Greener energy on the radar: Make the most of your assets in the energy transition
Decarbonizing power generation must be balanced with energy security and affordability for consumers, says Vinod Philip, CEO of Service Power Generation at Siemens. Therefore, in the short term, improvements in energy efficiency are as important as the fuel shifts, hybridization and deep decarbonization solutions that will come into play in the medium to long term.
By Anna Gertsch
A holistic approach is essential to making power generation greener, says Vinod Philip, CEO of Service Power Generation at Siemens. At the recent World Energy Congress in Abu Dhabi, he shared his views on how we could drastically decarbonize power generation while ensuring energy security and affordability. “From a Siemens perspective,” said Philip, “we have developed a comprehensive framework of products, technologies and solutions that look at what we can do today in terms of increasing the level of decarbonization in existing assets, while at the same time developing what we need to do in the future to take us into a zero-carbon world in the context of power generation.”
This approach, Philip noted, is generating extreme interest from customers as well. Why? “Because they want to make sure, while we transition to a decarbonized future, we make the best use of the assets that they have already invested in.” These assets today are operating in various parts of the world that rely on gas and coal for power generation. “What we have is a suite of technologies that we can bring into this asset base through modernizations and upgrades on the one hand, and, on the other hand, we have some very innovative solutions where we can replace existing assets in some form of an exchange.” For example, replacing older, low-efficiency gas turbines, steam turbines and generators with more efficient ones would lead to an overall improvement in efficiency and lower the carbon footprint.
Carbon reductions: better now than later
Another option, said Philip, is combining of technologies. “With our joint venture with AES [Energy Storage] – called Fluence – we combine battery storage with gas turbines. We also look at ways we can bring in an increased amount of hydrogen into the combustion of a gas turbine.” And he emphasizes that all these solutions could be implemented right away and create significant decreases in greenhouse gas emissions. “You still have steam fleets in some parts of the world with efficiencies in the high twenties and low thirties,” Philip pointed out. “If we can improve those and make them upper high thirties to low forties, that means a significant improvement in carbon footprint.”
The same goes for gas turbines installed a few years ago, which can be upgraded to run more efficiently, and for the exit from coal, which at a certain point, Philip maintained, is inevitable. “The question is,” he said, “How do we transition to that point?” In many cases an immediate or short-term transition is simply not economically viable. In those cases, Philip added, Siemens can “help customers who want to make sure that they are able to optimize the neutralization of their assets, whether they be coal or gas.” And they can do this while ensuring the best economic return for them.
The Green Energy Radar
The trinity of decarbonization, energy security and affordability is the basis on which Philip and his team have created the Green Energy Radar, dividing the options into three categories. “On the one hand,” Philip explained, “we have the things we can do today to improve the efficiency of our given assets. Then we talk about how we can drive a shift in fuel type. We go from low-carbon toward cleaner fuels, like hydrogen, and also drive hybridization where you can combine the technologies.” Beyond that, in the medium to long term, there are the deep decarbonization technologies necessary for a carbon-free future.
According to Philip, each of the three categories can be useful in the context of the customer’s individual needs: “We have a whole host of technologies at various stages of maturity ready for use, and we work together with our customers to find ways to implement them.” Jointly, Siemens and the customer identify the most reliable and cost-effective ways to transition that are unique to each customer’s situation. One customer in Taiwan replaced nine existing gas turbines with a more advanced version of the same turbines that were significantly lower in emissions and significantly higher in efficiency, drastically reducing their carbon footprint. Other customers are installing batteries along with gas turbines to drive hybrid power plants. Philip added: “We’re also having many prototypes right now where we are looking to use excess energy from renewables to be able to create hydrogen through hydrolysis and use that in gas turbine combustion.” Recent trials at the Siemens test center for gas turbines in Berlin showed that turbines can run on 100 percent hydrogen, which could reduce the carbon footprint to almost zero.
Minimizing the disruption
Philip is convinced that one-size-fits-all solutions don’t exist. “There are some customers who are looking for extending the life of an existing asset by a few years,” he explains, “and depending on where they are in their financial analysis, we are able to provide them with either an interim or a long-term solution.” These solutions include financing options through Siemens’ own Financial Services.
Policy aspects play another important role in decision-making processes, Philip said, with, for example, carbon pricing being an important push factor for change. “If we can find ways to make carbon more expensive and more financially impactful, then it creates a much better financial return for implementing the solutions that are much deeper in terms of deep decarbonization.”
Is disruption inevitable to meet those long-term CO2 targets? Yes, says Philip – eventually changes to the economies will be disruptive. “However, the question is: How do we minimize the disruption in the short term – from a societal perspective, a financial perspective – so that we can enable the revolution to be as smooth as possible?” For the short term, Philip believes in an evolutionary rather than a revolutionary approach for their customers: “We at Siemens have to find ways to give all of them a chance to transition in a smooth, reliable and affordable manner.” So while green energy is surely on Vinod Philip’s radar, he’s not losing sight of how important energy security and affordability are.
Anna Gertsch is a freelance writer based in Geneva, Switzerland.
Combined picture credits: Siemens AG
Vinod Philip is the CEO of Service Power Generation at Siemens. After studying materials science at the Indian Institute of Technology in Bombay and the University of Central Florida, he earned an MBA in Management and International Business at the Crummer Graduate School of Business at Rollins College. He started with Siemens in 2004 and rose through the ranks to become CEO of the Siemens Generator Business Segment in 2013, followed by the CTO position in the Power and Gas Division in 2015 and his current CEO post in January 2017.