Demand for temporary energy supplies comes from emerging markets, which have inadequate power grids and therefore need an additional power source. However, the recent increase in demand has also been driven by the natural disasters that have taken place in Japan and New Zealand.
Companies like APR Energy hire out power generation equipment to markets that need it. They deliver power to remote locations and provide onsite power for industry as well as generating emergency supplies following natural disasters. They also offer a host of other energy related services such as improving the efficiency of power grids.
APR Energy is expanding rapidly and is the second biggest temporary energy supply company in the world, with Aggreko being the number one. The relisting of APR will facilitate further growth and it is estimated that it could increase its capital by as much as £1 billion. Horizon Acquisitions bought a majority shareholding in the company in June this year, and APR’s revenue for August increased by 93% compared to the same period last year, reaching £23 million (about 26 million Euros). The CEO of APR Energy, John Campion, explained the reasons behind the relisting:
“Little happens in the world today without electricity, and indeed reliable electricity. In many regions across the globe, particularly in emerging markets, there is a significant and widening deficit of power that is holding back economic growth and living standards. APR’s temporary power solutions provide a critical solution to these shortages. Our rapidly deployed, flexible, cost effective solutions bring needed power to communities around the world. By reversing into Horizon, APR Energy becomes a publicly listed company, we accelerate our ability to grow with an immediate injection of new capital and long term access to capital markets that truly understand our business and we reinforce our commitment to our customers across the world.”
Recently APR won a contract to supply power to Japan following the March earthquake, which caused disruption to the country’s energy supplies. APR Energy now has in excess of 700 megawatts of energy available for use, compared to last year’s average of 286 megawatts.
Aggreko also won a contract with the Tokyo Electric Power Company for the rental of 200 megawatts of power for a minimum of one year. This follows damage to the Fukushima Nuclear Plant in March as a result of the earthquake. The Chief Executive of Aggreko, Rupert Soames, commented:
“Within a few days of the disaster, Aggreko entered into discussions with TEPCO to bring additional power to the grid. TEPCO has moved extremely fast and with great professionalism to define an engineering solution which will bring additional generating capacity to Japan. Aggreko is pleased it is able to be of assistance to the country at this very difficult time.”
There is no doubt that APR and Aggreko are operating in a booming market due to rapid economic expansion in developing countries where it takes years to put permanent energy plants in place. By comparison, temporary energy suppliers can meet energy demand within weeks and it costs substantially less to set up the supply.