Karim Amin of Siemens Energy talks exclusively to Kelvin Ross.
“It starts with identifying who you are and not protecting the past ” and that is a matter of mindset,” says Karim Amin.
He’s talking about the transition of Siemens Energy, of which he is executive vice-president of generation, yet it strikes me that Amin could equally be talking about the way the various sectors within the energy industry ” and indeed the whole industry itself ” are evolving.
“For me and for my colleagues, we are clear. We don’t identify ourselves with a specific product. We identify ourselves with an outcome.
“We are in the energy business, and the energy business had certain fundamentals in the past: there were ways of working and these ways are changingà¢€¦ and we will change.
“I think the real issue here is that it has to happen over time ” you cannot do it overnight. We are moving towards this by a number of steps and firstly, we are investing and innovating in the solutions of the future.”
Siemens Energy is the independent spin-off from Siemens AG created last April and listed on the Frankfurt Stock Exchange in September. The company encompasses all forms of gas and renewable power generation, transmission and their associated technologies.
Amin talked about “identifying ourselves with an outcome”: so what is that outcome?
“Siemens Energy’s objective is to be leading the transformation of the energy system: taking it from being pretty much entrenched in fossil and CO2 technologies today, to the energy system of tomorrow that really caters for sustainable, affordable and reliable energyà¢€¦ that is also carbon free.”
He stresses that while this is a journey, it must be seen as “a customised journey”.
“Nobody has the ultimate answer of what the shortest path is from point A to point B. When you look at utilities, large scale power producers or industrial applications, I think there is an individual journey that needs to be carved out and developed for every group of customers or geographies.”
This, he says, is the key strategy of Siemens Energy: “We want to be the partner of choice by having a palette of technologies, business models, and also ideas that can be assembled and customised, leading the transformation journey towards decarbonisation.”
So we’re talking bespoke rather than one size fits-all? “Exactly,” he says, “and it’s also different not just in regions, but depending on the application.”
To illustrate this, he explains: “A couple of days ago, I was visiting one of the major smelters in the Middle East, and they have a specific industrial process. And the decarbonisation of this industrial process is completely different from that of petrochemical. And it’s completely different from food and beverage. Yet they all have CO2 reduction targets.
“That’s what I mean by ‘it’s individual’. It’s really getting into discussions about what matters to a specific industry and how you use existing assets and existing setups that they have to decarbonise. In many cases, it’s step by step. But in some cases, also, there are radical changes.” However, he emphasises that the ‘key pillars’ of any solution remain the same: “It needs to be sustainable ” absolutely. It needs to be affordable. And it needs to be reliable. These are the cornerstones of these individualised journeys.”
So what does this mean for a company like Siemens Energy which for many is synonymous with the gas turbines?
“The future of the large gas turbine is not going to be as in the pastà¢€¦ and for us in Siemens Energy that’s okay. Because we are not, per se, in the gas turbine business ” we are in the power generation business. And that’s what really matters.
“Before gas turbines, we were doing steam turbines, and tomorrow we will be doing more hybrid solutions and systems.”
I wonder what he sees as the key enabling technologies to get to a decarbonised energy system?
“Storage is the game changer. And storage comes in different shapes and forms. Electrical storage, using batteries, is a matter of industrialisation scale, having really reliable technology that could store large amounts of electricity at reliable and affordable prices.
“So here’s it’s about how to industrialise that and reach the economies of scale and the maturity of the technology.
“Then you have other forms of storage ” chemical storage, for example, like hydrogen ” and that’s a completely different economy. Here you’re talking about the feedstock supply chain cost of green hydrogen. Because what matters is that it is ‘green’: it has to have less impact on the environment versus the hydrogen that you get from hydrocarbons. And there is a delta between the two costs ” green hydrogen is still too expensive.”
But in terms of bringing down the cost of green hydrogen, he is confident that “we will get there”.
“If you see how the prices of batteries, wind parks and solar PV have performed over the past 10 years, even five years, it’s impressive. And I think we are on the same projectile for hydrogen.
“The questions are: How fast will this happen? And what are the elements that would help to really accelerate this?”
So having posed the questionà¢€¦ what are these elements? “I think the most important two things are the regulation and the carbon pricing ” the technology itself will follow. I don’t think the technology is the bottleneck. CO2 pricing would make green hydrogen feasible if government regulations point the industry towards that.
“I think these two elements would take us immediately to the next level faster than we think.”
He says hydrogen “needs to be decoded and the formula needs to work. Everybody’s busy right now with finding the best way of doing it”.
Hydrogen is also an example of what Amin earlier described as “investing and innovating in the solutions of the future”.
“We invest a lot in the electrolyser ” the unit that produces hydrogen. That’s one integral part of our portfolio. We focus on: How can we do this more cheaply? How can we scale it up? How can we go to the levels needed for commercialisation?”
I’m talking to Amin on a video call ” one of the ‘new normals’ of pandemic communications ” and he has found the past 12 months valuable as a reminder of the importance of electricity.
“One of my lessons learned during the lockdown periods, when people in some countries were shut away in their homes and aircraft were grounded, was that hospitals still needed to run, critical infrastructure needed to run, and this made electricity supply, generation and transmission so critical.
“In many, many countries we got permission for our engineers to cross borders and travel so that they could keep running the power plants that feed hospitals. I think this was a very powerful message and made many of us understand better than ever before what this industry and its workers really mean for society. And I think we should take this as an important learning as we go into 2021.”
I ask if he believes that the pandemic will accelerate a green energy transition.
He thinks that perhaps it will, not least because “there are many stimulus packages and they are all connected to environmentally-friendly technologies”. However, he thinks a greater driver already exists: “I think the pressure from society now puts a burden and a task on all of us. Even at home, I have two young girls and they are so switched on to these topics.
They don’t ask me: ‘How do you build a power plant’. They ask me: ‘How is the power plant that you’re building better for the environment?’ There’s a consciousness about the environment among the next generation that is so high that I think it will work its magic.”
And to help that magic along, Amin likes to turn on its head the old adage that ‘seeing is believing’.
“With certain things, you need to believe them before you are able to see them. We need to start to believe in a different world. Then we will be able to see the path.”