I’ve been in Houston this week for CERAWeek, which brings together the world’s top energy executives, government leaders and investors. The agenda is packed with impressive panels and speeches. And as you sit in exhibition spaces, walk through the halls and go to meetings, you start hearing what Lisa Davis described earlier this week as an important conversation about the future of energy.
Siemens’ Gas and Power CEO wrote, “As the energy industry continues to transform amidst a digital and technological revolution, we are moving to ever more complex, multi-modal and decentralized systems. Existing business models are being disrupted and traditional energy value chains recomposed. The promises of proactively partaking in a cleaner, more reliable -- yet flexible -- energy market are now more than just promises.”’
IHS Markit Vice Chairman Dan Yergin echoed Lisa’s comments this week when he told CNBC that technology and innovation “runs through CERAWeek in a way it never has before.” Oil and gas companies are viewing themselves as energy companies; transportation companies are viewing themselves as mobility companies. Meanwhile, a focus on climate change is shining a spotlight on how the three Ds impacting the energy industry – digitalization, decarbonization, decentralization – can also lead the world to a low-carbon future.
Siemens’ work with customers is informed by the current trends reshaping the energy landscape. Yet we also maintain a long-term view. Our strategy is built around global megatrends driving technology in the future. To sum it up, we’d say that the change and disruption we see today is only beginning.
Imagine solar and wind power generation increasing six-fold.
Imagine half-a-trillion devices connected to the Internet of Things.
A much bigger transformation is coming. And we can already see this transformation happening in metropolitan areas.
One of our key megatrends, in fact, centers on urbanization. This tells us that, by 2050, three out of four people will live in cities – cities that, already today, are like living laboratories for our future energy system. Which is a key message I shared yesterday in my panel session: Powering the Cities of the Future.
Siemens’ partnerships with more than 100 U.S. cities make clear to us that urban areas of all sizes, and in all regions of the country, are committed to using technology to prepare for the future and improve quality of life. More than a dozen cities across North America, for example, have used Siemens’ City Performance Tool to make data-driven assessments of which infrastructure technologies and choices will best reduce emissions and improve air quality.
One choice is to focus on buildings, which account for 40 percent of global energy consumption. Siemens already has a long history of using our building technologies to help customers significantly reduce energy usage and cut costs. Now that we can connect infrastructure to the Internet of Things, we can do more. Leveraging low-cost sensors, the cloud and machine learning, we can create perfect places. These are automated, connected buildings that, among other things, optimize how buildings consume energy.
Another choice is electrifying mobility. When we use our City Performance Tool, electric vehicles, in particular, typically stand out as the most effective way to pursue sustainability.
But here’s the thing: electric mobility – not only cars, but buses, trains, planes, ships and micro transit – can’t scale without the energy industry helping to modernize and digitalize U.S. infrastructure. Electric vehicles require widespread charging infrastructure. That in turn requires a power grid that can handle more overall generation. Even in the pursuit of a low-carbon future, more power – not less – is required, and now the technology is here to support the transformation.
Software platforms and automated controls developed for power generation, distribution and transmission are ready and able to prepare grid networks for unpredictable spikes in demand. Onsite power systems – like microgrids – are ready and able to be the backbone for a new, decentralized model of power delivery.
Our power grid has been called the great enabler because it’s the technology that ultimately enabled everything else. The question now is: What are we asking the power grid – and the energy industry – to enable in the future? Siemens is asking this question every day as we take our experience working in the physical world and combine that with the new digital tools we have.
A dual focus of delivering for customers and solving the world’s greatest challenges will guide us every day going forward.