In the utility sector, hiring a temporary plant is the best solution during emergency, planned shutdown or during construction of permanent power plant.

There are three usual scenarios that could occur when a utility company hire temporary power plant:
1. Emergency
2. Planned shutdown
3. Bridging power gap or Stop-gap energy measures

During emergency situations, utility companies or energy authorities must have a back-up plan to restore electricity at the quickest possible time. Whether it is a man-made or natural calamity, the best solution is to proactively plan the worst case scenarios.

The best proactive plan to alleviate emergency situation is to sign an agreement with a rental power company, outlining the conditions, fleet size and response time whenever an emergency occurs. An example is a natural disaster where millions of people have been affected by tsunami or earthquake. The government authorities and the utility company can cushion the impact of electricity outage by signing a contract with temporary power company to react swiftly and deliver temporary power plants in cases of natural disasters. Japan, Haiti and Pakistan are some of the concrete examples of emergency cases that require immediate response to restore power.

In the case of planned power plant shutdown or “turnaround” due to major refurbishment, there are several questions that a utility provider must ask before renting a power plant. Will the power shutdown affect the supply in the long term? Will it hamper electricity supply to its customers and caused major power interruption to their businesses? Utility power companies should consider hiring temporary power plant when no other possible alternative source of power generation is available to supplement the electricity shortfall during repairs and maintenance. They can hire for example 100 MW rental power plants for 6 months to avoid power interruption and continuously supply electric power to critical areas such as airports, data centers or hospitals.

In the case of bridging power gap or “stop-gap” measure, hiring a temporary power plant to bridge the power gap, the utility company should ask these questions: Will the permanent electric power infrastructure be built in less than 3 months? Are there foreseeable delays in the construction of the permanent power plant? Is the power demand seasonal?

There are three critical areas in bridging power gap: first is the power generating plant, second is the transmission line and third is the distribution network. These three power infrastructure must be properly constructed, commissioned and completed before the end-user can receive electricity. The utility power companies can hire a temporary power plant if the electricity demand outpaced the power generation supply, or the electrical grid is unstable, or there are no power distribution networks. In most emerging markets such as Africa, South Asia and Middle East, there are several power projects being constructed to solve the chronic power shortage. However, the problem is to resolve the demands of existing customers who require electricity and could not afford to wait for another day. This is an immediate problem which government and utility company should solve. To quickly solve the lack of power infrastructure, utility power company and government authorities can rent interim power plant until the permanent power infrastructure is completed.

The Economic Impact

First, let us assess the cost-benefit of hiring a temporary power plant versus load shedding or complete shutdown. The process questions are: How much revenue will a large company (i.e. oil & gas) lose if electricity is cut versus renting a power plant? Will it affect mission critical areas like hospitals or healthcare services where lives are at stake? If power interruptions will affect major critical facilities like hospitals or basic infrastructure like telecommunications, data centers, airports and oil facilities, how much economic damage will power outage cost compared to renting an interim power plant?

A recent report by the Iraqi government shows that Iraq is losing $40 Billion USD per year due to chronic electricity shortage. Temporary power plant can ease the burden of the economic loses by bridging the power gap to critical facilities like oil & gas, petrochemicals, industrial manufacturing zones and commercial business districts. In Pakistan, study shows that chronic load shedding has an estimated economic impact of Rs1.5 trillion loses in 2011-2012, this is approximately 7% of the total size of the economy.

As the world economy become globalize, the economic impact of a load shedding in South Africa will have a detrimental effect around the world. Remember on the 21st of January 2008, Eskom reported that the electricity shortfall of South Africa reached up to 2,500 megawatts, and then the global market reacted as metal producers stocks fell 9.2% for Anglo, 6.3% for Kumba Iron Ore, 6.2% for Impala, and 4.9% for Harmony Gold. The non-production of mining due to power crisis in South Africa will have a significant negative impact to the world’s construction projects.

Therefore, if financial analysts will ask questions about the cost of renting a power plant versus the economic impact of a power shortage, then we can categorically say that the cost of power plant rentals is marginal compared to the economic devastation caused by the electricity shortage.

The Social Effects

The relation between electric power and social living conditions in any country are interrelated. From Western to Eastern countries, electricity is no longer a basic necessity for industrial and commercial sectors, but it is now a growing social requirement for individual consumers.

For the past five years, load shedding, power blackouts and electricity outages in several countries like Kenya, Tanzania, Yemen, Pakistan, India, Philippines and Bangladesh has grown into street protests. We are seeing more social unrests in many parts of the emerging markets due to chronic electricity shortage… and they are getting bigger by the numbers each year.

Even those consumers who are using mobile gadgets and electronic devices will be greatly affected. In Twitter, Facebook and other social media sites, we are seeing an outburst of frustrations over the lack of electricity supply and constant load shedding. If you try to search the word “#LoadShedding” on Twitter, you will read hundreds of posts from angry consumers and business leaders, ventilating their issues online.

Temporary Power Plants
Hiring temporary power plants can reduce or eliminate socio-economic risk of a country. By bridging the power gap, it can save millions if not, billions of USD dollars and prevent opportunity loses. Temporary power plants can save jobs, save lives and even save the macro-economic plans of a nation. Because electricity is a basic necessity for any nation, energy must be restored immediately to avoid further economic loses and social instability.

Jargons – What’s in the name?

Why there are so many variant jargons and description pertaining to hiring a temporary power plant?

What’s the difference between temporary power plant, rental power plant, energy rentals, interim power plants, genset hire, generator rentals and rent-a-power-plant?

The reason why there are so many terminologies is because of variances in the use language in a particular region. North America normally uses the word “hire”, Europe uses “interim” while in Asia often use the word “rent”. On the other hand, the use of words like “power” or “energy” or “generator” depends on the industrial sector. It is typical that the oil & gas will use the word “energy”, the manufacturing industry will use the word “generator”, while the utility industry will use the word “power.”

So don’t be confused if you came across the words: rental, temporary, interim, energy, power, genset or generator. These words are being interchanged depending on the region and sectors. Therefore the jargons and their etymologies have almost the same concept, which is to hire a power plant that will end electricity shortage.