Is the energy industry doing enough to embrace sustainability and the energy transition?
I think the energy industry is doing a lot, whether it’s going to be enough, other people will evaluate sooner or later, and we will see if we achieve our climate goals or not, but what I see is an incredible momentum towards changing the way how we govern countries, companies, and how we set objectives.
There’s lots of levers that the energy industry and the world can pull in terms of trying to reduce carbon emissions. What do you see as the most important area for the industry to invest in?
I think, honestly, the most important aspect is that we make all these technologies ready for investment as such, I would not try to prioritise so much because I believe we need to play the full piano of options that we have. The problem is big enough that we can afford this. What we cannot afford is losing too much time into getting projects bankable. So a lot of effort has to get into de-risking technology and projects because a lot of the technology that we are looking at is available, but it has not been scaled or has not been proven yet in large scale commercial deployments. And that goes for green hydrogen as much as for large scale CCUS.
Where do you see the Middle East of sitting in terms of the energy ecosystem and embracing sustainability?
I think the Middle East has a very interesting dual role. A lot of wealth has been created by extracting hydrocarbons and selling it off to the world. So now, you could see the emergence of the whole green economy as a threat or as an opportunity. A lot of players in the Middle East have the means to go large scale fast, and also there is a certain pressure because if they don’t go somebody else might, so there is a competition to come between different regions and that is now not only by the availability of resources in terms of oil and gas, it’s just resources in terms of sun and wind, and there are more countries that might have the same starting position when you look purely at renewables. But then other questions arise: can you run the infrastructure? Do you have the people you need? Do you have the relationships with offtakers all around the world? This is something that needs decades to build up, trustful relationships, because you’re talking about mutual dependencies in a larger energy scheme, and that’s a starting point that the Middle East has that is different from other regions. This, I think, is the biggest opportunity that can be used.
On hydrogen, there is some debate at the moment on the type of hydrogen that will fuel its growth? Blue, green, pink, etc. Which do you see as the most important?
I think we have to keep the objective in mind and the objective is reducing carbon intensity. Doing this by whatever colour is necessary is fine for me. I think, again, we need them all. We have to keep working on all of them to find the most viable options and a little bit of competition between the colours does no harm here because it keeps us going. Whether it’s now easy to invest, for example, in a large scale carbon capture, I think that for example, is just as difficult as building up large scale green hydrogen because you also don’t have super well established CCUS facilities yet and they are equally expensive. We see challenges everywhere for every given time and colour. I don’t think we can afford to be super picky about which one we trigger first.
Tell me a bit about what Siemens Energy are doing in the Middle East region in terms of sustainability and green energy.
In Siemens Energy, we look at a pretty large portfolio because in the Middle East, in the energy system, we are everywhere, we are in many countries, and have built as much as half of existing energy systems. We are looking at the whole question of energy transition pretty much from the electron side … But electrifying processes is almost everywhere and is a big lever to increase sustainability. Getting the electron somehow in the game is something that helps us to reduce operation costs, creates uptime, and ultimately reduces the amount of hydrocarbons we use or the carbon intensity of our processes and such.
There is a great deal that Siemens Energy can contribute to decarbonising the existing industries and make them more efficient, and then on top of that is the aspect of green hydrogen, which is only one part of our activities, but, for me, the most important one. There I believe our role is to help our partners in the region to do the right steps at the right time. There’s a lot of talk about green hydrogen, but there’s also a lot of fuss about it. The question is, what are the steps that we need to do that are required and reasonable so that we can manage the risk, build up storylines and proof points over time that allow us to get these technologies bankable. This is where it really starts scaling, when we get private sector money into green hydrogen projects. That’s when it’s not anymore about subsidies, and today, it’s pretty much a subsidy story. The earlier we have enough proof points that the technology is proven, it’s reliable, and it can be scaled, we can further drive down costs.
When we have these proof points then we also get private sector money in the position to actually get in there because the willingness is there, money is available, but you need to still work on the boundary conditions so that this really can take off.
