Aggreko's Rupert Soames: Churchill's grandson brings light to Africa

Chief executive of Scottish generator-hire company Aggreko provides power – from Kenya to Glastonbury
Tim Webb
guardian.co.uk, Friday 23 October 2009
For the only time during the interview, Rupert Soames, chief executive of heavy-duty generator rental firm Aggreko, seems genuinely lost for words.
It's a bit like one of those awkward Desert Island Discs moments on Radio 4, when the interviewee becomes uncomfortable if the questions get too personal, that passes only when the next disc is introduced.
Soames has veered off from talking about Aggreko to try to explain his obvious and genuine fascination with Africa, where hundreds of millions of people – and their governments – rely on his company to keep the lights on.
After a long pause, he finds the phrase he's looking for: "It's the potential of the place. The size … People have to struggle with really difficult issues – many of their own making, many of other people's making."
A quick look at his family tree provides an obvious explanation for his passion. His father was Lord Soames, the last governor of what was then Rhodesia and the man responsible for the British-run elections that brought Robert Mugabe to power in 1980. This is how his "romantic attachment" to the continent began, he suggests, but you could say it was already in his blood: 45 years ago, his maternal grandfather, Winston Churchill, was a staunch but ultimately failed defender of Britain's vast African colonies.
Meeting the convivial Soames, who has a Churchillian turn of phrase to match his ancestry, it is impossible to escape the spectre of history or politics. On his office walls are framed loan notes issued after the Great Crash of 1929. Even some of his expressions seem to belong to a different era, and he is fond of quoting Evelyn Waugh's 1938 novel, Scoop, about a foreign correspondent covering a war in Africa.
Like his grandfather, who, appropriately, first came to public attention with his exploits as a reporter covering colonial wars, he does not beat around the bush. In Africa, Soames declares, "solar is about as much use as an ashtray on a motorbike".
His argument was that peak demand for electricity in Africa occurs after the sun has gone down, between 9pm and midnight. Solar can only help meet this in conjunction with hydro-electricty, which provides much of Africa's power.
But when the rains fail – as they are doing more and more often – the dams dry up and cannot generate electricity. Because most developing countries have limited back-up power generation, governments have to get the likes of Aggreko to ship in large mobile generators to provide temporary power. When renewables like solar or hydro aren't working, Soames comes calling – often literally.
Blackouts
Kenya is a good example. After the rains failed this summer and its hydro plants ground to a halt, the government paid Aggreko to rent 290MW of generating capacity for a year to help limit the waves of power cuts. If the rains come next year, Aggreko will pack up its kit and leave. If they fail again, the generators will probably stay, he says.
In Africa, where Aggreko does most of its business, the number of blackouts is rising as countries' crumbling energy infrastructure fails to keep pace with economic growth.
Soames quotes a World Bank report that estimates African businesses lose 56 days of production each year owing to power shortages, or more than one in five working days. This is good for Aggreko and its business is booming, with shares hitting an all-time high this week. But its diesel- and gas-powered generators operate at higher costs than hydro power and many larger conventional fossil fuel plants, pushing up the price of electricity for the utilities.
Nevertheless, keeping the lights on is a political imperative. "In developing countries, power is right up the hierarchy. In most developing countries, people take whether the lights are on or not as an indicator of good or bad government. The politicians know this and we would hardly do a contract where the energy minister or prime minister is not involved in some way."
This can make Aggreko's business unpredictable and often the company has to respond swiftly. "They say rush rush, hurry hurry, rush. Often we are dealing with customers who have absolutely horrific political issues to deal with," he says.
Sometimes the state-owned utilities miss their payments, which calls for some shuttle diplomacy. "You don't get a payment for two or three months and we go down and protest and beg and sit outside the minister's office, and say please, pretty please, pay us," he says. "Then a wodge of money will come."
In six years of running the international operation of Aggreko, no one has refused to pay outright or seized Aggreko's equipment, although Soames expects something of the sort to happen sooner or later.
The nature of Aggreko's business often brings it into conflict zones or countries still trying to rebuild their infrastructure after a war. One of Aggreko's generators took a direct hit in Iraq recently. "We have been shelled before, but to actually get one through the front of the generator was a little closer than we would have liked. We often deal in places which are very dangerous."
Aggreko, based in Dumbarton in Scotland, has a fleet of power generators that, combined, could provide almost a tenth of Britain's peak electricity demand. Not all of its equipment is deployed in developing countries: it shipped generators out to the US last year after hurricanes Gustav and Ike wrecked existing plants.
Problems
While the international business is growing, the company makes two-thirds of its revenue from renting equipment to supply electricity for organised events, such as the Glastonbury music festival or the Olympic Games in Beijing.
While Soames knows a thing or two about power cuts in Africa, he worries that Britain could suffer from similar problems in a few years unless the government makes investing in new power plants viable for companies. He also believes low-carbon generation such as clean coal are not yet ready to replace the existing clapped-out gas and coal power plants built in the 1960s.
"We have to be realistic: the technologies that people would love to imagine are going to lead to a very high proportion of energy generation coming from renewables are not at a stage where they can be deployed at a large scale globally," he warns. "We have to understand what is the art of the possible."
Does that mean that Soames – in the footsteps of his brother Nicholas, the former Tory minister of state for the armed forces – is itching to get into politics, to knock a few heads together? "One Soames is enough," he growls.