Aggreko – Flexible Power Solutions
As the energy transition approaches, it is hard to say what the energy sector will look like even five years from now, and so Aggreko’s approach must adapt to a changing market.
Aggreko is a truly global company with a presence on every continent, in over 80 countries. The company provides its customers with temporary power solutions in the areas of power generation and temperature control, suited to each of its markets.
“In the more developed markets, such as the US and EU we tend to offer rental services for our equipment. In developing countries we offer power solutions,” says Pablo Varela, Managing Director for Aggreko’s Latin American operations. “We sell energy to our customers through Independent Power Producers and similar mechanisms.”
Aggreko owns its own assets and has the capability to move those assets around the world to where it can provide the best service to customers.
“We do a lot of thermal power generation with diesel and gas such as methane and landfill gas,” Varela points out. “We are now introducing more hybrid solutions such as batteries, solar, and wind, to provide cleaner and cheaper energy to our customers. We offer a range of hybrid solutions to the mining, oil, and gas sector.”
Landfill of Opportunity
One project that is a perfect exemplar of Aggreko’s ingenuity and adaptability is a seven-year contract it recently signed with Brazilian energy company EVA Energia for a 10 MW renewable power solution using landfill gas.
Aggreko will deliver a complete system that produces power from biogas derived from two locations, Seropédica in Rio de Janeiro State, the largest landfill site in Latin America, and Mauá in São Paulo State.
It is a project that will generate power for approximately 40,000 households while producing carbon emissions savings of over 100,000 tons.
“When they close the landfill, we capture biogas and channel that into pipes to generate power which we sell into the grid,” Varela explains.
The key to this project, as with other Aggreko solutions, is flexibility, and a long-term perspective.
“Our unique selling point is our flexibility. The flexibility in our technology and our commercial activity,” Varela says. “We are open to adapting our contract types to whatever technology best fits the needs of the client. We can rent equipment, we can sell energy, we can partner on a specific operation and share the risks.”
To illustrate, Varela suggests a hypothetical ten-year contract with a customer.
“Now, things are moving so quickly nobody knows which technology is going to be the best to use in ten years,” he points out. “We might begin work on the operations of a mine in Chile with a hybrid diesel and solar panel approach, but during the life of the mine, we could change diesel to gas and add batteries. We will continue to update the technology. It means you do not commit to technology for the life of mine because you do not know what technology people will be using in five years.”
Matching the Technology to the Customer
Aggreko can rapidly meet customer needs because it has its own technological assets, meaning it can use that extra time to develop solutions that are better suited to each customer.
“We partner them with the right technology to give our customers what they want,” Varela tells us. “We’re not tied to a specific technology.”
Of course, keeping up with the technology is a challenge.
As Varela says, “We have to keep up to speed with the best technology, train our teams to understand this technology and train them to operate and maintain that technology,”
In keeping up with that technology, Aggreko has the advantage of being a global company.
“We generally have regional competitors, while we interact between regions,” Varela points out. “When there is an innovative technology in the US, we begin to use it there and then bring it to Latin America. This cross-pollination across different regions helps us be on the edge of technology.”
Aggreko’s international technological reach means it can act as a consultant for its customers, understanding not only their needs but what technology will suit them.
“We’re technology agnostic,” Varela insists. “We split our sales and engineering force by sector to understand the trends in each area, and we invest a lot of money and time in understanding those needs, only applying the technology that will meet them.”
Maintaining a Global Footprint
While its global footprint does give Aggreko an edge in terms of technology, that footprint itself brings its own challenges with it. There are differences across every country and region. The company can face issues with governments or regulations, with local prices, and it works in complex environments.
The key, Varela says, is that Aggreko must be simultaneously a local and global company.
“We invest time to gain local and nationwide knowledge,” Varela insists.
Varela himself is a good example of that. With 20 years of experience at Aggreko, Varela is from Latin America and has lived in that culture his whole life.
“We have a British person to run Britain, a Brazilian person to run Brazil, so we understand the local picture. That is important,” Varela says. “We do not send ex-pats to tell the locals how to work. We have been in place for a long time.”
Aggreko is employing and training local people so they can send their kids to school and college. Varela tells us it is that local impact which makes all the difference.
“In most of these countries, mainly Latin America but Africa and Asia are similar, we develop relationships not only with the governments but also regulators and other corporations to understand how to work and play in each different country,” he says. “The flexibility we have is a big part of that, allowing us to adapt to each country.”
This means local contracts, local currency where possible, and adapting to specific cultures and environments.
“A one size fits all approach would not let us do this,” Varela argues.
That flexibility will be more important than ever as the energy transition approaches.
“Everyone talks about the energy transition without knowing exactly what it is. In the context of the power sector, the energy transition for me is being able to give the cleanest energy we can, the cheapest way, with the most reliable supply,” says Varela. “It is a table with three feet and all three are important for our customers. The environmental impact, the cost, and the availability are the three things we need to achieve, and we are well-positioned to provide all three.”