Energy Management
“We Have to Go
Beyond Technology”
Energy management is a huge challenge for practically every
utility in the world. The CEO of ­Siemens’ Energy Management
Division, Jan M. Mrosik, talks about solutions and a whole
range of new business opportunities.
Text: Marc Engelhardt Photos: Detlef Schneider
W
hen it comes to energy management, we’re living in
­interesting times. Which decisive trends do you see for utilities
and grid operators?
J. Mrosik: The energy system in most
parts of the world has been almost
static for decades. But right now, we’re
seeing a lot of change happening at
the same time. This mostly concerns
the generation mix, because obviously, emerging countries like China or
India are encountering strong growth
in their industrial environments.
They’re hungry for energy, and they
need to electrify. In other countries
we have great changes in the energy
conversion chain, in the energy supply chain and – if you take Germany
for example – changes in the whole
energy generation mix. Nuclear is being phased out while renewables are
increasing: In 2014, the amount of renewables increased to 27.8 percent of
the gross power consumption. This, in
turn, calls for entirely new systems in
order to bring power from the source
of generation to the consumer, requiring major changes in the grid. Last
but not least, utilities are facing huge
pressure because of market liberalization, so the whole business environment is changing from a legal as well
as from a business perspective. Our
response to these changes on behalf of
46 Living Energy · No. 12 | July 2015
­ iemens has been to create an overS
arching team within the Energy
­Management division that now represents the whole grid, from high voltage down to low voltage.
this investment, the American Society
of Civil Engineers expects the annual
cost of service interruptions to soar
from around US$30 billion to over
US$70 billion by 2020.
What are the challenges when it
comes to the grid structure?
J. Mrosik: If you look at Europe, renewables – solar or wind – are massively
expanding, and the energy they produce must be fed into the grid. Areas
of energy production and energy consumption are often far apart, so we
need electricity highways. Since much
of the energy production is decentralized, we need to strengthen distribution grids at the same time. Furthermore, renewable energy sources are
fluctuating. So ideally, when the wind
is not blowing or the sun is not shining, you’d be able to get excess energy
from neighboring countries. For that,
we need interconnections.
Are renewables taking off in
the USA on a similar scale as
in Europe?
J. Mrosik: In the not so distant future, renewables will grow massively
in the USA. In some states like Iowa
or South Dakota, already more than a
quarter of consumed energy is produced by wind turbines. Nationwide,
wind power is expected to more than
double over the next five years and
reach 35 percent of total energy production by 2050. All that energy has
to be transmitted to the huge industrial and population centers, especially on the West and East Coasts.
And elsewhere in the world?
J. Mrosik: In parts of the USA, the
grid is almost a 100 years old and unstable. A storm is enough to cut millions of people off from their energy
supply. So what we need there is refurbishment – a lot of investment in
order to make the aged grid and its
450,000 miles of high-voltage transmission lines more resilient. Without
How about the emerging markets?
J. Mrosik: In India, the high-voltage
grid is being upgraded to 1,100 kilovolts over the next years to match rising demand. In Rajasthan in western
India, there are plans to build the
world’s largest solar plant with a final
output of 4,000 megawatts. Again, to
transport this enormous amount of
energy to the points of consumption,
huge HVDC links are going to be
required.
u
Energy Management
Energy Management
How do new grids in general differ
from previous ones? There’s a lot
of talk of smart grids.
J. Mrosik: Transmission grids have
in fact been smart and fully auto­
mated for a long time. The high- and
­maximum-voltage grids all over the
world are closely observed, carefully
measured, and maintained. That is
­because they are extremely critical to
a country’s infrastructure. Whenever
a high-voltage line fails, millions of
people might see an outage. So we
have control centers in place, IT systems, and sensors. What has to be
added now is a comprehensive system
that ensures wide-area monitoring,
also covering the low- and mediumvoltage distribution grids, which will
have to become smarter.
“Utilities are under
enormous pressure.
At S
­ iemens, we
­provide them with
energy management
solutions that help
them successfully
build their business
in times of change.”
Jan M. Mrosik
Why is that?
J. Mrosik: The medium-voltage to
low-voltage grids are the ones closest
to the consumer. In the past, these
grids were fairly “dumb” – simply because they didn’t need to be smart.
If there was a problem, customers
would call and an electrician would
go and fix it. But that’s not good
enough anymore. Since we are feeding more and more energy from decentralized renewable sources into
the system through the distribution
grids, we urgently need to start managing them. Grid operators have to
know what kind of capacity, what
kind of energy flows through each
and every cable within the distribution grids. Today, for instance, there
might be an overload, but we wouldn’t
know that before it’s too late. Also,
the voltage levels are changing because
of the infeed of renewables. With
­sunrise, for instance, a lot of energy
is pushed into the distribution grids.
Currently, they are not designed to
cope with that. What these grids need
is a whole lot of intelligence: sensors,
smart meters, and IT technology.
So operations technology and information technology will be integrated in the long run?
J. Mrosik: Yes, and that comes with
many advantages. Real-time data
from smart meters, for instance, can
be used by utilities to optimize their
48 Living Energy · No. 12 | July 2015
Jan M. Mrosik
energy management. There are opportunities for entirely new business
cases, thanks to this integration. For
example, decentralized wind turbines, small hydro-, or solar energy
sources can be bundled on a virtual
platform to be used as if they were a
single power plant. We’re currently
creating such a virtual power plant in
the province of New Brunswick, Canada. The local utility had to decide
whether to build a gas-fired power
plant that may only have been needed
over a few hours during the year. Instead of that huge investment, they
decided to let us put a system in place
that uses decentralized generation
units and switches off excess loads,
both industrial and residential, if
need be. In this way, the virtual power
plant provides up to 500 megawatts.
We’re talking of huge amounts of
data though – how can they be
properly analyzed?
J. Mrosik: Indeed, the number of data
points alone is enormous and can
quickly go into the millions. The
amount of data created from distribution grids and smart meters is one
thing. Then there are other sources,
for instance weather reports. The generation of renewables largely depends
on the weather. To analyze these massive datasets, you have to use big-­
data platforms that process the data
according to the specific data model
a grid operator or a utility requires.
Data analytics is therefore the key:
turning data into knowledge (see also
“Weinhold’s Power Lines,” p. 30).
As Siemens, we are partnering with
a company called Teradata, a wellknown expert in the field. Last but
not least, we provide applications
with algorithms that are utility-specific and tailored to their very particular tasks.
Collecting the data is comparatively
easy. It’s making sense of it and
­coming to the right conclusions that
makes the difference – and that’s
what our smart grid unit is doing.
Moreover, in order to make sure that
our customers get the maximum
­value out of this, we have formed a
joint venture with Accenture called
Omnetric. S
­ iemens is the majority
stakeholder, and I am convinced that
­providing big-data solutions to our
customers through this entity will
trigger major changes in the industry.
Considering the massively
­increased data flow, isn’t cyber­
security also fast becoming a
new important challenge for
utilities?
J. Mrosik: Cybersecurity is a major
­issue. If someone were to intrude into
a grid, the consequences could be
­severe. The challenge is to maintain
security from end to end. Because
these grids are very complex, there
are a lot of vulnerable entry points
that have to be secured. It starts with
the security of devices in the field
and continues with the communication lines between these protection
devices, sensors, meters, and any
­other ­device out there. Of course,
the IT systems as such have to be secure, too. Then you have to test everything thoroughly, because even
if each and every device is secure,
it doesn’t ­necessarily mean that the
whole chain is secure. To that end,
we consult with our customers, the
utilities and grid operators, and
­provide t­ ailor-made end-to-end security ­solutions.
“I work in the most fascinating business there is,” says Jan M. Mrosik, an
engineer who also studied business
administration and holds a PhD in the
field of laser radar sensor technology
from the Technical University RWTH
Aachen, G
­ ermany. “Energy matters for
everyone individually and for societies
as a whole – and we as ­Siemens can
contribute to a better world because we
are in a leading position in all relevant
application areas.”
Jan M. Mrosik has been with ­Siemens
for 19 years and has held several executive positions. He was appointed CEO
for the ­Siemens communications business in Southern Africa in 2005. Then
he returned to headquarters in Nuremberg in 2007, as CEO of Business Unit
Energy Automation. Four years later,
he took over the Smart Grid Division as
CEO. In May 2014, the Power Transmission Division was added to his CEO portfolio. Since October 2014, Jan M. Mrosik
has been CEO of the S
­ iemens Energy
­Management Division, which combines
traditional technology from high voltage to low voltage and IT to shape the
­intelligent energy system of the future.
Jan M. Mrosik is responsible for the
­business units “Transmission Solutions,”
“High Voltage Products,” “Transformers,”
“Energy Automation,” and “Smart Grid
Solutions and Services.”
We’re talking about a lot of investment here. But is it really worth the
money?
J. Mrosik: Definitely – I’d say this investment will secure the present and
the future of many utilities. In the
past, it was all about serving demand.
Today, reliability and quality are key
topics, together with cost-effectiveness
and innovation. Utilities are under
enormous pressure. At ­Siemens, we
provide them with energy management solutions that help them successfully build their business in times
of change. We develop solutions that
help to bring down cost in line with
market requirements. At the same
time, we ensure that the highest quality is maintained. Take the latest developments in HVDC technology, for
example, transformers with a high
­efficiency level, low-noise transformers that are also very environmentally
friendly. We’re investing quite heavily to be on the forefront of such developments, on the IT as well as on
the system side of things.
an investment is necessary and that
there is a guaranteed return on investment. In these cases, we support utilities in terms of putting business cases
together. We also help them to find
the necessary arguments, bearing in
mind social, environmental, and economic aspects.
Then there are lots of other cases for
industry and investors in more liberalized environments where the business case as such has to work. Let’s
say the electricity prices in country
A and B are different. Then we help to
build a business case around the fact
that energy prices fluctuate throughout the day because of consumption
patterns, so that energy can be provided and delivered to where it’s expensive from where it’s cheap today.
And these business cases have to
be based on very efficient technology.
For us as a provider, that means we
need to go beyond technology, understand the systematics and the foundation of a business case for our customers, and support them in terms of
bringing an investment through. p
How do you help utilities and grid operators to meet these new challenges?
J. Mrosik: Many markets are regulated,
and in these regulated markets it is
important to convince regulators that
Marc Engelhardt reports from Geneva on the
UN, international organizations, and business for
various media, including Deutschlandfunk and
the German news agency epd.
Living Energy · No. 12 | July 2015 49