Wolfgang Dehen is CEO Siemens Energy Sector

We can achieve sustainable energy supplies if we utilize all efficiency potential and all possibilities in the energy mix. I’d like to briefly discuss four themes: the energy agenda, fundamental drivers of the energy business, how to address the challenges, and the future of energy supplies.

Ideally, the energy system is a balance between three key factors and three stakeholder groups – whose interests also must be balanced. The three key factors are: Security of energy supply, protection of the environment and securing economic affordability.

The stakeholders groups are: politics, industry and consumers. Everybody has an influence on the development of our energy system. Politics has set a tough climate goal that has to be met. Utilities are looking for long-term business perspectives in modernizing and expanding infrastructure, and consumers are confronted with the “Nimby Syndrome”. Everyone wants reliable power supplies – but Not in my backyard!

Three fundamental drivers of the energy business are that demand for electrical energy will continue to rise, growing demand for power is being driven by the three global factors and these drivers are in part detached from the world’s economic development.
In 2005, the world’s population hit the 6.5 billion mark and has shown an annual growth rate of 1.2 percent since. Between 1987 and 1999, the world’s population grew by one billion people. Population growth has accelerated.


Wolfgang Dehen

The usage of electrical energy will increase due to higher efficiency. Two examples make it clear how much more efficient it is when electricity is used for mechanical drives. In an electric car, electricity from the battery is converted to kinetic energy with 95 percent efficiency.
Combustion engines have an efficiency of only 20 to 30 percent. The remainder is lost through hot exhaust and the radiator. Driving with an electric motor instead of a combustion engine increases energy efficiency by a factor of 3 to 4 – similar to replacing incandescent light bulbs with energy-saving lamps.

Huge compressors driven by a small gas turbine are used in oil fields to help pump the valuable resource out of the ground. If you replace the gas turbines – which operate at a relatively low efficiency of 20 to 30 percent – with electric drives, and generate the necessary electricity with a highly efficient combined cycle power plant, the energy efficiency immediately increases to over 50 percent.
These two examples make it clear where we are heading to achieve higher efficiency. We will increasingly use electrical energy in all areas of economic, public and private life. Societies will be electrified.

As the electrification of society increases, power consumption will naturally grow. Siemens own forecast for power demands is based on detailed analyses we have conducted in over 160 countries. We see a significant increase in power demand, but no fundamental change in the current energy mix. The share of renewables in the energy mix will increase substantially from today’s figure of approximately 3 percent to around 14 percent by 2030. The share of fossil fuels in power generation will increase significantly in coal and gas.


The Siemens Energy Sector has oriented its portfolio toward two basic points:
efficiency and an intelligent energy system. The greatest potential for a sustainable energy system lies in technical solutions. The goal here is continuous optimization of the mix. In the foreseeable future, all primary energy sources will be needed in order to ensure sustainable supplies of electricity worldwide. It will be critically important to continually optimize the mix of various energy sources. This will mean steadily increasing the share of renewable energy sources such as wind and solar. To compensate for fluctuations in renewable feed-in and in grid loads, we need a fleet of highly efficient, gas-fired combined cycle power plants. They guarantee grid stability since they can be quickly started up and can level intermediate loads and peak loads on demand. Their greatest advantage in addition to their speed and flexibility is their high operating efficiency and the relatively low carbon content of natural gas. We will also have to further optimize fossil-fired power generation with carbon capture technology that separates and stores CO2. In addition, nuclear energy will be an indispensable provider of low-CO2 power. Offshore wind farms are especially promising. Huge potential is available in the North Sea and Baltic. Only 1.5 percent of the possible projects have been built. Another example of how to further optimize the energy mix is low emission base load. With CCS technology more than 95% of the total CO2 amount in the fossil fuel can be captured, but the use of CCS technology also means a 9-10% point drop in efficiency. Siemens has experience in CCS-technology
in Pre and Post combustion:

IGCC – gasification technology: First 500-MW gasifiers for Chinese partner delivered in May 2008 Siemens gasifier technology for low- CO2 power plant in Canada (EPCOR, 2008) IGCC – Gas turbine: E-Class syngas GT for IGCC project in China (Tianjin, 2008) Development of an advanced F-class syngas gas turbine, tailored for CCS gases (in progress) Plants for IGCC in operation since mid-1990s (Buggenum, Puertollano)

Development of proprietary capture process based on environmentally compatible amino acid salt Cooperation with E.ON for pilot plant (coal-fired) in Staudinger (Germany, startup Aug. 2009 ) Cooperation for CO2 separation from flue gas of a combined cycle power plant, start 2009 (Norway) Alliance with POWERSPAN to sell and implement their ECO2 ammonia based technology The second major action area is energy efficiency, and this requires enhancing efficiency along the entire energy conversion chain. In addition to steadily optimizing the energy mix, greater energy efficiency will be necessary for further improving the world’s energy supplies. Technical improvements in all parts of the energy conversion chain can reduce the consumption of fossil fuels and increase the output from renewable energy sources. Consider the ways of increasing efficiency with renewable energies. By using state-ofthe- art 3.6-megawatt wind turbines instead of the 1-megawatt units currently standard in the industry, wind power can be far more effectively exploited. The natural losses of electrical energy during its transport in power grids can be significantly reduced by using power electronics components.

Great efficiency potential can be leveraged in the area of power transmission. In China, we are currently building the world’s first HVDC link with 800 kV and with a power transmission capacity of 5000 MW. In the future, the electricity generated by several hydro-electric power plants will be transported from Yunnan around 1,400 kilometers to Guangzhou via this long-distance HVDC link.
Hydro-electric power generation is economical, environmentally friendly and does not emit any CO2. This HVDC link will save the emission of more than 30 million tons of CO2 a year, compared to China’s normal energy mix. The third logical step for securing sustainable energy supplies through improved efficiency and reduced resource consumption requires a systemic optimization. Central and decentralized power generation of all kinds of power generation technologies have to be managed. By employing intelligent energy management systems in power grids (Smart Grids), electrical energy can be utilized more efficiently – such as bundling small generating units into so-called virtual power
plants, or storing surplus electricity from renewable sources in mass storage units such as heat pumps or networked electric cars.

The real-time monitoring of power consumption with smart meters will have a positive effect in private households, since people can check their personal consumption on a daily basis and take measures to reduce costs.
The challenges facing our energy system are to ensure a balance of the energy triangle and at the same time ensure that the needs of all stakeholders are met. To produce the necessary amount of electricity in a sustainable manner – Siemens is banking on three key steps: optimization of the energy mix, efficiency enhancement along the entire energy conversion chain, and a systemic optimization through Smart Grids to create an integrated and sustainable energy system for the future.

Wolfgang Dehen was the keynoter at Power-Gen Europe, May 26, 2009 in
Cologne, Germany. Dehen is CEO of Siemens Energy Sector and a member of the managing board at Siemens AG.

Power Gen Europe 2010 will be held
June 8-10, 2010 in Amsterdam.