“What’s next” for Siemens Energy?
Everyone in the energy industry knows Siemens Energy. Its technology is responsible for about a sixth of the world’s electricity production, and even more than that of the United States, or about a third.
Yet Siemens Energy, as it is currently organized, is a relatively new entity. The company was split from Siemens AG and began trading on the Frankfurt Stock Exchange on September 28, 2020. When the split was approved by Siemens shareholders in July of that year, Joe Kaeser, Chairman and CEO of Siemens AG, said: “The spin-off allows us to build two targeted companies, both of which will be strong players in their respective sectors. “
Rich Voorberg, President of Siemens Energy for North America, in a September 13 media call with three journalists including POWER, said: “We are an outright energy company. So what this means is that we go from cover to cover. He started with the company’s production offerings, which include gas and steam turbines, generators, gas engines, distributed control systems, wind turbines, small hydropower plants, etc., then moved on to mentioned industrial applications and finally transmission systems that provide electricity to end users.
But Siemens Energy also has a New Energy Business, or NEB, focused on the future, in particular on research and development (R&D) in hydrogen technology. “ONE is really focused on the future,” Voorberg said. “And that’s probably the most exciting part of our business, it’s the following: Where are we going from where we are today to where we are going to be in the future? “
“Half of the [Siemens Energy] portfolio is what we call low-carbon technologies, ”said Tim Holt, Siemens Energy board member. Yet, he said, this is not enough – the company wants to contribute even more to the global journey to decarbonization – so it is investing in the development of new technologies. “We spend around 1.2 billion euros each year on R&D,” he said.
“We’ve been very busy working on hydrogen,” said Voorberg. “We are the only OEM [original equipment manufacturer] which manufactures turbines as well as equipment that produces hydrogen. So we are really saying we are front to back. We can produce hydrogen from our machines, we can create a solution around the gas turbine and the hydrogen – bring it all together – so that we can create a good solution for our customers to decarbonize. “
Holt suggested, however, that there might be more efficient uses for hydrogen than burning it in gas turbines. “Why do you use hydrogen as a raw material? ” He asked. “Will it be for electricity production? Will it be for synthetic fuels? Will it be ammonia? So, I think there are different ways of doing it and using hydrogen for what application. “
Nonetheless, Holt said it was still important to develop gas turbine technology that could burn 100% hydrogen. That’s because gas turbines are designed to run for 25 to 30 years or more, and owners don’t want to end up with stranded assets. If the units can run on 100% hydrogen, there is the possibility of continuing to operate the plant, even in a carbon-free world.
“I see the easy part is burning the hydrogen in gas turbines. We have said that by 2025 all of our industrial-sized gas turbines will be 100% capable of using hydrogen, and by 2030 all of our units will be able to burn 100% hydrogen, ”he said. Voorberg said. “I have great confidence in our engineers that we will get there. The real challenge in all of this is to produce hydrogen on a large scale, to make it economical. And so, this is where a lot of the technology needs to be developed to grow this hydrogen economy – get electrolysers to become capable of producing hydrogen economically.
R&D investments in other technologies
Beyond hydrogen, Siemens Energy is investing in improving its gas turbine technology. “We are still doing a lot on gas turbines, believe it or not. You know, better efficiency upgrades to look at the installed fleet, ”said Holt.
Much effort is also devoted to R&D on energy storage. “We believe storage will be a game-changer,” said Holt, noting that the exact technology that could revolutionize the industry has yet to be decided. He said there are different options for short-term and long-term storage, as well as maximum production systems. Lithium-ion batteries are likely to be part of the answer, but other technologies, including heat storage, could also be important. “We put a lot of effort into it,” said Holt.
Regarding transmission and distribution activities, Siemens Energy’s R&D efforts are focused on grid resilience and high voltage direct current (HVDC) systems. “How do you connect these offshore wind farms? How do you transport electricity over long distances? Holt asked. “On the switching side, they have SF6 [sulfur hexafluoride], which is even, I think, 20,000 times worse than CO2 [as a greenhouse gas]. How to convert this portfolio into a clean product? “
Holt said combining technologies in hybrid solutions is another attractive clean energy option. Siemens Energy owns approximately two-thirds of Siemens Gamesa, a leading provider of onshore and offshore wind energy solutions. Holt suggested that adding green hydrogen production to a new offshore wind turbine site offers some interesting benefits. For example, there would be no need for power cables – the hydrogen produced at the site could potentially be transported by ships. “It’s a lot on the solutions side,” he said. “How do you combine the technologies we invest in into something that really meets the future needs of a clean portfolio? “
Voorberg noted that Siemens Energy is also working with start-ups to help advance new technologies. He said venture capitalists put a lot of money into startups, but what they don’t often do is help develop technology or evolve products. “We find ourselves in a unique position between startups and customers on the other side,” said Voorberg. “We can go talk to our customers and say, ‘Well, you’ve got this problem. We have this startup. The three of us get together and take a look at these different opportunities. “
Sometimes Siemens Energy invests directly in startups, while other times it simply develops a partnership with the company. “What we can do is coach startups and guide them,” Voorberg said. “What it does is it leads us all to a carbon-free world faster.”
–Aaron Larson is the editor-in-chief of POWER (@AaronL_Power, @POWERmagazine).