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Complexity, Debate and Many Starting Points in the Energy Transition

image credit: Image source and rights: Siemens Energy

I have just finished the third and final day of panel events offered by #SiemensEnergyME in their #EnergyWeek. I took the time to attend all of the panels, the debates, the complexities, and the significant differences as starting points in the #energytransition we are all undertaking was well brought home.

The panels were full of highly knowledgeable people, the hands-on ones that are dealing with the energy issues of today each day, and thinking through the ones for tomorrow. Siemens drew in Ministers, CEO’s, Senior Management, CFO’s, CTO’s and Director-Generals to offer insights and create the atmosphere for what I would call “creative tension” that good knowledge brings to a debate.

The third day was positioned on Sustainability with digitalization as key to the future of solving grid complexity and the growing challenges of renewable integration.

So three themes over three days, transformation, innovation, and sustainability- each was embedded in each day and panel actually.

Also, the second panel on day three took on the role of Hydrogen but got so caught up in this it missed the other part of ‘driving sector coupling’. In many ways, the extra time devoted to the Hydrogen economy aspects needed all the time.

The final session was a fireside chat facilitated by John Defterios (CNN) with Christian Bruch, the CEO of Siemens Energy.

Great insights yet again on day three

In all three sessions on day three, you gained some terrific insights and impressions of the sheer size of the Energy Transition being undertaken. It is enormous and as the world has set thirty years to make a huge dent in carbon emissions, it is of the utmost imperative to get going now on the changes needed today to give any “fighting chance” to deliver on the commitments made by each of the 190b plus countries that signed the Paris Agreement

Climate change is the driving force, the energy transformation is a principle mechanism to achieve this and clean energy needs to replace fossil fuel as the global solution.

Panel One- digitalization, grid complexity and integrating renewables

The 1st panel on Digitalization, Grid Complexity, and integrating Renewables highlighted the sheer differences. From the grasp of the challenges and issues by both HE Hala Zawati, the Minister of Energy and Mineral Resources of Jordan to the planning and development of solutions from Beatrix Natter, the Executive Vice President, Transmissions at Siemens. The counterbalancing that went on here gave the other panelists the platform to demonstrate, illustrate, or clarify their practical issues and needs to drive their business needs.

Where to start and how to summarize the expertise within this panel is hard. I learned a lot, I gained a lot and appreciated all the dep experiences gained from the ‘hands-on’ grappling with the complexities and challenges each grid and infrastructure entity is currently grappling with.

The capacity of grids, the stability, how to integrate solutions, and the increasing new dynamics of the final consumer adding energy they are generating back into the grid. As the Minister of Jordan stated Jordan has 20, 000 consumer/producers, and they are presently not seeing them on their grid and this variable influx of energy input throws the balancing of the grid in knowing their demands or supply.

The integrating of all the viable energy of renewables and where the energy is coming from is becoming increasingly a problem to manage.

The appeal and growing recognition was that we need as managing these assets to bring digital solutions for all the grid or infrastructure to dynamically manage it and understand its volatility in real-time

The energy infrastructure in many countries is aging (badly) and with all the renewable or alternative energy sources available, the ‘toggling’ of keeping energy supply consistent and reliable but to begin to upgrade, even layer on new capacity is a huge problem. This is a worldwide one, well-articulated by the Jordan and Saudi Arabian examples.

Jordan has a remarkable 20% of renewables in its system, in some ways it is having to slow down to allow infrastructure and its management to catch up and understand the new energy dynamics.

The consumer expectancies in energy are on the rise. Energy bills are expected to reduce, electricity is the consumer’s right to be reliable, safe, and stable for all their needs.

To achieve this no one solution alone works, the complete (re)design of grids and the infrastructure needs to be undertaken. What enters in energy fuels, how it gets transmitted, and how and where it is received. For this, you need smarter grids.

There came a point of having very innovative design criteria and entered into the discussion was digitalization. The so-called emerging “Internet of Energy”. This evolution stands alongside the IoT and IIoT in impact, change, and value and it is at a very low point of understanding or delivering.

Beatrix Natter outlined very succinctly some of the opening steps before we can see any platform for the Internet of Energy.

Firstly we have to digitalize the product, enable them to produce real-time data, her physical to digital step only currently being undertaken this gives the first chance to understand the operating conditions of the machine or connecting point.

Then the second step is to build the same digital capability into substations to understand the edge of grids.

Thirdly to make connections beyond two points to begin to turn this into a dynamic data system. It is then the automation of energy flows and intelligence becomes the value of these (essential) investments from the digital investments required.

There was some push back, not on the realization of the time and cost this will take but on the sheer scale of all the needs to upgrade for the grids to become more flexible, adaptable, and resilient. This includes upgrading, layering on new grid solutions, building in storage,  designing for even greater variability and capacity in electricity supply 

The bottom line of the discussion was this is huge to undertake in such a transformation of the grid transmission and infrastructure. The sheer scale and investment cost while the need is to deliver lower energy bills and reliable supply to the consumer.

The conclusions of the panel were “are we jumping too short in our present views?” Are our expectations and needs, adjusting to the new world of renewables ambitious enough? Do we measure Capex or even Opex in the right way? What happens with the growing legacy of fossil fuels that seemingly can’t deliver energy into the system as cheaply. Also, the ways to move from highly centralized large energy management systems to decentralized digitally. Lastly the need to enhanced the system, gain efficiency, and greater control that will offer intelligence and smartness to manage energy in radically different ways.

I could go on and on from the value of this panel. Another time and posts to come!

The second panel was on Hydrogen as the future energy source.

The panel took some time to find its flow in exchanges. Having Saudi Aramco in such an effective advocate as Ahmad Al Khowalter, the CTO was counterbalanced by the German contingent of the Director-General in the Federal Ministry for Economic Affairs and Energy alongside Prof. Armin Schnettler, the EVP New Energy Business for Siemens Energy.

The debate was partly centered on the present one of Blue vs Green hydrogen. What is economically feasible and at scale already, blue hydrogen versus the promise of green hydrogen yet to some at commercial scale.

The debate was partly “seeing is believing” and the commitments of Germany’s government in Green Hydrogen support have kick-started Siemens Energy to be more bullish on raising green hydrogen expectations. versus the abundance of cost-efficient oil from Saudi Aramco in particular.

Saudi Aramco has already in place significantly blue hydrogen facilities at some scale and already piloting a 4o tonne of high-grade blue ammonia shipment. This is a compound consisting of three parts hydrogen and one part nitrogen, marking a successful demonstration of the supply network from Saudi Arabia to Japan. The Saudi-Japan blue ammonia supply network demonstrated the conversion of hydrocarbons to hydrogen and then to ammonia, as well as the capture of the associated carbon dioxide (CO2) emissions

The camps of Green coming from the solution coming from PEM Electrolysers, being pushed hard as needed to be contracted to be realized and supported by the German Government in grants and investment subsidies, and Blue, based on fossil fuel and proposed by Saudi Aramco as the one already in place and potentially easier to ramp up today, as it is at scale and significantly can be quickly used in advancing Power-to-X.

For me, the need to prove Carbon Capture, Utilization, and Storage (CCUS) as a proven commercially solution, viable from broad adoption, is the test of validation of Blue Hydrogens’ right to be at the lasting clean energy table in years to come.

Saudi Aramco can lead the way from the perspective of cleaning up fossil fuels completely, to turn them green as harmful emissions are our global issue. Make fossil fuels truly green should be their big challenge. The reward for green hydrogen in systems and fuel delivery is the twin challenges of Electrolyzers and CCUS to deliver. Green energy is the fuel of the future in its many possible final forms and that needs to become the new fuel/ energy standard.

I think there were not two sides, just healthy knowledgeable exchanges on who represented what (green vs blue) but the recognition to ensure Hydrogen does actually happen and become the new energy fuel to replace fossil fuels both need to be in the equation. No one disagreed on this, the discussion was time for scaling and delivering clean hydrogen has to happen today.

There is a need for both blue and green but it is the positioning of which is the one to lead or lag?

A final aspect of this panel was the contributions of Badr Al-Olama, Executive Director Aerospace for Mubadla Investment Company. He delivered constantly the 30,000-foot perspectives among them with a reminder that the Millennials are impatient and that gave the combined voice of all panelists of their shared commitment of “let’s do it” He was striving to keep focusing on the bigger picture in his contributions, which I personally liked.

The final session was the fireside chat with the CEO of Siemens Energy.

We are in the throws of a decarbonizing world, the transformation agenda is specific by country or energy issue. The boundary conditions need changing to accelerate the environment to be climate aware and regulated.

Siemens positioning is presently more of the broad diverse provider of a wide range of energy solutions, they are committed to driving their part of the energy change needed. They are pitching themselves as the interim solution provider to allow the future to take further shape before their portfolio will be further calibrated

The need is for traded value immediately (I liked that) built on solid business use cases with the energy transition requiring market-driven mechanisms in policy and regulatory change. The view of the CEO also stressed the need for the (financial) market to drive change and deliver the funding for the decarbonized world we are all expecting and requiring.

My conclusions on the three days

Such a lot to process and synthesis, all gained in my the ability to be virtually connected. Having not to travel was a huge benefit for me.

Siemens put together a well thought through range of panelists around the three big topics of Transformation, Innovation, and Sustainability in manageable, bite-sized chunks of the Energy Transition.

From my side, just a big thank you to #SiemensEnergyME for hosting this. It is planned as a yearly feature, I can eagerly await from the quality of each of these sessions to knowing this is time well spent.

Thanks, Siemens Energy. and the #SiemensEnergyME team

Discussions

Rao Konidena's picture
Rao Konidena on Oct 23, 2020

I wonder if its energy transition or energy transformation?

Energy transition implies we are transitioning from fossil fuels to non-fossils such as renewables. Which is true. Some say natural gas is the bridge in this energy transition, some are actually skipping this bridge and going directly to solar.

Energy transformation, on the other hand, we are starting to acknowledge the entire energy ecosystem is transforming from station power to more distributed generation, we are paying attention to carbon pricing, we are keeping equity at the core of the transformation, and making sure this energy transformation is working for all of us.

We are transforming the way we are thinking about energy. We can produce energy at the same place we are consuming. Thoughts??

Matt Chester's picture
Matt Chester on Oct 23, 2020

I really like that framing, Rao-- and I'm surprised I haven't come across it before. Transition assumes we're moving linearly from Point A to Point B, whereas transformation more wholly captures that the entire energy system-- from generation to transmission to end use-- is being upended and will look completely new in the coming decades. I think transforming is more reflective of that future we all see-- of prosumers, of non-utility scale generation and storage, and more. 

Paul Hobcraft's picture
Paul Hobcraft on Oct 24, 2020

Rao, I do like your definitions. We have adopted "energy transition" as the catch-all but "energy transformation" does take the broader view we all must take

It is the entire change and announcing a project as energy transition limits it (nicely) but justifying energy transformation is a whole lot bigger in aspiration and scope.

Thanks for your definitions.

Rao Konidena's picture
Rao Konidena on Oct 24, 2020

Matt & Paul,

My guru in helping me think about energy transformation rather than energy transition is Ever Green Energy's CEO Ken Smith.

Ever Green Energy is helping transform the energy industry with a focus on the healthcare and higher education sectors.

Full disclosure - I am on the Board of Ever Green Energy. Based in St Paul, Minnesota.

As you may recall Minneapolis is at the center of equity concerns due to the recent George Floyd killing. We, in the energy industry, should pay close attention and do our part in ensuring energy transformation works for all income categories. Otherwise, we risk increasing the gap between people who have income and who doesn't.

And that brings me back to where I spend time thinking about distributed energy resources. I am convinced as more DERs attach to the transmission and distribution grid, we can reduce the overall cost of energy delivered.

Rick Engebretson's picture
Rick Engebretson on Oct 26, 2020

Rao, I'm interested in what directions you are thinking in St. Paul, MN. I grew up there, and was there in Lowertown when one of your operations, "District Heating," was starting up. There is a nice picture of the plant that includes the former NWBell Tel. (now Century Link) building (where I was an armed guard in the 1970s and saw the copper spaghetti communications grid). My daughter was married at the JJHill Library, also shown. And the nearby Xcel Energy Center and Science Museum had a great biomass info plaza.

I left some fingerprints on the internet, forest management, agriculture, energy. I don't want to touch the radioactive politics anymore. Much like planting a tree, it's just nice to know how it's growing after a few years.

One reminder is how big a military target the current electric grid is. There is a lot more than climate to consider.

Paul Hobcraft's picture

Thank Paul for the Post!

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