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Episode #57: Decarbonizing the Industrial Sector & Distribution of Energy Production with Hans Holmström of Siemens Energy [an Energy Central Power Perspectives™ Podcast]

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The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. Each two weeks we’ll connect with an Energy Central Power Industry Network...

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The global efforts to decarbonize require an all-hands-on-deck approach across the economy, with one of the toughest areas to tackle remaining the industrial sector. The production of cement, glass, steel, and other key materials all require dispatchable, reliable, affordable energy. At the same time, the prospect of rapidly having to rely solely on renewables like solar or wind is a daunting prospect.

But there is a way. Today’s guest on the Energy Central Power Perspectives Podcast emphasizes the importance of taking a stepwise approach to meeting the zero-carbon energy future, one that will embrace renewables as well as hydrogen, hydropower, efficient gas turbines, and much more. 

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This episode features an in-depth conversation with Hans Holmström, the VP of the Industrial Gas Turbine Business within Siemens Energy, as he shares his insights from the front row seat he has during this complex and massive transformation taking place across the industrial and energy sectors. Balancing the importance of saving the world via low carbon and zero carbon solutions with a recognition that proposed solutions must work in the real-world environment, Hans provides podcast host Jason Price and producer Matt Chester with the background education on of why we should all be feeling more optimistic and hopeful about our decarbonized future. 

A special thanks to Siemens Energy for supporting this edition of the Energy Central Power Perspectives Podcast. 

Prefer to Read vs. Listening? Scroll Down to Read Transcript.

 

Key Links

Hans Holmström’s Energy Central Profile: https://energycentral.com/member/profile/hans-holmstrom

Siemens Energy on Energy Central: https://energycentral.com/o/siemens-energy

Zero Emission Hydrogen Turbine Center: https://www.siemens-energy.com/global/en/priorities/future-technologies/hydrogen/zehtc.html

Did you know? The Energy Central Power Perspectives Podcast has been identified as one of the industry's 'Top 25 Energy Podcasts': https://blog.feedspot.com/energy_podcasts/

 

Transcript

Jason Price:
Hello, and welcome to this week's episode of the Energy Central Power Perspectives podcast. In this show, we strive to bring your diverse topics impact in the utility professional today as brought to you by the thought leaders who are shaping the power sector of tomorrow. I'm your host, Jason Price of West Monroe, coming to you from New York City. And with me in Orlando, Florida is Energy Essentials' community manager, and podcast producer, Matt Chester. Matt, I'm glad we're diving into a number of the most pressing and top of mind topics facing utility leaders today. I think today's episode will be no exception.

Matt Chester:
You're right about that, Jason, it's definitely going to be another highlight episode for sure.

Jason Price:
Fantastic. So let's get started. The energy industry is at a crossroads, but it's not just restricted to utilities themselves. It's the energy consumers and the grid operators and the carbon emitters. We're facing the existential crisis of decarbonizing the economy broadly, and to do so will undoubtedly require complete buy-in to move the technological, regulatory market base and even customer choices where they need to go. This topic is one that can get overwhelming and without clear direction, it can feel like there's simply too much to tackle. Luckily, the Energy Central community is always bringing together the thought leaders of the day who are shepherding in the needed changes and who can explain to us what needs to happen and where our focus should be. Today in the podcast, we have just such a guest. Joining us in the virtual podcast booth, all the way from his office in the C-suite of Siemens Energy. But before we introduce him, let's give a big thanks to Siemens Energy from making today's episode possible. Siemens Energy is one of the world's leading energy technology companies. The company works with its customers and partners on energy systems for the future.

Jason Price:
That's supporting the transition to a more sustainable world. With its portfolio products, solutions and services, Siemens Energy covers almost the entire energy value chain, power generation and transmission to storage. And with us from Siemens Energy is the VP of the industrial gas turbine business, Hans Holmstrom. Hans has been at the helm of Siemens Energy for just about a decade. Having before that spent over 30 years honing his knowledge of grid technology and the utility sector at ABB. Hans is a recognized leader in the energy technology space across the globe, and we couldn't be more honored to have him on the podcast today. And he is no doubt a busy man given the range of topics he's charged with solving. So let's get started. Hans Holmstrom, welcome today's episode of Energy Essentials Power Perspectives Podcast.

Hans Holmström:
Many thanks for that. I'm honored to be here.

Jason Price:
Hans, you've spent a lot of time in the north of Sweden, close to nature and surrounded by plenty of hydro power. Does that influence how you see the energy business?

Hans Holmström:
Yeah, it certainly does. I think I learned very early in my career that all countries and regions are different. There is no one size energy solution that fits all. And the other thing I've learned is that hydro power is a wet dream as it were for many people in the power sector. It has a lot of very good aspects to it. For instance, you can start and stop it with very short notice. That's what I've learned very early in my career. The other thing of course, if you look at the country of Sweden, it's very long, it's a little bit like California and all the power in the old days used to be generated up north, but all the loads and all the people were down south.

Hans Holmström:
So a lot of power lines are crossing the country from north to south. And of course that is not optimal. Especially in today's day and age, you don't want to have unnecessary losses in the transmission network. And also if you want to build new transmission lines, it takes a long permitting process. And in some cases, it's not even possible to build new transmission lines. And especially now when we see rapid growth of solar power and wind power, it puts totally different aspects and challenges to how we build our grids in all regions of the world, actually.

Jason Price:
So Hans before we dive huge power deep into the conversation, give us a sort of an overview of the power sector from your perspective, what it's like, perspective from Sweden.

Hans Holmström:
Yeah, sure. I've been in the power industry, in different parts of power industry for quite a few decades now. And I have to say that personally, it's never been so interesting as it is at the moment. I mean the power industry is the place to be. It's on everybody's agenda. You hear and read about it every day in newspapers and in media, and so many things are happening. And of course, for a lot of industries and for a lot of actors in the power industry, the uncertainty could make you nervous. I think for me personally, it adds a lot of value. The power industry is the place to be right now, for many reasons. The business is really, let's say, booming because of all the changes that we've seen, but also, we have an important role to play here. I don't want to put two big words into my own mouth, but saving a planet is not a bad thing to work with.

Jason Price:
Let's talk for a moment about generation, particularly fossil fuels. So gas and oil are dispatchable and flexible, as is coal. And countries and industry rely on this. Since industry looks to companies like Siemens Energy for solutions, and you are pushing a decarbonized feature, how do you and your clients work through all this?

Hans Holmström:
There are many, many actors in this field, obviously. Although power utilities have a share of about 40% in the global CO2 emissions, we see an increasing speed in decarbonizing also the industrial sector. It's becoming more and more important. Industrial companies know this and it changes their thinking, and they need to change their focus when it comes to electricity and heat generation. They are picking up pace and they're doing that, not only because of regulatory changes, but also because the public pressure is out there. If they want to sell their goods, if they want to employ good people, they need to show a path towards the future, which is combined with decarbonization. And all of this helps us when we talk to our customers about implementing a decarbonized set of technologies. We don't have to do all the selling. That's done by many other actors in the field like public opinion. The challenge is of course companies that are early adopters of decarbonized technologies, they see that that is normally a bit more expensive than the traditional energy generation technologies.

Hans Holmström:
So there needs to be legislation that puts actors in industrial area on an even field, even playing field. Political leaders have to make that happen, that's their task. Otherwise, you end up with an A team and a B team where the B team is not spending any money on decarbonization and the A team is doing it, but they're doing it at a higher cost, thus losing profit in their operation. Also, it requires the stepwise approach. We hear a lot in the media and the debate today that people want to go from the old way of generating electricity and heat to a completely new way of decarbonizing, but I claim this needs to be done stepwise. You can't leave all the existing assets as dead assets. They have to be, some of them at least, brought into the future and we have the technology and IDs to do that.

Jason Price:
Okay. So the stepwise approach, maybe you can elaborate on that for our audience.

Hans Holmström:
For instance, there are tens of thousands of gas, fire, power plants out there with gas turbines in them. Some of them come from Siemens Energy and some of them come from our competitors. At least ours can be turned into accepting more and more fossil free fuels like hydrogen and biofuels over time when they become available. And we're not talking about huge investments here. We're talking about smaller changes to the fuel system, of course, but also to the combustion system in the gas terminal. And this is a path that we're trying to show to our customers, that they can keep their assets, they can upgrade them and they can take part in this decarbonization race.

Hans Holmström:
Some customers, of course many, have coal fire power today and we all know that coal fire power is among the worst CO2 emitters in the energy land. By turning from coal fire to firing gas, and maybe even initially natural gas, you open up a path to the future that when you can mix the natural gas more and more for CO2 reductions, like again, hydrogen biofuel. I believe that for a long time, there will be rotating equipment dominating the power generation industry. Again, if we can help our customers to bring those assets into the future whilst decarbonizing, I think we're doing a good thing.

Jason Price:
Well, that's interesting. So tell us more about how your industrial customers are engaging with these ideas.

Hans Holmström:
Well, again, as I said before, public opinion, and also to a growing extent, the legislation, is pushing our industrial customers into this direction. It's actually a big topic for them. And we already start to see some early adopters of, for instance, green steel. Green steel is when you produce steel without emitting too much CO2. We already see, for instance, the auto industry producing cars that are made out of green steel. And they do that because they want to claim a position as a leader in the decarbonized society. Of course today, the volumes of produced green steel, it's very small, but there's already a market out there trying to lay their hands on that little amount of green steel so they can show some early steps in the right direction. And they're doing it again for reputational reasons. If you can claim a stake at being the leader and you can maintain that, it's easier to sell your stuff, of course, to a certain part of the public, but also it's easier to hire the right skilled people into your company. So there's a lot of advantages that they're looking for.

Matt Chester:
And Hans, you mentioned the steel industry and the automobile industry. Kind of leads me to wonder, are these considerations different based on which type of industrial customer you're dealing with? Don't steal and cement, for example, have different energy needs so the solutions might look different between them?

Hans Holmström:
They absolutely do, and you're mentioning two industries that are really heavy industries. They've been there for a long time, they're used to use CO2 emitting technology. For the cement industry and the steel industry, I would say, the challenges are higher than for most other. You start already to see some movement there. And again, we see the early doctors making their bets now.

Jason Price:
Hans, can we take a one step further? Steel and cement is an industrial need. What about glass? Glass plays an important role as well.

Hans Holmström:
Absolutely. And everything that includes heating up a material will need a lot of energy. And I think we often talk about electricity generation, but equally important for many industrial sectors and including glass of course, is the need for heat. High grade heat. Again, this is something that we can produce in our gas fired power plants, both electricity and heat with the mix that the customers need. So again, let's not forget heat and the need for that in industrial process.

Jason Price:
You mentioned earlier the regulations and regulators. So can you describe to our audience, who's primarily more North American, what the regulatory environment is and what you're seeing and facing in the European regulatory sphere?

Hans Holmström:
Overseeing in Europe is increasing talks and implementation of CO2 emission permits. That has been tried before, but it turned out that there were too many permits issued so it didn't really at the end lead to too much CO2 emission reduction. This time around, they're really trying to limit the amount of CO2 emission permits on the market, and over time also reduce the volume of those permits, thus forcing the price up of those permits, which means that if you want to emit CO2, it's going to be more and more expensive over time. That's the way it's going. And personally, I believe that that is necessary if you really want to have a change in the way that you produce your energy.

Jason Price:
That's very helpful, Hans. Okay. So what is needed to make this a reality?

Hans Holmström:
I think again, we talked about the regulations and rules and the lawmakers. That's very important so we don't end up with an A and a B team in the industry. The other thing is that we, representing the power equipment industry, actually use the experience that we get from all over the world, I mean, we're a truly global company. We see how people implement these kind of energy generation IDs differently in different parts of the world. And we have a task to spread those experiences to other regions in the world. Of course also, we are to a large extent in the same situation as our customers. We have delivered equipment for hundreds of years.

Hans Holmström:
We have an installed base out there with our customers that we're servicing and maintaining so we need to show the path forward, how can you with the most optimal investment, bring that equipment into the future? By implementing those solutions also in our own operations, we can show the way. And this is why we are in one of our gas turbine plants actually implementing a little mini micro grid for generating hydrogen from solar panels. Trying to take our customers by the hand and lead them into the future, showing what this could look like in the future.

Jason Price:
All right, fantastic. So you're talking about projects, micro grids, hydrogen, and other sorts of projects. Can you dig a little bit deeper on this? Can you give us some more details on this project?

Hans Holmström:
Yeah, sure. A couple of years ago when we started to see that this was really moving, when I said this I mean decarbonization focus, we said, "Why don't we make use of the turbine test facility that we have in one of our plants and build a bit of an experimental plant there. Let's put up solar panels. Let's get one of the electrolyzers there to generate hydrogen from electricity. Let's make use of the waste energy we generate when we test our turbines. Let's see how we can store the hydrogen that we generate and how we can mix that back into the turbine fuel and we test them."

Hans Holmström:
Which we went and did. And we're now doing this in corporation with two European universities and we're getting sponsorship by governments, et cetera. The whole idea about this little micro grid solution is to learn. Both that we learn ourselves, but also that we bring in customers and other actors in the energy field to experiment on these kind of aspects. These challenges are quite new to many, actually most customers. And we believe that by having this experimental setup, we can play around with many of the aspects of this new energy landscape. So I hope we get a lot out of this pilot program.

Jason Price:
Yeah. And then hydrogen, of course there's green hydrogen, blue hydrogen, black hydrogen, there's many different variations. And I think we can all agree that green hydrogen produced by renewables is the optimal goal that we all want to sort of achieve, right? The blue hydrogen is produced from natural gas and most likely will continue to play a role over the coming years. Is that accurate and how do you see that playing out?

Hans Holmström:
Well, that's a very good point and thanks for bringing that up because there's a lot of hyper on hydrogen at the moment. If you read new newspapers and listen to the news, there these IDs everywhere of how to use hydrogen as a fuel. Now, the fact of the matter is that the expansion of renewables is not fast enough, reduce all the needed hydrogen for all these IDs and needs. Personally, I believe that oil and gas companies play an important here. They have access to gas wells. By producing blue hydrogen out of natural gas, I think they can play an important role in bridging the increased need for hydrogen to get the hydrogen economy really up and running. Again, it's of course the bridging strategy, but I think it will be needed for decades if we are to be able to get our hands on enough volumes of hydrogen.

Jason Price:
Tell us more about industrial generation. Do you also see a trend towards more and more distributed energy production for this audience?

Hans Holmström:
That trend has been there for a long time, actually for many decades. If you go back to when many of the early power systems were built, especially maybe in the Western world, they were centralized. There was big coal fire power plants, and then a lot of transmission lines and distribution lines out to the consumers, or they were big hydro power plants, again with long transmission lines. What we've seen for at least two decades now is definitely trend towards distributed power generation more than centralized. The reason I think we see that is that first of all, this multi billion dollar project, that it means to build a big hydro dam or big new coal fire facility is not necessary when you do distribute the power generation. Also, mere fact that we see renewables popping up everywhere is by definition distribute, both wind and solar power are distributed power generation facilities.

Hans Holmström:
And of course there are many aspects here. One is that if you have, for instance, a gas fire power plant, you will have heat as a byproduct. And if you do that, the right amount you can make use of that heat in industrial processes, or maybe in district heating or grids, particularly in Europe, Northern Europe, if you have a huge, for instance, coal fire power plant, you might not have an offtake for all the heat that you generate. Losses and efficiency increases with the distributed power generation in contradiction to the old school, which was losses will go down if you have a big central power plant.

Jason Price:
From what I can tell, we've only been talking for about 20 minutes and I feel like we could spend another 120 minutes just talking about all these topics. So this has been really a rich conversation. The future in this space sure looks bright, and we're so excited to hear about all the ways that you and your team at Siemens Energy are bringing that future into reality. I also hope you'll continue to keep in touch with the energy central community, keep us up to date on new developments as they come with future posts and more publications that come out of Siemens on the Energy Central platform. But for now, we want to thank you for joining us today.

Hans Holmström:
Thank you very much. It's been a pleasure.

Jason Price:
You can always reach Hans through the Energy Central platform where he welcomes your questions and comments. And on behalf of the entire Energy Central team, thanks to everyone for listening today. Once again, I'm your host, Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at energycentral.com. and we'll see you next time at the Energy Central Power Perspectives Podcast.

 


About Energy Central Podcasts

The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. At least twice monthly, we connect with an Energy Central Power Industry Network community member to discuss compelling topics that impact professionals who work in the power industry. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

The ‘Energy Central Power Perspectives™ Podcast’ is the premiere podcast series from Energy Central, a Power Industry Network of Communities built specifically for professionals in the electric power industry and a place where professionals can share, learn, and connect in a collaborative environment. Supported by leading industry organizations, our mission is to help global power industry professionals work better. Since 1995, we’ve been a trusted news and information source for professionals working in the power industry, and today our managed communities are a place for lively discussions, debates, and analysis to take place. If you’re not yet a member, visit www.EnergyCentral.com to register for free and join over 200,000 of your peers working in the power industry.

The Energy Central Power Perspectives™ Podcast is hosted by Jason PriceCommunity Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

If you want to be a guest on a future episode of the Energy Central Power Perspectives™ Podcast, let us know! We’ll be pulling guests from our community members who submit engaging content that gets our community talking, and perhaps that next guest will be you! Likewise, if you see an article submitted by a fellow Energy Central community member that you’d like to see broken down in more detail in a conversation, feel free to send us a note to nominate them.  For more information, contact us at community@energycentral.com. Podcast interviews are free for Expert Members and professionals who work for a utility.  We have package offers available for solution providers and vendors. 

Happy listening, and stay tuned for our next episode! Like what you hear, have a suggestion for future episodes, or a question for our guest? Leave a note in the comments below.

All new episodes of the Energy Central Power Perspectives™ Podcast will be posted to the relevant Energy Central community group, but you can also subscribe to the podcast at all the major podcast outlets, including:


Thanks once again to Siemens Energy for making this episode possible. 

 

Discussions
Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.
Dr. Amal Khashab's picture
Dr. Amal Khashab on Nov 2, 2021

Hi Matt

(1) Congratulations on keeping this podcast readable. Will the others be readable too?

(2) The last sentences were a little bit confusing:  "Losses and efficiency increase with the distributed power generation in contradiction to the old school, which was losses will go down if you have a big central power plant." It seems to me visa versa.

 

Matt Chester's picture
Matt Chester on Nov 2, 2021

Hi Amal-- glad you enjoy the transcripted version of the podcast. We've been including transcripts in the podcast posts for the past few months, and we'll certainly continue to do so.

As for point 2, hopefully Hans can jump in and explain further!

Hans  Holmström's picture
Hans Holmström on Nov 4, 2021

Losses are significantly reduced in many distributed power plants since the exhaust heat can be used in an industry or in a district heating network. This is normally not possible in a large centralized power plant. The result is that the energy loss is much higher in a large central plant than in a small distributed plant when heat losses are taken into account.

Dr. Amal Khashab's picture
Dr. Amal Khashab on Nov 6, 2021

Hi Hans

Thanks for the clarifications. Now it sounds like a complete informative sentence talking only about losses. Misleading was due to the phrase ( losses and efficiency increase in the distributed power generation). Of course when losses decrease efficiency increases. Thanks again.

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