32 POWER MATRIX
POWER MATRIX
33
The Right Mix
Global patterns of energy production and consumption are becoming increasingly complex. Michael Suess, CEO of the Siemens Energy Sector, had an animated conversation with Living Energy’s correspondent about the upcoming
age of clean electrification, the power matrix, the need for stronger grids, and
why Siemens is uniquely positioned to meet that need of future “prosumers.”
Text: Haig Simonian, Photos: David Sailer
Michael Suess has been Chief Executive of
the Siemens Energy Sector since April 2011.
34 POWER MATRIX
“Our global coverage and
products and expertise
are second to none.”
POWER MATRIX
Almost overnight in early 2011,
a small Japanese coastal town leapt
from regional obscurity into a global
term for the world’s energy challenges. Since the nuclear disaster in
Fukushima, Germany and Switzerland
have decided to abandon nuclear
power, China has put its ambitious
program on hold, while other countries are considering their position.
But what appears a red light for one
form of generating electricity may
be an opportunity for others, as nations around the world reconsider
their post-Fukushima options. Few
people are as well placed to weigh up
those alternatives as Michael Suess,
the 48-year-old German engineer who
recently took over as Chief Executive
Officer of Siemens’ Energy Sector, a
worldwide business with more than
80,000 employees and more than €27
billion in sales.
“The world has reacted in very different ways, based on national interests
and national traditions,” he says in
an interview at Siemens’ Munich headquarters. “We don’t expect a significant long-term reduction in the role
of nuclear power: Most of the 400 new
reactors planned around the world
will be built. But they still only represent less than 15 percent of required
generating power. The key question
of how the world’s huge demand for
energy will be met remains. The only
change has been to shift the focus
away from one single generating technology.”
Like many in the business, Suess
sees the 21st century as “the new electricity age” – the era when electric
power emerges as the dominant energy
source. “Demand for electricity is still
growing, while reserves of fossil fuels
are declining. Electricity offers some
of the highest efficiency levels in
meeting our energy needs; it can do
so much more,” he says.
Embracing Complexity
But this means leaving behind the traditional picture of large power stations feeding electricity into national
Living Energy · Issue 6/February 2012
grids, and moving on to a much more
complex model. Power sources will
range from traditional plants, including nuclear, to newer types of generating capacity based on renewables
like wind and solar. In addition, large
central power plants will be complemented by an increasing share of distributed power generation connected
– for the medium- and low-voltage
grid – such as combined heat and power (CHP) and rooftop PV. Consumption patterns will change, too, as utilities shift increasingly to a more decentralized power generation system,
where domestic consumers will have
much more flexibility in deciding
how and when to use electricity.
Suess even envisages technological
advances prompting the arrival of an
altogether new hybrid of “consumers”
and “producers.” He calls these the
“prosumers,” recipients of electricity
who may also periodically feed back
into the grid their own power, generated via rooftop solar panels or other
small-scale generating sources.
Therefore, he argues, the recent focus
on nuclear has distracted attention
from the “wider story.” “Even today,
about 1.5 billion people have no access
whatsoever to electricity. That figure
is likely to rise to about 2.5 billion,
given expected population growth. The
issue is not to discuss a single source,
but rather the right ‘mix’ of generating capacity for different countries,
regions, and continents. Only now,
months after Fukushima, are we coming back to that ‘real’ question,” he
argues.
A former engine developer at top
German car groups BMW and Porsche,
Suess pulls out the figures that highlight the challenges. “The world today
has an installed electricity-generating
base of about 5,800 GW. That is expected to virtually double to more than
10,000 in the next 20 years. In China
and India alone, they’re talking about
installing a further 50, 60, 80 GW
per year – that’s equivalent to half the
entire installed capacity of countries
like the UK or Germany. So you can’t
Living Energy · Issue 6/February 2012
just have one source. You need a
whole mix; nuclear, gas, coal, oil, renewables.”
Siemens, he believes, is uniquely
placed to meet such needs. “I think we
are the only company worldwide that
can cover all these demands.” The
portfolio includes the world’s most
energy-efficient gas turbines, a rapidly growing presence in wind power,
and the traditional “backbone” of fossil fuel power generation, as well as
important activities helping the oil
and gas sectors – key sources of power for electricity generators. “And
most importantly, we have the grid
technology available to bring highest
efficient power generation to our
customers.”
Siemens has even coined a term
for the changes ahead. “We call it the
‘power matrix,’” says Suess. Among
the enablers of the power matrix are
strong grids, incorporating elements
such as high-voltage DC (HVDC) and
flexible AC transmission systems
(FACTS), and state-of-the-art instrumentation and control technology,
Suess notes. “We’re facing a much
more complicated world. There will
still be centralized power sources, but
also increasingly decentralized and
distributed ones, like the solar plants
being built in hot, sunny countries
such as Spain, or the giant offshore
wind parks currently planned or
under construction in Germany or
the UK.
That will all need a matrix, as we’ll
need to combine all those different
sources in an efficient and affordable
way. And renewables, by their very
nature, will also require storage. So
far, pumped storage is our best option.
But in time, battery technology will
play an increasing part, whether in
electric vehicles or elsewhere. Gasfired backup capacities will prevail.”
Geographic Determinants,
Cultural Subtleties
All these developments indicate widely differing requirements, with
distinct regional and even national u
35
Siemens Energy Sector
One of the world’s leading suppliers
of a wide range of PRODUCTS,
SOLUTIONS, AND SERVICES in the
field of energy technology.
97,000 employees worldwide. Total
sales of €27.6 billion and profits of
€4.1 billion in fiscal 2011.*
➔ Helps customers GENERATE AND
TRANSMIT electrical power with
maximum efficiency.
➔ Provides EQUIPMENT to produce,
convert, and transport oil and gas,
primary fuels for electricity generation.
➔ Sole global MANUFACTURER with
know-how and products spanning
entire power matrix.
Divisions
➔ Fossil Power Generation
➔ Wind Power
➔ Solar & Hydro
➔ Oil & Gas
➔ Energy Service
➔ Power Transmission
*Effective October 1, 2011, the Power Distribution
Division with a workforce of more than 15,000
was reassigned to the new Siemens Sector Infrastructure & Cities.
36 POWER MATRIX
Visualizing Complexity:
the Power Matrix
As renewable power revolutionizes the energy
system, the former energy chain from large power
plants to consumers is transformed into a power
matrix with a daily growing number of small generating units and myriad nodes. With its global
presence and innovative product, solution, and
service portfolio, Siemens is the only player active
in all aspects and areas of this power matrix, and
is ideally positioned to support its customers
in building the right mix of generating capacity.
Wind park, Te Uku (New Zealand)
Irsching combined cycle power plant (Germany)
Valve hall, Yunnan-Guangdong HVDC line (China)
Central Power Plants
➔ LARGE POWER PLANTS PROVIDE
BACKUP for intermittent wind
and solar
Distributed Power Generation
Grids
➔ Renewable power requires STRONGER
TRANSMISSION infrastructure
➔ Innovative technologies at manifold feed-in points
➔ Improved CONTROL SOFTWARE for market integration
➔ Adapted to LOCAL CONDITIONS
➔ GREATER EFFICIENCY of conventional fossil power plants to meet
supply gaps
System of Systems
One answer is not enough: Each country
has its own power matrix
➔ The shape of the power matrix differs from country
to country
Graphic: Rainer Schubert, Photos: Siemens
➔ Specific market factors vary; e.g., available resources
(like coal, wind, gas), state of economic development
➔ Tailored responses needed for diverse challenges
Storage
Prosumers
➔ Key enabler for integration of renewables
➔ Avoid shutdowns and enhance grid stability
Living Energy · Issue 6/February 2012
➔ Households both produce and consume power as small-scale market players
➔ Rooftop PVs and electric cars set for global breakthrough
Living Energy · Issue 6/February 2012
38 POWER MATRIX
POWER MATRIX
Michael Suess
The head of Siemens’
Energy Sector is an engineer by training, a car
enthusiast, and a historian
in his spare time.
Background
A 48-year-old German citizen,
MICHAEL SUESS studied mechanical engineering at Munich Technical University before taking a
doctorate at Kassel Technical University’s Institute of Industrial
Engineering and Ergonomics.
Professional Experience
Suess has since 1986 worked in
production and planning roles at
leading industrial groups in Germany and Italy, including BMW,
Porsche, and jet engine maker
MTU, advancing to board membership based on his entrepreneurial
skills.
• Joined Siemens in October 2006
as a member of group executive
management of Siemens Power
Generation.
• In January 2008 appointed Chief
Executive of the Fossil Power
Generation Division in the Energy
Sector.
• In April 2011 appointed to
Siemens Group Managing Board
and Chief Executive of the
Energy Sector.
“It is in the DNA
of Siemens to be part
of other countries
and cultures.”
characteristics. Suess highlights the
huge differences in Europe alone.
There are the vast, centralized generating units of Russia and much of
eastern Europe, where power and
heat are often provided in combination. “Then take Africa or parts of
South America, where access to electricity is a challenge in itself. You need
a different approach in each case.
In some regions, like Austria, Venezuela, or Brazil, the topography favors
hydropower. Elsewhere, like Spain,
solar power may have an advantage.
And in much of the Middle East, plentiful local gas supplies provide the
source – also, there’s a trend now towards using other sources for generating power.”
While some countries may be focused
on reducing emissions, other may
prioritize lowering prices, improving
access to electricity, or boosting reliability of supply. Even individual countries can experience priority swings.
Just take Germany. For years, reducing
emissions was the watchword. Then
came Fukushima. “The pendulum has
swung back somewhat since, but not
completely,” says Suess. While expressing understanding for Germany’s
“Energiewende” – the historic move
away from nuclear power that is being
watched closely around the world –
he says that Germany’s politicians
must ensure all necessary legislation
is in place to facilitate a cost-optimal
integration and mix of alternative
sources. “And we need grid enforcement for integrating wind and PV.”
Awareness of countries’ differing
needs – let alone sensitivity to their
national subtleties – is where Siemens
can stand out, he believes. “We have
global coverage and products and expertise that are second to none.”
A passionate historian in his spare
time, Suess starts with the group’s
background to underline the depth of
its relationships in many markets.
“Never forget, Siemens is more than
160 years old and engaged in many
countries for more than a century.
Living Energy · Issue 6/February 2012
Michael Suess met with Living Energy’s correspondent
at the Siemens headquarters in Munich, Germany.
Within just a few short years of our
foundation, we had created first subsidiaries in the UK and in Italy.”
Even in markets where Siemens has
arrived more recently, it has developed a profound local presence. In China, the group has nearly 35,000 employees now. In the USA, that number
exceeds 60,000. “What we’re really
talking about here is a ‘multilocal’ operating company. It is in the DNA of
this group to be part of other countries
and cultures. We take on board the
needs of each society and provide the
answers.”
Suess, who admits to retaining a passion for fast cars and powerful engines
– his career included a stint at leading
Living Energy · Issue 6/February 2012
German jet engine maker MTU – is
just as enthusiastic about Siemens’
range of technology. “I just get to play
with bigger engines now,” he jokes.
“It’s against an engineer’s spirit to say
everything is covered, but we really
do cover a wide range in terms of products and solutions. Of course, we have
competitors fighting it out with us in
this area or that – and such competition is very healthy for all of us. But
there really isn’t anyone else that can
offer products across the entire value
chain or range of customer needs
the way we can.” p
Haig Simonian is Switzerland correspondent
of the Financial Times.
39