We must strike the right balance, says CEO at WEC Congress
The power sector needs to juggle reliability, sustainability and affordability, says Dr Suess
Dr Michael Suess, a member of Siemens board, and chief executive of Siemens’ Energy Sector, talks to WEC Congress News
How are we going to decarbonise?
Global power demand is set to rise by more than half of its current level between now and 2030. If new power plants are added along familiar lines as in the past, associated carbon dioxide (CO2) emissions are likely to increase by a quarter. This development could be curbed if coal-fired power plants were replaced on a wide scale with gas-fuelled power plants by 2030.
In that case, CO2 emissions in the power sector would even drop by 5% compared to today’s levels. Of course, this should only be done where it makes economic sense and with the right sense of proportion. The balance between sustainability, reliability and affordability always needs to be kept.
Can today’s markets and technology live up to the decarbonising challenge? Where is further growth/action/innovation needed?
The answer is both yes and no. Yes – because we already have the technologies at hand for ensuring climate-friendly power supplies around the globe in an affordable, reliable manner. There are highly efficient gas turbines, large wind turbines, transmission technology, distribution technology and many more. And the industry continues to work on further innovation.
No – because there’s practically no country with a market design which fosters an energy triad of economic efficiency, supply security and sustainability. Most markets are overregulated. In addition, there are no transnational energy markets that would foster the free flow of investments into an optimal technology mix. International co-ordination is lacking, for developing generating capacities, for example, for grid harmonisation or supporting innovations. This is definitely a field for action.
What are the prospects for energy storage?
One of the distinctive characteristics of the electric power sector is that the amount of electricity that can be generated is relatively fixed over short periods of time, although demand for electricity fluctuates throughout the day. Developing technology to store electrical energy so it can be available to meet demand whenever needed would represent a major breakthrough in electricity transmission and distribution.
Do you see any signs of technological breakthroughs that will make energy storage more commercially viable? What about the effect of renewable energy?
We believe energy storage will make economic sense if more and more renewable power comes on-line and depresses power prices during peak supply times, a trend we may already witness this year. We are currently testing the technology with customers, and it’s at the brink of being commercially viable.
What is the outlook for carbon capture and storage?
As hydrocarbons remain the main source of energy for generations to come, carbon capture, utilisation and storage plays a major role in order to achieve climate protection targets. Siemens’ solutions for carbon capture are: scrubbing CO2 from the flue gas of fossil-fired power plants (post-combustion carbon capture) as well as concepts and technologies for fuel gasifiers and power production linked with capturing carbon from the synthesis gas before its combustion (pre-combustion carbon capture). We certainly see good prospects for this technology.
And what about the outlook for renewable energy globally?
Renewable energies will have a share of 26% of new installations by 2030. Wind energy will be the backbone of this, representing 16% of the new installations alone. Thus, wind technology offers outstanding business prospects and it will play a substantial role in building up a clean electricity supply around the globe.
What are the key challenges for expanding wind energy? And do you see any future role for subsidies?
The wind sector is challenged by declining political support and regulatory uncertainty as rising electricity prices generate great concerns in many markets. However, the industry has understood that it must bring costs for wind power down and needs to become independent from subsidies. Cost reductions are already under way. Together with highly-efficient combined-cycle power plants, wind power can play a key role in building and expanding a sustainable, reliable and affordable power system for tomorrow.