing 625kW of electricity and 686kWof thermal output. This has been inoperation for 12 months now and reduces18,000 metric tons of carbon dioxide.

Gabon, whose imports of dieselgenerating sets are predicted to reachUS$16mn this year have recently placed anorder with MAN Diesel and Turbo for twodual fuel large bore diesel/gas enginepowered generating sets that will produce35MW of power for the area of Libreville as

part of their national grid supply. Nigeriahas suffered power outages, brown outsand power rationing for many years as aresult of over demand and insufficientpower generation capacity.

It has now been stated that Nigerianofficials have begun preparing a plan tosell off the crippled state electricity systemin a privatisation sale. Nigerians currentlyspend an estimated US$8bn a yearrunning costly diesel generating sets thathave now become the main source ofpower.

Although the Nigerian Government haspoured US$1bn a year into the powersector in recent years, restoring powerlines felled by neglect or theft and the lackof any large expansion in powergeneration still means that the countryonly provides enough electricity to run arefrigerator for one in every 30 peopleamong the 150mn population and evencharging a mobile phone is a daily ordeal.

PowerFEATURE

50 African Review of Business and Technology - October 2010

Nigeria spendsUS$8bn a year

running thediesel generating sets

that have now becomethe main source

of power”

Containerised 1,000 and 2,000kVA gen sets on a production line


The plan would break up the PowerHolding Company of Nigeria (PHCN) –known to the Nigerians as ‘Please HaveCandles Nearby’.

In August this year, Nigeria announcedplans to build a 700kV, US$3.5bnelectricity grid to improve power supplies.The new grid is expected to be completedin four years and will overhaul the existing330/132kV electricity grid. Nigeria’savailable power generation capacity willrise to 6,939MW by April next year and14,019MW by December 2013 – accordingto a presidential committee on power. Atpresent Nigeria’s generating capacitystands at less than 5,000MW.

A joint venture by five African nations todevelop a multi-billion dollar hydropowerproject of 2,000MW in the DemocraticRepublic of Congo has collapsed – whichwill affect users in Southern Africa. Thecost of electrical power would have beenup to 260 per cent cheaper than currentcosts but the Congo decided to pull out ofthe deal because it wanted to retain more

of the electricity produced for its own use.Wartsila recently won a contract to

supply and install a large gas poweredgenerating power station in the republicof Cameroon. Using their 18V500Feighteen cylinder vee-formation dual fuel

(diesel or gas) engines, the station isexpected to produce around 300MW andwill require 60 skilled workers to operate.This contract follows an 86MW D1 bambapower plant at Yassa which uses eight vee18 cylinder engines each producing over

PowerFEATURE

52 African Review of Business and Technology - October 2010

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A 2,000kVA genset in soundproof housing for a data centre


10MW. Some 450MW of power in theCameroon by Wartsila will be completed by2011.

A recent survey by an American magazineindicates that within the range of 500kW to3,500kW diesel generating sets some 1,442generating sets were installed in Central,West, East and Southern Africa during theperiod January – December 2009, but only54 in North Africa. From 3.5MW to 12MW,the number decreased significantlyaccounting for just 35 machines. The surveycovers the production and exportshipments from 15 of the largest dieselengine generating set manufacturers in theworld.

In general, the type of generating setmade shows a 50/50 split between standbyapplications as against continuousoperation and peak lopping.

Aggreko continues to hit the newsannouncing record profits and reacting tobid speculation as shares reached overUS$24 a share with over excited prospectorspiling in, awaiting a take over. Certainly

Aggreko did well in South Africa during theWorld Cup, which generated revenues ofover US$45mn for the company, whichpushed up first half revenues by 17 per centto US$933mn and profits before tax up 19per cent to US$200mn.

Philip Rogerson, Chairman, said, “Webelieve that we will make further goodprogress in the second half and that theoutcome for the year as a whole will beslightly better than our previousexpectations.”

The company invested a furtherUS$215mn in their new fleet in the first

half of 2010 but expenditure for the fullyear will be around US$425mn. Aggreko isbeing targeted, it is rumoured, by ABB, theSwiss Company for Power Generation orGE the American conglomerate.

Caterpillar are bouncing back with apositive and healthy outlook for the yearand a rebound from last year’s first quarterloss. The company generated US$233mn innet income in the first quarter of 2010compared with a US$112mn loss last year.In the same period, they also acquiredElectro-Motive Diesel (EMD) who have thelargest installed base of diesel-electriclocomotives in the world.

According to Caterpillar’s Vice Chairmanand CEO, Doug Oberhelman, “Theacquisition of EMD is a natural fit as itsupports our enterprise strategy toaggressively grow our Energy PowerSystems business.”

The deal was concluded for US$820mnin cash plus a networking capitaladjustment worth another US$108mn.

The company also launched a new

FEATUREPower

53African Review of Business and Technology - October 2010

Nigeria plansto build a

700kV electricity gridto improve power

supplies, withcompletion expected

in four years”


PowerFEATURE

54

generating set using its G3516B gasengine producing 1,250kW, 480/277 V, 60Hz.

Produced as a mobile unit, in a 12.2mISO sound attenuated container, thecomplete unit is designed for rentaloperation, via Caterpillar dealers and istotally self contained. The low emissionnatural gas engine has an integratedexhaust after treatment system to complywith the latest US regulations.

Hertz is not a name normally associatedwith diesel or gas engine generation butthey have recently purchased an Italiancompany called Rent One for anundisclosed price.

Rent One specialises in generating setsfor customers such as Vodafone and Wind,the Italian Football Championships andFerrari team events. With revenue last yearof US$3.9mn, the company will becomepart of HERC – Hertz Equipment RentalCorporation.

Gerry Plescia, President of HERC, said, “Rent One Italy has a solid reputation in the

telecom and events industry and Hertz’sacquisition is a great fit with our EnergyServices Division.”

Being environmentally friendly is a sure-fire buzzword for promoting your productsin today’s markets. As an example, a rentalcompany in the UK, with a dieselgenerating set fleet of 800 generating setshas decided to make all its hires ‘carbonneutral’ by only using carbon offset dieselfuel. The company, Mather & StuartGenerators Ltd, has struck a deal withCrown Oil UK, who have bought “highquality carbon offsets”.

Apparently using these offsets meancarbon released by the burning of thediesel is effectively cancelled out.

Director, Mark Stuart, commented, “Webelieve that this is a big win for theenvironment and one distinguishes usfrom other hire companies.” The companyalso sells Caterpillar generators.

Cummins Power Generation sales fellsharply last year and although business inChina, Australia and the Far East is brisk,

overall business is still very flat comparedto 2008.

To capitalise on China’s boomingeconomy, Cummins Power Generation(CPG) has recently opened a plant inCentral China that will manufacture dieselgenerating sets from 11 to 2,000kW, G-drives and automatic transfer switches(ATS) for emerging back-up andcontinuous electrical power.

An investment of US$19mn in the20,000sqm factory is expected to produce7300 diesel generating sets annually,20,000 G-drives and 15,000 ATS units. It isexpected to source engines locally andother key components.

An alliance ofcompanies and

Governments is set toconvert waste carbon

dioxide into diesel fuelby using solar power”



PowerFEATURE

56

Demand for Cummins products in Chinahas been so high that this is the thirdCummins operation in the country.

Meanwhile, back in the US, Cummins isexpanding its high horsepower engineproduction line at its manufacturingfacility in Seymour Indiana, USA.

Although the company is shy aboutoutputs at the moment, the US$100mninvestment is obviously meant to extend itsrange into, and perhaps beyond, the 3MWmarket. The Seymour plant alreadymanufacturers its V903, K19, QSK19 andQST30 diesel and natural gas engines.

Tom Lineberger, President and COE, isquoted as saying, “Our high-horsepowerbusiness continues to grow in importance.”

Cummins Power Generation recentlytook over the well-known US-based rentalcompany of Terex Corporation. This addsto the company’s rental business in theStates and CPG will assume aftermarketsupport (parts, service and warranty) forboth companies’ product lines.

As part of its research programme,Cummins are one of a team of sixcompanies developing fuel cells. Longrunning tests have already beensatisfactorily completed with a 3kW fuel cellwhich is using a solid oxide fuel cell-basedmobile power product.

They are expected to becomecommercially available within two to threeyears and units up to 100kW within the

next 7-10 years. Units are expected to bemanufactured at costs approachingconventional power generation technology.The units are expected to be ideal for RVcampers as features such as virtuallysilenced power, low fuel consumption andvery low emissions (as no exhausttreatment is required) are all beneficialaspects.

Slightly up market from these units is the1,400kW fuel cell, manufactured by FuelCellEnergy Inc for use on a poultry ranch inFrench Camp, California, USA.

Using renewable biogas for fuel, derivedfrom a solid waste lagoon, the systemharnesses ammonia, methane and othergases from this source via an anaerobicdigester to create methane gas as a by-product to feed the fuel cell to makeelectricity.

British company, Chloride, who arespecialists in UPS (uninterruptible powersupplies) that are linked to standby dieselgenerator installations, have finallysuccumbed to the takeover battle and arenow part of Emerson – also in the same lineof business but US owned.

They do, however, employ 3,000 staff inBritain, whereas Chloride only have 350with the majority of its manufacturinglocated overseas. The deal, worth anestimated US$1.2bn, will increaseEmerson’s world market share from 12 percent to 18 per cent.

Finally, 2,700 new electrical powergeneration projects worldwide in 122countries are expected to produce a further1,243,320MW to new capacity, if all theseplanned projects finally reach completion.At present the annual new power capacitycompleted is 143,000MW.

An alliance of companies andGovernment organisations have beenformed to convert waste CO2 (carbondioxide) into diesel fuel by using solarpower.

This powerful consortium of companiesare already planning commercial plants,and deployment of their plants can begin in2013.

As the US consumes close to 60bngallons of diesel fuel every year and totalCO2 emission have increased 17 per centfrom 1990 levels and continued to growone per cent a year, the commercial andenvironmental gains using such a systemcan only be viewed as beneficial – to allmankind. ■

It is estimated thatGabonese imports ofdiesel generating sets

will amount tobusiness worth someUS$16mn this year”


Cummins Power Generation haslaunched a new line of low-range

generator sets, powered by X 1.3 and X 2.5engines, designed to maximiseperformance and minimise environmentalimpact. The X 1.3 powered sets are available in 8 -11kVA configurations at 50Hz, and the X2.5 powered sets in 17 – 28kVA at 50Hz (12

– 20kVA at 60Hz). Engineered to delivermaximum power whilst occupying a smallspace, the innovative range meets themost stringent EU legislation and providesa reliable power solution for a wide varietyof prime and standby applications for keymarket segments, including retail,defence, telecoms, oil, construction,healthcare, banking and insurance. Steve Juden, Executive Product Manager,said, “Our advanced products haveestablished the benchmark in cost-effective, efficient power generation andthis range of smaller generators is set todo the same. We believe this new line with its unique

featuresand benefits will

take leadership in the global generatormarket.”

www.cumminspower.com

New range packs a powerful punch


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Diesel Genset Exports to Africa 2010