Toward a Predictive Model of Energy Developments

Why are researchers at Siemens addressing the transition to renewable and decentralized energy sources?

Prof. Dr.-Ing Armin Schnettler: The energy transition is a long-term, global transformation project that has neither a blueprint nor a "one size fits all" solution. In Germany, for example, it means that demand for fossil-based energy products and solutions is declining.  As a company we need the best technologies and business models for different market developments over the medium and long term and for the use of more renewables, and this is precisely what we must develop. At Corporate Technology, we are taking a strategic and long-term approach to this issue through our Energy System Development Plan (ESDP) research project. In this project, we are representing all the power supply structures of today and tomorrow – including the energy markets – in digital form, and are mapping them into complex simulation models. This puts us in a position to zero in on the right technological/economic solutions for power supply systems.

In your opinion, which major trends will characterize the energy economy over the next few years?

Schnettler: Recent developments have demonstrated that the percentage of energy generated from renewable sources will, in all probability, continue to grow as these sources become increasingly competitive. Depending on location, renewable sources are characterized by generating costs of about 6 Euro cents/kWh. Furthermore, as production continues to be industrialized and optimized, we can expect the role of renewable energy sources to claim additional market share. Over the next decade, wind and photovoltaic power will be the primary players here, although PV power may eventually lead the way to ever increasing levels of decentralization. There will of course be considerable challenges along the way in terms of energy stability and dependability.

In Europe, these developments will have significant effects on the economics of conventional power plants. Even the most modern such plants are already hard pressed to turn a profit. And if the market remains as is, we can expect these trends to gather momentum. With all of this in mind, we must prepare for an energy economy based on millions of small and medium-sized sources. This will increase both the complexity and the demands placed on our energy infrastructures. What will be particularly critical will be the process of removing system-stabilizing conventional power plants from service.

As renewable energy becomes increasingly important, what role will conventional energy sources play?

Schnettler: The International Energy Agency (IEA) estimates that even in 2040, 75 percent of the electricity produced worldwide will come from fossil fuels. This may or may not be accurate. In any case, the rates at which renewable energy sources are being added around the globe already exceed the level of conventional power generation units today. We should assume that these developments will gather considerable speed, thanks to declining production costs for renewable energy and optimized processes for efficiently storing excess electricity or converting it into chemical base materials.

In your opinion, what major trends will fundamentally shape tomorrow’s energy mix?

Schnettler: The individual energy systems for electricity, heating/cooling, natural gas, and mobility will increasingly merge to form an overall system in the medium and long term, and they may even take on completely new supply structures. At the same time, the requirements for supply security and system stability will be very high. We can assume that we will protect and operate energy systems in the future in completely different ways than we do today. No one really knows exactly how this will be done – and it is therefore a subject for important research.

What does this mean for the main research areas at Corporate Technology?

Schnettler: We’re focusing on four main topics:

1. Boosting systems expertise: One example of this is the creation of the Energy System Development Plan (ESDP) including the different manifestations and developments in future energy markets.

2. Safeguarding innovations in "traditional fields": e.g. in  DC systems – not only in power transmission. There is a trend toward "electronified" networks, in other words, the increased use of power electronics components in power supplies. This must be reflected in the creation of the required know-how and the development of new converter technologies.

3. (Chemical) energy storage systems: Development work will focus initially on high-priced basic chemicals. We expect cost-effective energy storage or conversion in the form of hydrogen or synthetic fuels to be possible only in the long term.

4. New technologies for distributed energy systems: Reference is made here to the optimum interaction of different energy sources and forms in multimodal energy systems. If power supply in Germany alone is characterized by millions of small power generating units, the real challenge will be to ensure stable network operations on a global scale. Whether the solution lies in swarm theoretical approaches or distributed control, either way ancillary services will have to be provided in future by distribution networks.

In addition, we are actively pursuing ways of integrating the capabilities of (power) electronics and IC technologies into the energy system even more intensively. This will put us in a position to continue operating a stable energy system in the future, both during normal operation as well as when malfunctions occur.

How is Siemens dealing with the uncertainties we’ve discussed?

Schnettler: What’s important is that we identify future trends – and their consequences. Of course, this means that we must have a thorough understanding of our customers’ business where technological, political and economic changes are concerned­–maybe even better than they know their business themselves. This alone can be our unique selling point on a permanent basis. We need to offer our partners and customers solutions faster which, in turn, help them survive in the new worlds of regenerative and increasingly decentralized energy, for instance. This is how we will build current and future power supply structures in a complex simulation environment as part of the ESDP.

When can we expect to see the first results?

Schnettler: I expect the first phase to be completed by the end of 2015. This will put us in a position to determine and assess the most probable developments using a wide range of scenarios and parameters, not just in Germany or in Europe, but also with sufficient flexibility and adaptability to apply our scenarios to a variety of conditions and countries worldwide.

Armin Schnettler has been head of Siemens Corporate Technology's New Technology & Innovation Fields Research Department since 2013. His focus is on strategic research projects such as tomorrow’s power supply, e-mobility, and new information and communication architectures in different domains. Prior to joining Siemens, he headed the Institute for High Voltage Technology at RWTH Aachen University since 2001. His research interests include sustainable power supplies, transmission and distribution grids, and high-voltage technology.

Schnettler previously served as a member of the Research Association for Electrical Systems and Power Electronics e.V. and as a member of the management team at ABB's High Voltage Products and Substations business area.