Global Trends
Lisa Davis on
Emerging Global Energy Trends
Shale oil and gas, distributed energy, big data, and energy
storage are disrupting the status quo in the energy industry.
Living Energy met Member of the Siemens Managing Board
Lisa Davis to discuss global energy trends.
Text: Justin Gerdes Photos: Chris McEniry
Y
ou come to Siemens with
nearly three decades of experience in the oil and gas
sector. What attracted you to this
new challenge and new role with
Siemens?
Lisa Davis: That’s a good question,
because I’ve always very much enjoyed the oil and gas business, so it
wasn’t a desire to leave oil and gas,
but more a desire to expand my
knowledge and ability to participate
in the energy field in total. Oil and gas
is a big part of energy, but there’s so
much more to it. If you look at where
the energy business is going, if you
look at where society’s demands in
the energy field are, it’s more around
electrification; it’s more around alternate fuels; it’s less traditional oil and
gas. The demands of society are growing so fast that you have to have solar,
you have to have wind, and other
sources. Gas becomes a much more
relevant part of the energy portfolio.
42 Living Energy · No. 11 | December 2014
How will you use your oil and gas
industry expertise to help position
Siemens for growth opportunities
in the coming years?
L. Davis: I have spent almost 30 years
now in oil and gas, so I have a very
good understanding of the market
and how the different oil and gas companies operate, whether they be oil
and gas companies in the upstream,
midstream, or downstream. I do see
significant opportunity in all three of
those areas. Oil and gas customers are
very different from what we see in the
rest of our customer base – the utility
customers, for example. They have
different expectations. They’re looking for solutions, to a large extent, and
not project support. They’re also looking for significant innovation.
One of the big energy stories in the
USA in recent years has been the
fracking boom, tapping unconventional oil and natural gas. Does
u
Siemens Board Member Lisa
Davis on the future energy
market: “There’s an incentive in the marketplace that
drives development of new
solutions; and, over time,
those solutions become
more and more economical
until growth takes off. I see
that happening in storage.”
Global Trends
Siemens plans to have a bigger
footprint in that part of the market
in the USA?
L. Davis: At Siemens, we see that area
as a huge opportunity. It’s an area
where we’re having success today in
terms of capturing business, but
there’s so much more out there that
we could do. With my background, I
bring knowledge of the marketplace.
I know how the oil and gas companies
do business. I know what’s important
to them.
Global Trends
Lisa Davis
The recently announced agreement to acquire Dresser-Rand
strengthens Siemens’ portfolio for
the oil and gas industry. How will
Dresser-Rand be integrated in the
Siemens strategy?
L. Davis: Our aim is to become the
leading rotating equipment and process system integrator for the oil and
gas industry. Dresser-Rand has
strong presence in oil and gas, a reputation for technology leadership and
innovation, and a talented and experienced leadership team. Our intention is to leverage these strengths by
maintaining the existing company
and brand name and selectively moving complementary products and
­services from the existing Siemens
portfolio into Dresser-Rand enabling
us to offer a much broader range of
products, services and solutions to
meet our customers’ needs. We are
also purchasing Rolls-Royce’s business in aero-derivative gas turbines,
which have a very strong footprint in
the oil and gas industry. That will
make us more attractive to oil and gas
customers and offer them a broader
solution.
and gas, the situation calls for distributed-power-type solutions – not the
traditional utility supply. Furthermore, Siemens is developing subsea
power grid solutions for use 3,000 meters below the surface of the ocean.
The oil that is available globally is
becoming harder to reach, requiring developers to spend more money to reach offshore deposits. How
does Siemens plan to position itself
in that part of the market?
L. Davis: Our approach within
Siemens is to build on the competence
that we have in electrification, in automation, and in data management. If
you look at the challenges in the oil
and gas business and the hard-toreach locations of unconventional oil
The power sectors in Europe and
the USA are becoming less dominated by big electric generation
utilities, especially in Germany,
where very little of the new renewables coming online are owned by
the big utilities. How does Siemens
plan to take advantage of a more
decentralized power sector?
L. Davis: We have small and medium
gas turbines, both those using the existing technology within Siemens and
Rolls-Royce’s aero-derivative turbines.
44 Living Energy · No. 11 | December 2014
Background and Education
Lisa Davis studied chemical engineering
at the University of California, Berkeley,
where she graduated with a Bachelor of
Science (Honors).
Professional Experience
During her nearly 30-year career in the
oil and gas industry, Lisa Davis served in
several executive positions. Before
j­ oining Siemens in August 2014 as
a Member of the Managing Board,
responsible for the Division of Power
and Gas, D
­ ivision Wind Power and
Renewables, Division Power Generation
Services, and North and South America, Davis served as Executive Vice
­President, Strategy, Portfolio & Alternative Energy for Royal Dutch Shell.
We also have a very strong business in
wind, both onshore and offshore. Our
smart grid technologies are very well
suited for integrating the distributed
power generation units into the grid.
It’s not just about generating the power, it’s also about bringing that power
into the broader infrastructure. In addition, we have very good potential in
the area of storage solutions. How do
we create more capability not only to
generate power in a very distributed
fashion, but also to then store it for
broader use?
Historically, gas turbines have
been a strength for Siemens.
Utilities in the USA are planning
for pending regulations from the
Environmental Protection Agency
under the Clean Power Plan requiring each state to come up with a
cleaner generation portfolio. How
is Siemens preparing for coming
regulatory changes in the USA?
L. Davis: The market is changing; that
is a fact. Renewables are becoming
even more affordable, and they increasingly reflect the market cost for
power. We see renewables becoming
a much stronger and more competitive form of energy in the future. This
is also prompted by the challenges
within the USA in connection with the
shift from coal to gas to renewables.
The EPA’s Clean Power Plan certainly
strengthens and reinforces that
trend. We expect that the importance
of highly efficient and flexible gas
power plants, as well as of renewable
energy plants, will continue to grow
significantly. Our gas turbines offer
very clean power and very reliable
base-load operations; on the other
hand, our clean energy portfolio,
which is predominantly our wind
business, can be further increased
based on the foundation of the reliable gas business.
Another trend is the move to harness the power of big data in the
energy sector through the use of
digitization and data analytics.
Where does Siemens see opportunities in that part of the market,
with increasing reliance on sensors, remote connected systems,
and smart grid technologies?
L. Davis: We do see this as a huge opportunity. What we are talking about
is the data that we receive from the
sensors on our equipment, but we also
collect – and this is probably less well
known – a significant amount of data
and information generated by our systems from all of our service activities.
We have a very strong service business,
which we leverage to maximize the life
cycle of our equipment. At the end of
the day, though, data in itself doesn’t
have any value; what is important is
how you use it, how you interpret it,
and how you create value with it.
We can also use this data to manage
our systems much more efficiently.
Energy systems are becoming much
more decentralized. The user data
and the information technology help
us to optimize the values of that within the broader system, allowing us to
make suggestions on how to collate
different assets within a system in
order to meet the customers’ needs in
terms of power generation or power
availability.
The diverse mix of clean distributed generation being added to the
grid is creating hybridized energy
systems. What are some of the opportunities available for crossover
applications with heat and cold,
mobility, and power?
L. Davis: As we start to introduce a
greater mix of energy sources, whether they be gas generated or ­renewable
generated, and these sources begin
feeding electricity into the grid, we
have to have the ability to create flexibility in order to optimize the system.
the grid. On the other hand, I also
believe that the economics of storage solutions will be challenging in
the near future. Even though we see
solutions emerging, those solutions
are not as economical as they need to
be to develop at a fast pace in most
regions. This is a typical trajectory
for new technologies in that there’s
an ­incentive in the marketplace that
drives development of solutions;
and then, over time, those solutions
become more and more economical
until growth takes off. I see that happening in storage.
Imagine we were to resume this
conversation ten years from now.
What big trends will have solidified? What surprises will have
come about?
L. Davis: I do see a number of trends
developing. The first one is in the
“We see energy generation becoming
much more flexible, with crossover forms of
energy between power and hydrogen.”
Lisa Davis, Member of the Managing Board, Siemens, CEO Energy
For example, if there’s an oversupply, the power can be transformed
into other forms of energy – power
to heat, to cold, or power to hydrogen for industry, or mobility, or
storage applications.
How close is cost-competitive
energy storage for homes? And
how important do you think energy storage will be in general in
the shift to a more decentralized
power sector?
L. Davis: It’s a field that’s developing quickly. Residential storage
solutions are already emerging. If
you look at some of the producers
who face very high energy prices, it
becomes a lot cheaper for them to
produce on site and store their extra
energy instead of purchasing from
area of electrification. We see more
and more applications running on
electricity rather than primary fuel.
Secondly, we see energy forms or
energy generation becoming much
more flexible; crossover forms of
energy between power and hydrogen.
Third, with the growth and emphasis
on distributed energy, we see power
generation and power consumption
overlapping. You will see new markets with new players, new business
models being required – that’s typical
of any evolving marketplace. p
Justin Gerdes is an independent journalist
­specializing in energy and climate change base­­­­d
in the San Francisco Bay Area. His work has
­appeared at Forbes.com, the Guardian, Yale
­Environment 360, Ensia, and Smithsonian,
among others.
Living Energy · No. 11 | December 2014 45