MCD INTERNATIONAL ENERGY SOLUTIONS www.mcd-energy.com
MCD Energy
AFRICAN
PROMISE An Exclusive With MCD Energy Director, Manuel Duggal By: Nicholas Paul Griffin 2
Energy & Renewables
M
CD International Energy Solutions is an energy consultancy with over 20 years’ operating experience in Europe, the Middle East and Africa, working to transform the way in which organisations across the globe think about and utilise power. Aspire Africa recently secured an exclusive interview with the company’s Managing Director, Manuel Duggal, to discuss MCD’s African success story to date, and the direction it will take going forward.
Strong Relationships MCD recognises that organisations operating in remote locations are not just large consumers of power, but also the driving force behind new capacity instalments, with the potential to push innovative, cost-efficient and sustainable power solutions. “MCD fully understands the power requirements of utilities,” Mr. Duggal says, “oil and gas companies and mines in remote locations in Africa and the Middle East, where we have worked extensively over the last 15 years.” Mr. Duggal himself offers valuable expertise in the power and environmental engineering sectors having worked in Africa, Europe and the Middle East, and with both private and public listed companies. The concept for MCD International Energy Solutions was established several years ago, when the opportunity arose for substantial power work on a project for Nevsun Resources in Eritrea.
Entrance - New Luika Mine Processing plant from HFO Fuel Storage Facility
Manuel Duggal, Director MCD International Energy Nevsun, a Canadian listed, junior miner, was looking for ways to build a 20MW power plant without the capital outlay, which would allow the company to make regular OPEX payments for the power it uses and guarantee the power for its mine. The solution was a turnkey, third partyoperated power plant, which heralded the beginnings of MCD as a company and was quickly followed by more high profile work in the region. MCD has been working with Shanta Gold, an emerging gold producer located in Tanzania, since early 2013, and undertook extensive work for the company following a detailed economic assessment. MCD advised Shanta Gold to change the existing power plant from diesel to heavy fuel oil, adding a 450,000 -litre fuel storage facility Aspire Africa · Nov/Dec 2015
3
At MCD we believe that building strong relationships between the supplier and their clients is key.” Manuel Duggal
and a hybrid solar PV farm, reducing the cost of power per kWh by 35%. For Hummingbird Resources in Liberia and Mali, MCD has assisted with high-level power trade-off studies on conventional and renewable energy and tendered the power plant and fuel storage facility on behalf of the client. The studies examined diverse power options, including biomass, gas and solar, as well as assessing the stability of the grid. The power evaluation will be integral to the upcoming pre-feasibility study for the Dugbe Shear Zone project and for the commissioning stage of Yanfolila in Mali. “At MCD we believe that building strong relationships between the supplier and their clients is key,” Mr. Duggal explains. “We advise our clients on the best options available in the market and examine the advantages and disadvantages of each solution.” This focussed approach results in recommendations for the procurement of the best technical and most cost-effective power solutions for the project, a solution that operates 24 hours a day and 365 days a year, whilst maximising savings on fuel. MCD works closely with a group of associates who have key skills in engineering, commercial management and business development. The team has in depth experience of remote power plants and power technologies. Using its combined experience of working on projects in remote locations, MCD analyses each individual project to create the most economically, technically and logistically robust solution for its clients. “We base our plants’ recommendations on power plants that we know have a proven track 4
MCD International Energy
record,” Mr. Duggal says, “and then combine these with innovative new technologies. The key to our success is to focus on the project goals and to deliver the results we recommend in our initial trade-off study.”
Africa Having worked on the continent for the last 15 years, Africa remains a major focus for MCD, with the company recognising future continental growth in terms of power infrastructure development. MCD’s expertise is therefore key to the success of its clients, especially in Africa, where the company works with mines, utilities, industrial consumers and International Oil Companies (IOCs). “There is no single region on the continent where we operate,” Mr. Duggal explains, “but as we see an ever-increasing demand for reliable power, the trend is moving towards decentralized power solutions and micro grids.” MCD therefore identifies projects as they arise, offering its expertise wherever it is required. Mr. Duggal believes most African countries will eventually be managed using decentralized power plants rather than more conventional centralized solutions. This decentralized model could be for use in a remote mine in East Africa, or equally for an industrial consumer looking to secure supply of a key utility, like a water pumping station in Namibia or Ghana.
MARK TANTON
“What is fascinating about this business is that no two projects are the same and each Managing Director, new opportunity presents a new and different challenge for us toRed resolve a suitable Capwith Investments power solution.”
Energy & Renewables
5MW power plant and HFO FSF This diversity of project and environment means the company must work hard to tailor its services and strategies to a particular client, meaning each project must be meticulously planned. “First we try to understand what the proposed solution for a project is or what is physically installed,” Mr. Duggal says. “Then we analyse the electrical consumers and their demand profile.” “This gives us the overall size of the power plant that we need. Once we understand the demand, we review the overall project, the different fuel costs and availability of supply.” The company will also look at alternative technologies that are technically and economically viable for the project like solar, wind, hydroelectricity (HEP), battery storage and even hydrogen fuel cells. After evaluating all the options, MCD makes its recommendations to the client, before
going on to compose, issue and evaluate the tenders for the client. The scope might include the power plant, fuel supply and fuel storage contracts. Finally, MCD will offer to perform the engineering, procurement and construction management (EPCM) of the installation and commissioning of the plant once it is completed.
Thermal Power Hybrid Working with Shanta Mining Company Ltd in Tanzania during 2013/14, MCD provided extensive consultancy on the alternative power sourcing and deployment options available to the company. A detailed economic assessment was carried out in 2013, taking into account the available fuel sources, traditional and renewable power generation technologies, the environment in which the company operates and other variables. Aspire Africa · Nov/Dec 2015
5
www.mcd-energy.com
Redavia Tanzania Reference Plant Following a tendering process for both power generation technology and the fuel supply, Shanta selected a Heavy Fuel Oil Power Plant with a Solar Hybrid PV power plant provided by Redavia Solar and a managed fuel facility.
has given MCD the impetus to develop its business further in this direction, which is driven forward by the huge potential offered in the East African region for further expansion.
MCD supervised the installation of the new power plant and the fuel storage facility, which was commissioned in early 2014. The addition of the Solar Hybrid PV power plant has allowed Shanta Gold to save an additional 0.02-0.03 USD per kWh on fuel.
“East Africa offers the ideal environment for renewables,” Mr. Duggal explains. “Located almost directly over the equator, it has one of the highest levels of solar irradiation in the world.”
Whilst this seems small in relation to the overall reduction in power cost, over the life of the mine the plant not only generates fuel savings for the mine but also reduces emissions and generates carbon credits. This reduction helps the mine meet stringent environmental requirements being imposed on mining operations worldwide, as well as offering the opportunity to sell any surplus electricity to the local community. The initial success of the Shanta project 6
MCD International Energy
Likewise, the region benefits from some of the fastest growing global economies, particularly those of Kenya, Tanzania, Zambia and Mozambique. With economic prosperity now directly linked to accessibility of power, it is important for a combination of thermal plant and renewable power to be provided economically and with consideration for the environment. This is only the beginning however, and plants like the one at Shanta Mining Co Ltd are only
Energy & Renewables one of many opportunities in a region which has seen a dramatic growth in GDP over the last 5 years.
Looking to the Future “As a business based in Europe,” Mr. Duggal says, “we feel very privileged to be able to operate in and bring our expertise to countries in Africa. In every country we work in, we try to learn how to adapt to and appreciate the local customs and traditions.” Following several visits to Tanzania in 2013, MCD established links to the local sandal industry, which is based out of Arusha in Northern Tanzania. Through a local retailer the company started to bring leather handmade sandals back to the UK. “A series of coincidences lead us to learn that these sandals are not only quite fashionable, but are also excellently made and finished. Proceeds from the sale of these sandals were donated to a school local to our offices in the UK.” MCD aims to continue to develop its support for local Tanzanian communities, whilst also contributing to funding for UK schools and raising awareness amongst UK school children of African community issues.
450,000 litre fuel storage facility “Having already strengthened our team in 2014,” Mr. Duggal adds, “we will continue doing this over the next 12 months.” This expansion is especially important as the nature of operating in remote locations is changing rapidly. Miners, IOCs, industrial consumers and utilities are regularly being asked by their investors and sponsors to review their operations and reduce both CAPEX and OPEX in order to secure funding.
Through its innovative solutions, MCD has helped its clients to procure and install the best power plants for their projects, and continues to push the boundaries and challenge the norm of what is an acceptable power solution for a project.
“At MCD we believe that innovative solutions such as thermal/renewable hybrid power plants—that not only offer the client the opportunity to reduce emissions and offer the local community more accessibility to power, but also have a solid economic foundation— will become the norm over the next decade.”
In addition, MCD is always looking to add other proven technologies to its plants. “Whilst remote miners, utilities and industrial consumers are our main focus, we are exploring other sectors where continuous power is an essential part of their business.”
In this respect, MCD is well on its way to becoming a major player in the future of African energy. “MCD has put a stake in the ground,” Mr. Duggal concludes, “and we look forward to playing our part in making this happen.” ASPIRE Aspire Africa · Nov/Dec 2015
7
mcd-energy.com Manuel Duggal Director Mobile: +44.7795.421460 Tel: +44.1608.684488 email: manu.duggal@mcdie.com Skype: manuelduggal
Aspire-Africa.com