‘What’s Next’ for Siemens Energy?

Everyone in the power industry is familiar with Siemens Energy. Its technology is behind about one-sixth of the world’s power generation, and even a larger portion than that in the U.S.—roughly a third.

Yet, Siemens Energy as currently organized is a fairly new entity. The company was spun off from Siemens AG and began trading on the Frankfurt stock exchange on Sept. 28, 2020. When the spin-off was approved by Siemens shareholders in July that year, Joe Kaeser, president and CEO of Siemens AG, said, “The spin-off enables us to build two focused companies, both of which will be strong players in their respective sectors.”

Rich Voorberg, Siemens Energy’s president of North America, during a media call on Sept. 13 with three reporters including POWER, said, “We are a pure play energy company. So, what that means is we go from one end to the other.” He started with the company’s generation offerings, which include gas and steam turbines, generators, gas engines, distributed control systems, wind turbines, small hydro, and more, then mentioned industrial applications, and finally transmission systems that deliver electricity to end-users.

Hydrogen Technology

But Siemens Energy also has a New Energy Business, or NEB, that is focused on the future, including on research and development (R&D) of hydrogen technology. “NEB really focuses on what’s next,” Voorberg said. “And that’s probably the most exciting part of our business is what’s next—where do we go from where we are today to where we’re going to be in the future?”

“Half of the [Siemens Energy] portfolio is what we call decarbonized technologies,” Tim Holt, a member of Siemens Energy’s Executive Board, pointed out. Yet, he said, that isn’t good enough—the company wants to contribute even more to the world’s decarbonization journey—so it’s investing in the development of new technology. “We are spending about €1.2 billion each year on R&D,” he said.

“We’ve been really busy working on hydrogen,” Voorberg said. “We’re the only OEM [original equipment manufacturer] that makes turbines as well as makes equipment that produces hydrogen. So, we really say we’re the front to back. We can produce the hydrogen from our machines, we can create a solution around the gas turbine and the hydrogen—bring it all together—so that we can create a good solution for our customers to decarbonize.”

Holt suggested, however, that there may be more efficient uses for hydrogen than burning it in gas turbines. “What do you use hydrogen for as a feedstock?” he asked. “Is it going to be for power generation? Is it going to be for synfuels? Is it going to be ammonia? So, I think there’s different ways how that goes and how to use the hydrogen for what application.”

Nonetheless, Holt said developing gas turbine technology capable of burning 100% hydrogen is still important. That’s because gas turbines are designed to operate for 25 to 30 years or more, and owners don’t want to be left with stranded assets. If units can run on 100% hydrogen, there is the flexibility to continue operating the plant, even in a decarbonized world.

“I see the easy part is burning the hydrogen in the gas turbines. We said by 2025 all our industrial-size gas turbines will be 100% capable on hydrogen, and by 2030 all our units will be able to burn 100% hydrogen,” said Voorberg. “I’ve got great confidence in our engineering guys that we’ll get there. The real challenge in all this is making hydrogen at scale—making it economic. And so, that’s where a lot of the technology needs to develop is just to get that hydrogen economy growing—get the electrolyzers to become able to produce hydrogen in an economical manner.”

R&D Investments in Other Technologies

Beyond hydrogen, Siemens Energy is investing in improvements to its gas turbine technology. “We’re still doing quite a bit on gas turbines, believe it or not. You know, better efficiency upgrades to look at the installed fleet,” Holt said.

A lot of effort is also going into energy storage R&D. “We believe storage will be the game changer,” Holt said, noting that the exact technology that could revolutionize the industry is not yet decided. He said there are different options for short-term versus long-term storage, as well as maximum output systems. Lithium-ion batteries are likely to be part of the answer, but other technologies, including heat storage, could also be important. “We’re putting quite a bit of effort into it,” said Holt.

Concerning the transmission and distribution business, Siemens Energy’s R&D efforts are focusing on grid resilience and high-voltage direct-current (HVDC) systems. “How do you connect these offshore wind farms? How do you transport the electricity over long distances?” Holt asked. “On the switching side, they have SF6 [sulfur hexafluoride], which is even, I think, 20,000 times worse than CO2 [as a greenhouse gas]. How do we convert that portfolio into a clean product?”

Holt said combining technologies into hybrid solutions is another exciting clean energy option. Siemens Energy holds about a two-thirds stake of Siemens Gamesa, a leading supplier of both onshore and offshore wind power solutions. Holt suggested adding green hydrogen production to a new offshore wind turbine site offers some interesting benefits. For example, there would be no need for power transmission cables—the hydrogen produced at the site could potentially be transported via vessels. “It’s a lot on the solutions side,” he said. “How do you combine the technologies that we’re investing in, into something that is really meeting the future needs of a clean portfolio?”

Voorberg noted that Siemens Energy is also working with startup companies to help advance new technology. He said venture capitalists feed a lot of money into startups, but what they don’t often do is help develop the technology or scale up products. “We sit uniquely positioned between the startups and the customers on the other side,” said Voorberg. “We can go and talk to our customers, and say, ‘Well, you’ve got this problem. We’ve got this startup. Let’s the three of us come together and let’s look at these different opportunities.’ ”

Sometimes, Siemens Energy invests directly in the startups, while other times it simply develops a partnership with the company. “What we can do is mentor the startups and guide them,” Voorberg said. “What it does is it drives us all to a quicker decarbonized world.”

Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).

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