HomeIndustry SectorsAsset MaintenanceInnovative finance model makes gensets pay for themselves

Innovative finance model makes gensets pay for themselves

South Africa is besieged by loadshedding, along with high peak tariffs and demand charges projected to increase significantly in the coming years; one solution is on-site gas-to-power standby generators, which offer peak-shaving at competitive kWh rates financed with no upfront payment.

The article first appeared in ESI Africa Issue 4-2020.
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While most companies are mindful of their carbon footprints, the immediate need for protection against power outages has forced them to adopt the use of standby generators, usually diesel. These diesel generators come with a range of upfront costs, depending on the chosen quality.

What they have in common is the extremely high running and maintenance costs that promise only to increase over the life of the machine. Diesel gensets are inherently a grudge purchase that, due to their running costs, are run as little as possible and only show a pay-back when measured against lost productivity.

SustainPower has officially launched its range of PRAMAC rich-burn industrial standby gas generators, made in the US by world-leading generator manufacturer Generac. These rich-burn machines combine the low running costs of a gas genset with the technical load-acceptance capability that is required for standby and prime applications. “What this means”, says Ames Martin, Director and COO at SustainPower, “is that there is now an emergency standby solution that can double as a peak shaver. You have a standby genset that actually saves money for the customer above and beyond protection against power outages.”

Genset power purchase agreement

As companies try to pick up the pieces in the wake of our recent economic freeze, free cash has become scarce, further exacerbating the problem of securing protection against power outages. To address this challenge, SustainPower has partnered with Decentral Energy to offer a new and innovative peak shaving power purchase agreement whereby, for no money down, the client receives a loadshedding solution that is also run during peak hours as a peak shaver.

The agreement is designed to run for 10 years (half of the machine’s life) at which point ownership is transferred to the client. Depending on the user’s gas price and tariff structure, client positive cash flow can be realised in as soon as the second year of the agreement. This is without considering the power outage protection that the machine provides. Compared to an off-grid diesel user, or coupled with a long-term solar/gas hybrid PPA, savings are instantaneous, and very attractive.

“The idea is to change the way companies approach protection against power outages, by offering a solution that is cleaner, saves money over its life, and addresses the client’s immediate cash flow concerns,” says Christian Bode, Director at Decentral Energy. “We are proud to be making this offer alongside SustainPower.”

Clients who are currently industrial gas consumers of either natural gas (methane) from the pipeline, CNG or LNG sources, or liquefied propane gas (propane) are best positioned to make use of their fuel supply for backup power and peak shaving solutions.

SustainPower is geared to provide a holistic, off balance sheet, zero capital down, gas or solar hybrid solution in order to mitigate the detrimental economic effects that loadshedding is having on industries and the commercial sector. If you are interested in being clean and efficient while protecting yourself against unplanned outages, give SustainPower a call to find out more about this unique and innovative solution. ESI

About the Company
With a special focus on energy efficiency, SustainPower’s systems save clients’ money through power outage protection, peak shaving and waste heat recovery. www.sustainpower.co.za