There has been a paradigm shift towards energy transition. Siemens’ innovative technologies, extensive global expertise coupled with local know-how and an ambitious goal to decarbonise energy systems are all central to its efforts to be a partner in the Indian energy transition. The company’s long-term outlook is about optimising asset performance through digitalisation, improving the supply chain with additive manufacturing, protecting assets through cybersecurity and setting up application centres for co-creation and collaboration. Excerpts from a recent interview with Gerd Deusser, Head, Energy, Siemens India…
What are your views on the current state of the power sector in the country? What is your assessment of the Union Budget 2022-23 for the power sector? Has the budget adequately addressed the industry’s concerns?
The Indian power sector, one of the most diversified in the world, is going through a technology-led transition in the last two to three years. The Government’s focus on the National Infrastructure Pipeline (NIP) through Gati Shakti acknowledges the power sector to be a crucial growth engine for industry and the economy, and the overall welfare of the citizens of the country.
The sector itself is driven by the desire to restrict global warming to 1.5 degrees Celsius and thus the commitments by India to COP26. Net zero by 2070, 500 GW renewable addition by 2030 and saving of 1 gigatonne CO2 will make renewables outgrow coal by around 2024. Such massive shift requires not only the installation of wind and solar projects but measures to stabilise the grid and shift power during the day. In this regard we see a tipping point approaching as the government announced the National Hydrogen Mission.
The supply side is supported by the cost of renewable power at source and production linked incentive (PLI) schemes to support indigenised production of the related equipment. The demand side is supported by policy advocacy which might lead – in the absence of a carbon tax – to blending mandates potentially starting with such sectors which emit CO2 the most, e.g. refineries and fertiliser. Increased use of digital solutions to improve the efficiency and performance of assets, further policy reforms for electrification, implementation of smart grids and green energy will further support these developments.
The Union Budget supports all these measures. However, in terms of power sector it is very much leveraged to photovoltaic (PV) as generation and electric vehicles (EV), which will create further demand.
In addition, the first part of the Hydrogen Policy by the Ministry of Power (MoP) was floated on February 17, 2022 and provides further clarity on the supply side via elaboration on renewable generation costs. The second part is expected to talk about blending mandates which then provide guidance on the demand side.
What are the new and emerging technologies in the power transmission and distribution segments?
There has been a paradigm shift towards energy transition and this requires a long-term strategic approach to maximise the value of the entire energy chain. Sharing some of the technologies and trends which can make a positive impact to the power eco-system.
- Transition from coal to gas: CO2emissions can be drastically reduced by using gas to power the boiler of a conventional steam power plant instead of burning coal. Converting old steam power plants into highly efficient combined-cycle plants can achieve consistent climate stabilisation objectives for the next 50–100 years. This technology can be applied as bridging technology to support the move towards renewables.
- Supporting end-to-end hydrogen value chain: Entire power-to-x value chain with end-to-end solutions provides an integrated approach to solving complex problems. Expert competencies assist global services and hydrogen solutions to contribute towards successful projects across the energy market. These solutions are innovative gas turbines, hydrogen production via PEM electrolysers, and the Omnivise Hybrid Control solution for microgrids and Hybrid Power Plants. This technology can be applied to store energy and thus support power shift during the day and at the same time drastically reduces carbon emissions.
- H₂ gas turbines: Technology innovations in burner design and fuel staging, increase gas turbines’ capacity to store more hydrogen. The low-NOx gas turbines can now produce power from low-carbon fuels such as hydrogen, leveraging natural gas and infrastructure resources minimising CO₂ emissions.
- Grid stabilisation via voltage, frequency support and load flow control: The power systems using fluctuating renewable energy sources can be stabilised using different measures. Unified Power Flow Controller (UPFC PLUS) expands the options for grid stabilisation, enabling a balance load flow in the alternating-current grid within milliseconds.
- Battery storage: Battery energy storage system (BESS) is an important technology option that serves as an ideal backup for an instant power supply. Hybrid solutions available today are now enhancing fossil and renewable power generation capabilities with the integration of BESS. Such hybrid solutions provide instantaneous, reliable, and sustainable energy and are integrating a large proportion of variable renewable energy (VRE) into large power grids.
- Thermal storage integration: Electric thermal energy storage (ETES) can store surplus energy in the form of heat, which can be used for various applications like re-electrification, process heat, and others. ETES electricity is driven from the power grid, which is used to heat volcanic stones to 600°C or higher temperatures. By using a conventional steam turbine, the heat can then be converted to electricity. The system is built on 80 per cent off-the-shelf components and can work independently. The added benefits can be added to an existing heat cycle or convert a thermal power plant into a storage plant.
What have been the operational and financial highlights of Siemens in the last one-two years?
Siemens’ energy business helps customers to meet the growing demand for energy while transitioning to a more sustainable eco-system. Its innovative technologies, extensive global expertise coupled with local know-how and an ambitious goal to decarbonise energy systems are all central to its efforts to be the partner and driver of the Indian energy transition. The business’ top focus areas are innovation, decarbonisation, digitalisation and transition towards reliable energy systems. It has a comprehensive portfolio for oil and gas, utilities, independent power producers, engineering, procurement, and construction companies (EPCs), transmission system operators, and industrial companies in sectors such as mining and chemicals. It supports the entire energy value chain, enabling it through accelerated collaboration and co-creation as well as the strengthened collective knowhow of its people.
Recent successes stand testimony to our commitment to provide the most innovative and cutting-edge technologies for the industry.
For reference, (1) we commissioned India’s first HVDC link featuring state-of-the-art voltage-sourced converter technology. The 2,000 MW electricity transmission system, consisting of two links between Pugalur in the state of Tamil Nadu and Thrissur in Kerala, supports Power Grid Corporation of India Limited (PGCIL) to counter power deficit in India’s southern region and improve the grid stability.
(2) We also enabled PGCIL to integrate 8.1 GW renewables power installations at Bikaner, Fatehgarh, Bhadla into the grid. This was only possible with our market leading STATCOM technology.
(3) Our waste heat recover (WHR) technology enables one of the biggest cement producers in India (ACC) to massively reduce their carbon footprint. We supply such technology to their Ametha plant.
(4) In addition, India’s largest and most advanced shipbuilder Cochin Shipyard Limited selected Siemens to implement advanced marine solutions for India’s first fleet of 23 boats equipped with electric propulsion and battery integrated technology.
What are the biggest issues and challenges facing the company and how are these being addressed?
While the Government of India announced the National Infrastructure Pipeline in the previous year, it announced further measures to encourage inflow of foreign direct investment (FDI) in the power sector as well as for helping power distribution companies to improve operational efficiencies (Revamped Distribution Sector Scheme). These developments will require capacity expansion, grid stability as well as new technologies around digitalisation, decentralisation and decarbonisation. As India’s economy continues on the post-pandemic recovery path, the demand for sustainable, reliable, and affordable energy will also rise in parallel.
What are Siemens’ future plans and planned capex? What is the company’s long-term outlook for the power sector?
Indian power sector is undergoing a significant change that has redefined the industry outlook. Sustained economic growth continues to drive electricity demand in India. The Government of India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country. From installing technologies to optimising asset performance through digitalisation, improving the supply chain with additive manufacturing, protecting assets through cybersecurity and setting up application centres for co-creation and collaboration, Siemens has been at the forefront of bringing state-of-the-art technologies to support this energy transition. We are also committed to deliver decentralised and flexible power, manage the complexities of the grid, improve and de-risk aging assets, and connect supply and demand through storage technologies such as grid-scale batteries and Power-to-X technologies.
Having seen the benefits of the initial efforts towards decarbonisation, digitalisation and decentralisation we are confident that the adoption of cutting-edge technologies and sustainable approaches will gain further ground.