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The Future of Energy

On the Threshold of a New Age of Electricity

That the global energy system is not sustainable is clearly demonstrated by increasingly scarce resources, frequently unstable energy supplies, and climate change. Ambitious plans have been drawn up to change that — primarily with the help of digital technologies and distributed energy generation systems. The goal of these plans is to dispense with fossil fuels.

The Global Footprint Network is a renowned think tank that addresses the challenges facing a resource-scarce world. It recently pointed out that mankind is already consuming 50 percent more resources than the earth can supply. At the same time, the high level of CO2 emissions is causing the global temperature to slowly, but steadily rise.

Time for Sustainability

The finely-balanced ecosystem we depend on for food and many of our raw materials – including fresh water – will collapse if we don’t do something soon. However, the challenges associated with the growing threats to our environment can be met only if major economies and their energy systems are increasingly focused on sustainability. On the one hand, this will require a growing emphasis on the reutilization of raw materials as well as recycling and a circular economy. On the other, renewable sources of energy will have to cover a much larger share of our energy needs, while energy demand is ratcheted downwards as a result of steadily increasing efficiency.  


Utopian dreaming? Not at all. The outlines of a sustainable energy system of this kind are already becoming apparent in Germany. With its “energy transition,” Germany has become the first country in the world to set itself ambitious goals for a sustainable energy supply. Put simply, the German government wants to achieve the following targets: A complete phase out of nuclear energy by 2022, generation of 80 percent of the country’s electricity from renewable sources by 2050, and an 80 percent reduction in greenhouse gas emissions between 1990 and 2050.

Model Energy Plan?

Germany’s energy transition is being closely monitored by other countries. Many have realized that they need to take measures against climate change and increasing resource scarcity. What’s more, they have also realized that this challenge can be overcome only by ensuring a steady supply of electricity from renewable sources of energy.


However, major technological advances and innovations will be needed in the energy sector in order to make this possible. Moreover, such improvements will have to be made in many areas, including energy efficiency and the production, transmission, and storage of electricity. These measures will have to be implemented in a total of eleven areas (see feature below). Not until this is accomplished can a sustainable energy system be created. The good news is that we don’t have to invent completely new technologies, because many of the required solutions are already available or are now being developed.

Farewell to Fossil Fuels

Governments are giving this transition a boost. In order to usher in a new age of electricity, the heads of the G7 countries declared at their 2015 summit in Elmau, Germany, that they would completely decarbonize their economies by dispensing with fossil fuels by 2100 and using electricity as a universal source of energy. At the United Nations Climate Change Conference in Paris in December 2015, countries adopted a new climate-protection agreement to supplement the Kyoto Protocol. It is an important step in the right direction. However, as the charts and other facts clearly show, great efforts will still be needed only to achieve a turnaround in emissions by 2020 so that climate change won’t exceed the two-degree Celsius target. These steps harbor challenges but also opportunities for mankind, nature, and the economy. It’s time to take action!

Energy Use

Saving energy and using it better

The cleanest energy is the energy that isn’t needed. There is a huge potential for energy conservation, especially in buildings, industry and transportation. Saving energy and using energy more efficiently are the two main factors involved in creating a sustainable energy supply for the future. This can be achieved by controlling energy consumption and integrating energy-saving products and solutions in buildings, industry and transportation.
Electric engines account for nearly two-thirds of the electric energy used in industry, for example for conveyor technology or pumps. With optimized solutions, the energy consumption of industrial drives can be lowered by up to 30 percent. Worldwide, about 40 percent of energy is consumed by buildings. Here too a lot can be achieved: through heat insulation and pumps, smart building technology, or efficient lighting.

of the world's
energy is consumed
by buildings
of greenhouse gas
emissions come
from buildings
Up to 40%energy savings can be realized through
Intellingent Building Automation

Energy Storage

Integration of renewable energy sources

Today’s energy mix leads to fast-changing imbalances between generation and load, impacting grid stability and power quality. Battery storage can act as an energy consumer as well as producer. This combination helps to improve grid stability and enable greater integration of renewable energy sources. Thus the grid can utilize more available energy.  

Alternative you can feed surplus power into an electrolyzer, which uses electricity to decompose water into hydrogen, and oxygen and generates heat. The obtained hydrogen can be stored and used to fuel a gas turbine and in several industrial processes.

Since the supply of power from wind is
irregular, power storage and converting
systems will be a necessity.
Battery StorageHydrogen Storage


Infinite potential for sustainable energy

Wind, photovoltaik, small hydropower plants and biomass greatly contribute to meeting power demand and environmental awareness.  Especially offshore wind power plants with an installed generating capacity in the triple-digit megawatt range are already in operation and deliver great amounts of electricity with a high degree of continuity. But a growing number of onshore wind farms are being sited in regions with moderate to low wind speeds. Therefore we offer a new generation of wind turbines, which extract the maximum energy yield from low to moderate wind velocities.

Also solar energy has a great potential and is an inexhaustible energy source. As a long-term, reliable source of energy, the sun provides a huge annual amount of energy. Thanks to the technological advance of recent years and the development of the photovoltaics market, PV systems are now ready for large-scale production of electricity. And if we would like to turn water into energy small hydropower plants have proven to be a sustainable source of energy as well.

For example Germany. “In 2030, there will be 44,100 wind turbines along
with 3,000,000 photovoltaik systems.”

Central Power Generation

High-efficiency power generation

If clouds block the sun or the wind dies, power fluctuations must be balanced out quickly. Gas-fired power plants that can be started up quickly are ideal for this. Combined with a steam turbine, the world´s most efficient combined heat and power plant (CHP) from Siemens can convert approx. 61,5 percent of the energy from natural gas into electricity. Thanks to its CHP concept the overall fuel efficiency increases to 85 percent.

Bringing out the best:

World records at the
Lausward Unit “Fortuna”,

Power output
603.8 MW(el)
Plant net efficiency ~61.5 percentSteam extraction district
heating 300MW(th)


Intelligent financing solutions

When cities and buildings look for technologies to reduce their energy consumption, smart financing solutions are often needed to overcome the shortage of funds. When engineering and financing solutions come together, buildings can unlock huge energy saving potential – in consumption and in cost. A good example of this is Siemens' energy performance contracting for building technologies – a combination of consulting, modernization services and customized financing. With this, customers do not need to make any initial investment; they simply use the energy cost savings to pay the installments.

Worldwide, Siemens has modernized more than 5,200 buildings this way, with more than €1 billion in savings and more than ten millions tons of CO2 reductions.


Energy performance contracting:
a self-financing cycle


Intelligent electricity networks

In the future, not only large plants but also millions of small and medium-sized power producers will feed electricity into the grid. More and more former consumers of energy are becoming producers as well. This fact, and the fluctuating feed-ins of renewable energy, make intelligent power grids necessary for power distribution. With “Smart Grids” like these, Siemens helps to achieve the right balance between electricity production and demand - throughout the world, and here in Germany.

5 times as much power
produced as consumed

The village of
Wildpoldsried produces
5 times more power from
renewable sources than it

Natural Gas

A major backbone for the world’s power supply

Natural gas accounts for around 25% of the global energy demand. The proven reserves climb new highs, based on deep sea exploration and unconventional resources. As the cleanest fossil energy resource natural gas will continue to increase its share of the global energy mix, growing at 1.8% per year until 2035. Gas trade is primarily carried out as Liquefied Natural Gas (LNG) and by pipelines. Mission critical technology from Siemens makes the total process from production of gas via transportation to electrical power more safe and efficient.

Growing importance
of natural gas globally

Primary Energy (Share)Source: BP Energy Outlook 2016 (base case)

Power Transmission

Low-loss energy transmission

Should primarily be used where they occur in abundance: solar energy in sun-drenched areas and wind energy on the high seas. Therefore, long-distance networks must be further expanded, beyond national boundaries, using classic overhead lines, cables or gas-insulated lines. Besides classical high-voltage AC connections, high-efficiency power superhighways with high-voltage direct-current (HVDC) technology can be used for very long distances.

For example, in a HVDC Technology project in China, Siemens has shown that around 95 percent of the electricity makes it to the consumers, even over a distance of 1,400 kilometers and at a transmission capacity of 5,000 megawatts.

Delivering electricity right to where it is needed.

Power Distribution

Always well supplied

The requirements on power distribution and therefore on medium- and low-voltage grids are increasing continuously. Changing directions of power flow, load and voltage fluctuations, which are caused especially by the strongly growing number of power supplies from volatile power sources, e.g. photovoltaic/biogas plants and wind farms, make the distribution grids of today go to their capacity limits. The solution is an active distribution grid with intelligent transformer substations as key components. These contribute to an active load management in the distribution grid and enable an automatic and fast fault clearance in case of disturbances.

How to reduce mean down time from hours to seconds

Self-healing grid for Rotterdam harbor district Stedin, Netherlands

System restart in less
than a minute

Grid Control & Applications

Information technology is what we need to get the meter data and the consumption data into the system so that we can measure consumption and draw the necessary conclusions. Automation technology makes the meter data available for outage management and outage measurement in the grids. So this is where operations technology and information technology become one. The collected data is stored and analyzed, in the interests of stable and efficient power supply.

The enabling factor for all of Siemens’ cross-sectoral solutions is a smart grid that allows an intelligent energy management.

From Big Data to Smart Data
smart meters
are estimated to be installed globally
leading to 280
petabytes of data a year
storage capacity of
BluRay discs


Crude oil supply, the dominant primary energy source

Oil consumption is expected to grow and crude oil remains the dominant primary energy source for the next 20 years. Especially transport fuel is dominated by oil, its low relevance in electrical power generation will further decrease. Oil reserves are enough not at least thanks to exploration and production in deep sea regions and opening production from unconventional resources like oil sands. Furthermore, enhanced oil recovery technologies for mature fields enable to get more out of a field. Siemens innovative technology makes production, transportation and processing more efficient and environmentally compatible.

Global oil demand by sectormboe/d = million barrels of oil equivalent per day
  • Electricity generation
  • Resid./comm./Agriculture
  • Other industry
  • Petrochemicals
  • Transportation
Source: OPEC, World Oil Outlook 2015 (reference case)

Interview with Steven Chu

An Interview with Former U.S. Secretary of Energy Steven Chu


Are we on the edge of a climate crisis?

Chu: Climate change is a real threat to our long-term future. The issue is, what will happen if temperatures go up two degrees, four degrees, six degrees Celsius? A five to six degree reduction in average global temperature is the difference between what we have today and what was experienced during the Ice Ages. And an increase in temperature on the plus side would also be a very different world. With a six degree increase, most of the glaciers on Greenland and Antarctica would be gone and the sea level would be 70 meters higher. Some 120,000 years ago, when the world was a mere one degree warmer than it is today, the fossil records show that sea levels were six to nine meters higher.


What’s more, the glacial watershed storage systems that our economies are based on will be threatened. Climate change does not respect national boundaries and in many areas of the world agricultural productivity may collapse. There will be increased species extinction. But there are other things that we can’t predict accurately. There are potential tipping points, such as the temperature at which a significant fraction of the carbon stored in the tundras of Siberia and Canada would be released, driving the global temperature even higher.

What can we do to avert the most drastic effects of climate change?

Chu: First and foremost is ratification by the U.S. of the United Nations Framework Convention on Climate Change, which was adopted in Paris in December, 2015. In addition, I think the most important thing we can do is to put a meaningful price on carbon. This could be a cap-and-trade system or a tax. The price can start at $10/ ton of CO2, but needs to rise over the next twenty years to perhaps $80/ton, and be implemented without loopholes. If the next U.S. president makes energy and climate change an initiative the way Kennedy made it an initiative to reach the moon, this would go a long way to solving these problems.

How can companies such as Siemens help to achieve a decarbonized energy system?

Chu: Siemens is a world leading company in many energy technologies that include wind turbines, gas turbines, high voltage transmission systems, from HVDC transformers to undersea cables, and more. The electrical grid of tomorrow will require substantially more wind and solar power. But integrating the increasing reliance on intermittent renewable energy with energy-on-demand generation, the demands of more agile transmission and distribution networks, as well as energy storage, is an engineering challenge.

In addition to producing many of the essential components of the future electrical system, Siemens has an opportunity to be the system integrator. The future grid will have to deal with differences from country to country in terms of mixes of centralized vs. decentralized, and regulated vs. unregulated sources of renewable, fossil and nuclear energy. Cloud computing, machine learning and autonomous subsystems will become a necessary part of the management of this increasingly complex system that must remain robust and secure. Siemens is one of the few companies in the world that have the opportunity to become the complete solution provider to a cleaner energy future.


What steps should be taken by governments and regulators to minimize carbon dioxide emissions?

Chu: We should mandate even tighter efficiencies in devices such as computers and consumer appliances than those that have already been set by the Obama Administration. Second, as is already the case in Germany, we in the U.S. should require that before a house can be sold or even rented, the owner must provide a statement from utility companies certifying gas and electricity usage for the last 12 months. This would allow buyers and renters to compare energy requirements for different buildings. Guess what this would do? It would encourage homeowners at least one year before deciding to sell or rent out their property to seal major leaks, put in more insulation, and possibly install more energy-efficient heaters, air conditioners, etc. This would also help home owners and builders to do a better initial job of making new homes energy efficient because they would appear more attractive to prospective buyers. What would this cost? Almost nothing. The utility companies already have records of electricity and gas use on every home. So why not provide this information to home owners as a feedback mechanism?

What technologies offer the greatest hope for a sustainable energy future?

Chu: The first thing that comes to mind is to use resources only to the extent that they can be renewed, and to focus on energy sources that are inexhaustible. For instance, the earth is cooler in the summer and warmer in the winter. So you can think about heat pumps that will cool you in the summer and warm you in the winter. I think photovoltaics, solar thermal and biofuels are also getting a new look. There are also artificial photosynthetic systems that allow you to take electricity or sunlight and make a chemical fuel.


While we are now on track to developing affordable batteries to power plug-in hybrids and all-electric vehicles, trains – where electrification is not practical –  long-haul trucks and planes will need liquid hydrocarbon fuels. Hence, in the foreseeable future, we will need a high energy-density transportation fuel that can be provided by artificial photosynthetic systems or use clean energy to split water and reduce carbon dioxide to form liquid hydrocarbons. This is a technology we are going to have to master.


Dr. Steven Chu was the 12th U.S. Secretary of Energy from January 2009 until the end of April 2013. He was the first scientist to hold a Cabinet position and the longest serving Energy Secretary.


Interview conducted by Arthur F. Pease

Decarbonization at Siemens

A Global Company on the Road to Achieving Decarbonization

The key to achieving CO2 neutrality is to establish a carbon-neutral energy mix and a sophisticated communications system in which energy producing and consuming systems talk with each other in real time. To begin with, renewable sources of energy have to be available at competitive costs. We need to build electricity highways and smart grids in order to create a balance between supply and demand. The development of energy storage facilities is important as well. In addition, energy must be utilized much more efficiently in buildings, transportation, and industry. Siemens is very active in these fields, where it already offers many energy-efficient solutions and environmental technologies that are combined in a separate environmental portfolio. In fiscal year 2015, this portfolio generated €32.7 billion in sales for Siemens and helped its customers avoid around 487 million metric tons of carbon dioxide emissions — the equivalent of about half of Germany’s total CO2 emissions.


Companies such as Siemens know that they themselves need to urgently take action. Now the company has set itself the ambitious goal of cutting its CO2 emissions of 2.2 million tons (as of fiscal year 2014) in half by 2020 and to become CO2-neutral by 2030.


Sustainability as a Business Model


As part of its Energy Efficiency Program (EEP), Siemens therefore plans to invest €100 million over the next three years in order to improve the energy balance of its buildings and production facilities. To do so, the company will extensively use technologies from its own portfolio, including energy management, monitoring, and automation systems for buildings and production processes as well as energy-efficient drive systems. The result will be a win-win situation, because Siemens expects these investments to help reduce its energy costs by €20 million per year while providing its customers with products and solutions that will help them to operate ever more sustainably themselves.


Siemens also expects to decarbonize its operations by investing in distributed energy systems. To make this possible, the company is planning to combine the energy generated by cogeneration power plants, wind turbines, and photovoltaic systems with innovative storage and smart energy management technologies. This approach will be first applied at the Siemens Campus in Erlangen, Germany, where the company will build state-of-the-art offices, research facilities, and labs.




Turning Everything Green


In addition, Siemens intends to increase the percentage of the electricity it buys that is generated from renewable energy sources. In some cases, this will have a doubly-positive effect, because Siemens will buy green electricity that has been produced by its customers worldwide using Siemens’ own technologies.


Finally, Siemens also wants its vehicle fleet to help it achieve its ambitious CO2 target — by sharply reducing fuel demand. Will our entire planet be decarbonized by 2100? Siemens will reach that goal  long before the turn of the century. That achievement will not only turn the company into a test lab for others to learn from and follow, but also promises to pay off financially.

Energy Systems of the Future

Researching the Energy Systems of the Future

Forging ahead with the decarbonization of a company such as Siemens is one thing, but putting it into practice all over the world is another. One crucial factor in this process is the expanded use of renewable sources of energy, which is currently growing at a faster rate than ever before. According to the Renewables 2016 Global Status Report, 147 gigawatts of renewable energy capacity were added in 2015 — a record amount. As a result, almost 1,900 gigawatts of renewable energy are now installed on our planet. At the same time, renewable energy prices are falling. In 2016 the International Renewable Energy Agency announced that the cost of the electricity generated by photovoltaic (PV) systems and wind turbines has fallen by about 80 percent since 2009 and could decrease by as much as an additional 60 percent between now and 2025. The current record-low price for PV electricity is 2.4 euro cents per kilowatt-hour. At such low prices, electricity generated from renewable sources would be highly competitive.


Revolution in the Making

“But taken alone, the expanded use and reduced cost of renewables are not enough to achieve complete decarbonization,” says Professor Armin Schnettler, Head of the Energy and Electronics research unit at Siemens Corporate Technology. “We also need to conduct extensive research in order to successfully dispense with fossil fuels by 2100. That’s why the road to the decarbonization of our energy systems requires nothing less than a revolution.” To make this revolution possible, we will need to learn how to optimize our energy ecosystem. That means developing technologies that manage the real-time interactions between individual electricity generation systems with the merging and interactive needs of demand sources such as heating, cooling, lighting and mobility.


Accelerating Electrification

In order to achieve these goals, Corporate Technology is focusing on a variety of technologies. They range from compact high-performance converters to efficient direct-current systems, flexible short-term and long-term energy storage units, and the digital twinning of energy systems and markets. Electrification is playing an increasingly important role in all sectors. “The end of the fossil-fuel age and the current efficiency targets are driving the electrification of all areas of business,” says Schnettler. This is true of every sector, ranging from the chemical industry to mobility and energy systems.

Electrification is also shaping key research projects at Siemens. In one such project, experts are investigating the great potential of chemical storage solutions. In another, they are studying ammonia synthesis to create an energy source that can be easily stored and is environmentally friendly. Other Siemens researchers are developing electric drive systems for airplanes in a project known as eAircraft. Siemens is investing millions of euros in these and other completely new markets – and with good reason: The future of decarbonization will be decided by the level of energy efficiency it unleashes.