New goals for Siemens: seize new opportunities with China’s low-carbon ambitions

Republish with permission from The Paper

New goals for Siemens: seize new opportunities with China’s low-carbon ambitions

Republish with permission from The Paper

New goals for Siemens: seize new opportunities with China’s low-carbon ambitions (Published by The Paper)

Thomas Brenner, Executive Vice President Siemens Ltd., China and General Manager, Smart Infrastructure, Siemens Greater China

Though the impact of COVID-19 on certain target markets has yet to entirely subside, Siemens’ Smart Infrastructure (SI) unit in China enjoyed double-digit revenue growth in the first quarter of fiscal 2021 (October to December 2020).

However, Thomas Brenner, Executive Vice President Siemens Ltd., China and General Manager, Smart Infrastructure, Siemens Greater China, is keen for more growth. China is enthusiastically adopting the low-carbon era, creating new marketing needs. Brenner, an old China hand from Germany with strong entrepreneurial flair, is pushing his team to embrace the ever-changing market. He encourages it to be open to new opportunities and take heed of wherever the market appears favorable beyond industry. “We cannot focus only on our platform or circle,” he has said. “We need to reach a broader market by being more flexible in the way we work.”

“The most exciting market is the one that is unknown and is waiting to be explored,” Brenner says. Decarbonization and sustainable development bring “opportunities for business, opportunities for society and opportunities for a country”, and that applies particularly to China, he says. With the green revolution Siemens is transforming from a supplier that offers products, systems and software to “a true partner of its customers” in exploring business opportunities.

“Start by changing yourself”

Two years ago Siemens SI was founded after Siemens was restructured. Now, after the energy business were split last year, Digital Industry (DI) and SI are Siemens’ core businesses. Siemens SI brings together the former energy management unit, the building technologies unit and some other businesses, aiming to increase synergy between energy systems and buildings and improve overall operating efficiency.

Siemens SI specializes in providing for such facilities including power grids, buildings and grid edges, Brenner says. The power grids interact with other facilities, and various components within a power grid interact with each other, too. That is why Siemens aims to build an ecosystem to integrate smart grids, buildings and the grid edges through digital and smart technology.

It is easy to understand the concepts of smarter grids, a higher ratio of sustainable energy and more power-efficient buildings. But what exactly are grid edges? They serve many roles, such as converting energy into different forms, charging and storing energy for electric cars, Brenner says. In a Siemens project in Canada, households use their buildings as “batteries” to store heat. These households can decide when to use the electricity and when to sell it back to the power market, after which the peak shaving and valley filling of electric power can be realized.

Another successful case is the Sello Shopping Center, one of the largest shopping malls in Finland. Siemens provided a whole kit of PV batteries, storage system, and smart building automation system for the center. Thus, with AI’s help in predicting volume of visitors and weather, Sello was able to decide when to store energy and when to sell according to their electricity consumption and price tiers.

From households to cities it has become increasingly common that energy producers are consumers, too. The marriage of smart grids and smart buildings presents new business opportunities. Sello Shopping Center is saving 150,000 euros a year on energy and has increased its profits after adopting the new system. “The market for energy and infrastructure value chain is broad and limitless,” Brenner says. “With Siemens’ technology we can transform the value chain in terms of energy, industries, and buildings. We can change our consumption habits, save our energy and reduce our emissions.

“If you want to change the world, you start by changing yourself,” Brenner says. The technologies already mentioned here have now been put into use to reduce Siemens’ carbon emissions.

As early as 2015, before other big industrial concerns, Siemens promised to become carbon-neutral in its operating business by 2030. And since 2014 Siemens has cut by 54% the carbon footprint in the value chain by improving energy efficiency, using the distributed energy system and procuring green energy. Siemens has also invested more than 100 million euros worldwide to cut its carbon emissions and has joined suppliers in reducing emissions in the supply chain and clients to cut emissions using Siemens’ products.

Change, of course, cannot happen overnight. In recent years, Siemens has been committed in analyzing the power consumption conditions of its own buildings and factories before upgrading them into decarbonizing modal constructions step by step, in a green way that is replicable, sustainable and future-oriented. In Regensburg, Germany, Siemens renovated a 60-year-old factory, replacing its old independent power supply with renewable resources and a flexible integration to the grids. Siemens SI has invested 63 million euros to upgrade its global headquarters in Zug, Switzerland, aiming to realize carbon neutrality by 2023 there.

Think outside the box and find new business opportunities

SI’s success in China heading into the fiscal year 2021 has much to do with the steady recovery of the country’s economy and its resolute pursuit of reducing carbon emissions. The company’s performance is helped by the effective prevention and control of the pandemic by the Chinese government, Brenner says, which ensures that companies can continue their production and operations, giving them an edge on other countries and regions. On another note, China has pledged to become carbon neutral and introduced a number of policies relating to the green economy and developing sustainable resources, encouraging the market to follow suit.

From what Siemens has learned of the market, companies in heavy industries, such as petroleum and steel, consume more energy and have the greatest need to cut emissions. Meanwhile, demand for higher energy efficiency is thriving in the field of new infrastructure, e.g. big data centers and supercomputer centers.

The National Supercomputing Center in Jinan, Shandong province, is one of seven national supercomputing centers. With its expertise and experience in electrics, distribution, digital grid, fire safety and engineering controls, Siemens established a strong and reliable electricity system for the center. The system had protection through several defenses that were integrated with Siemens’ industrial PLC controllers, thus being resilient for various contingencies and facing lower risks.

The escalating energy consumption of data centers has gained a lot of attention in recent years. These centers consume huge amounts of electricity while providing big data services. They have thus been dubbed electricity guzzlers. Brenner says Siemens can help data centers reduce their PUE (Power Usage Effectiveness, the ratio of the amount of power consumed by a data center to the power used to run the computer infrastructure within it, the international standard for electricity efficiency in data centers) to 1.25, even down to 1.13, a figure much lower than the average PUE of data centers in China.

“In addition to these we have discovered some brand-new fields,” Brenner says. New opportunities for SI have emerged because of more rigorous, environmentally friendly standards, technological advances and stricter measurements of clean space. The major market for Siemens’ business in buildings used to be the commercial buildings. With the impact of COVID-19 “new markets have been explored, such as in pharmaceuticals and hospitals that have higher standards for air quality”, Brenner says. “This is what we are good at. We can ensure better air with less energy consumed.”

Brenner says that what is important to him and his team is to think outside the box and explore new market possibilities that had previously escaped their attention or that of their clients. Those who used to sell only hardware or software need to adapt to the new rhythm and have a growth mindset.

Siemens is working on building a greater eco-system. “I often tell our partnership team that we should look more extensively and even seek partnership with some start-ups, because they are creative and innovative,” Brenner says. “And we are able to apply these ideas to the market and scale them up.”