Aggreko aims to tame wind power

Published on Saturday 6 March 2010 13:13

AGGREKO, the Glasgow-based temporary power provider, wants to carve a new niche for its container-sized generators in the wind-power industry.

The FTSE 100 group provides electricity for major sporting and cultural events, but has been winning contracts where hydro power has run dry in the developing world.

Now it believes the same skills and technology can be used in developed countries where a growing wind-power industry will lead to wide variations in supply.

In its biennial strategy review, Aggreko said that as the contribution of energy from wind farms grows, countries would need a mix of generation sources able to cater for variations, which gas and nuclear stations are not properly equipped to manage.

"Our technology is ideally suited to intermittent, fast-start operation. We can bring enough power online to keep the lights on for whole cities within 30 seconds," a company spokesman said.

"We think system operators will come to find this sort of sustainable, distributed, fast response capability essential if they are to operate with meaningful amounts of wind generation."

Chief executive Rupert Soames said the opportunity it believes will be created by wind power may not materialise within the next decade, but the board was "opening our kimonos to shareholders about what we're thinking".

Soames said Aggreko was already experienced in helping customers deal with the vagaries of renewable energy.

"In a lot of projects in Africa and South America we are helping customers to manage the intermittency of renewables. It is just in those countries it is in hydro, rather than wind. Large amounts of wind power coming into the network will, we think, produce a need for a different form of power generation that is able to step in and step out to help manage the volatility of wind," Soames said. "And we think that we've got a pretty good solution for that, and this might be an opportunity."

Soames stressed that the potential was large. "We're not talking any numbers, but the amount of power that's in the developed world is more than in the less developed world – it could be quite a large sandpit for us to play in."

Aggreko is also keen to prove to the City that, after growing its profits by an average of 35 per cent a year since 2003, it still has potential to expand.

Soames said: "People will inevitably begin to ask, 'Are you going to run out of road? You're a little cotton-picking power business. You do power, you do temperature control, nobody had ever heard of us six years ago.' We're saying, 'We think we've got plenty of road ahead of us here'."

Last week Aggreko posted record pre-tax profits of 246.5 million, and raised its total dividend by 25 per cent.