Turkish ‘powerships’ ride wave of energy crises amid COVID-19 outbreak

The Orca Sultan and Raif Bey powerships docked in a shipyard in Yalova. The COVID-19 crisis has birthed new opportunities for Turkish powerships. (AFP)
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Updated 29 June 2020

Turkish ‘powerships’ ride wave of energy crises amid COVID-19 outbreak

  • The pandemic has created a windfall for the Turkish company by playing to the advantages of its floating power plants, especially the unbeatable delivery times

ALTINOVA, Turkey: A Turkish company’s expertise in turning freighters built for carrying coal or sand into mobile power stations is proving to be an antidote to woes brought onto energy supply projects by the coronavirus.

Floating electricity plants known as powerships come into their own when conflicts or other crises make the construction of land-based power stations difficult.

The novel coronavirus pandemic is such a crisis, having forced many companies to shut down and bringing construction to a halt.

Enter Karpowership, which has been building floating plants for almost 15 years by converting old freight ships, making it a leading player in the industry with a fleet of 25 powerships.

The pandemic has created a windfall for the Turkish company by playing to the advantages of its floating power plants, especially the unbeatable delivery times: 60 days maximum to anywhere in the world.

Lockdown measures taken by several countries for months have obstructed progress of conventional power plant projects, whose construction already takes several years even in normal times.

“Credit committees were not approving credits, suppliers weren’t able to meet their timelines, (and) workers weren’t able to do constructions on site,” Zeynep Harezi, Karpowership’s chief commercial officer, told AFP.

“So the demand for our powerships naturally increased. We are now speaking to more than a dozen countries who requested powerships as soon as possible,” she added. Powerships have existed since the 1930s.

The principle is simple: A merchant vessel is converted into a floating power plant, typically fueled by diesel or liquid gas used to generate electricity.

It then travels to its destination where it connects to the local grid, supplying a steady stream of power.

Karpowership has deployed 19 such plants in 11 countries in Africa, the Middle East and Asia as well as Cuba.

The floating plants provide more than half of the electricity consumed by several West African countries, including Guinea-Bissau, The Gambia and Sierra Leone.

They are particularly suitable for countries whose capacity is insufficient to meet growing demand, or where infrastructure has been destroyed by conflict.

According to Turkish media, Karpowership is in talks about sending several powerships to war-torn Libya.

Karpowership said it was ready to deploy powerships “from this summer onwards” to supply 1,000 megawatts (MW) or “eight hours of additional electricity” per day to a country facing massive blackouts.

To meet delivery deadlines quickly, the company invests massively to build ships before they have been ordered, a calculated risk.

“There, you see a billion dollars sitting on the dock,” Harezi said, pointing to six powerships of different sizes moored in a shipyard in northwestern Turkey, pending the signing of deals.

“At the shipyard, it takes around 18 months to build a ship, but since we are doing our construction back to back, we can produce our ships in six months,” explained Deniz Yalcindag, a Karpowership engineer.


Analysts urge Canada to focus on boosting the economy

Updated 06 July 2020

Analysts urge Canada to focus on boosting the economy

  • Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time

TORONTO: Canada should focus on boosting economic growth after getting pummeled by the COVID-19 crisis, analysts say, even as concerns about the sustainability of its debt are growing, with Fitch downgrading the nation’s rating just over a week ago.

Canadian Finance Minister Bill Morneau will deliver a “fiscal snapshot” on Wednesday that will outline the current balance sheet and may give an idea of the money the government is setting aside for the future.

As the economy recovers, some fiscal support measures, which are expected to boost the budget deficit sharply, could be wound down and replaced by incentives meant to get people back to work and measures to boost economic growth, economists said.

“The only solution to these large deficits is growth, so we need a transition to a pro-growth agenda,” said Craig Wright, chief economist at Royal Bank of Canada. The IMF expects Canada’s economy to contract by 8.4 percent this year. Ottawa is already rolling out more than C$150 billion in direct economic aid, including payments to workers impacted by COVID-19.

Further stimulus measures could include a green growth strategy, as well as spending on infrastructure, including smart infrastructure, economists said. Smart infrastructure makes use of digital technology.

“We have to make sure that government spending is calibrated to the economy of the future rather than the economy of the past,” Wright said.

Canada lost one of its coveted triple-A ratings in June when Fitch downgraded it for the first time, citing the billions of dollars in emergency aid Ottawa has spent to help bridge the downturn caused by COVID-19 shutdowns.

Standard & Poor’s, Moody’s and DBRS still give Canadian debt the highest rating. At DBRS, Michael Heydt, the lead sovereign analyst on Canada, says his concern is about potential structural damage to the economy if the slowdown lingers too long.

Fiscal policymakers “need to be confident that there is a recovery underway before they start talking about (debt) consolidation,” Heydt said.

Fitch expects Canada’s total government debt will rise to 115.1 percent of GDP in 2020 from 88.3 percent in 2019.

Royce Mendes, a senior economist at CIBC Capital Markets, said the economy still needs more support.

“Turning too quickly toward austerity would be a clear mistake,” he said.