Andreas Schierenbeck CEO of the Building Automation, Building Technologies Division at Siemens speaks with us about the importance of Smart Grid technologies and what Siemens is doing to become a market leader in smart grid transportation, and building automation.

Full Transcript:

Ben Lack: We’re here with Andreas Schierenbeck, President and CEO of Siemens Building Automation. Thank you so much for your time.

Andreas Schierenbeck: You’re welcome.

Ben Lack: I want to talk to you today a little bit about the smart grid. It’s an advancing technology, especially here in the United States, and I’d like to know what Siemens is doing to try to become a player in this emerging market.

Andreas Schierenbeck: You’re completely right. The smart grid is a very advanced technology, and we have a high interest in that from Siemens’spoint of view. Because I think we have everything in our hands, the smart grid is not only about smart generation, smart transportation, and smart metering. It’s as well about smart consumption and smart buildings.  Because what is a smart grid doing? A lot of definitions are around in this world doing something on an immediate level, the internet, or electrical network and all that stuff. Partially that’s why. In former times, we have produced what we have consumed. So we just for other consumers, made a guess what could be the consumption, and then we produced it. This will not work in the future. In the future, we have monitored renewable energy fueled by water and wind which can stop in a second, maybe e-cars running around. I think we have to change the whole equation. Now we have to consume what you’re generating exactly at this moment because you cannot store energy in a network. I think here everything has to play its own, smart generation, smart transportation, smart metering, and smart consumption. And Siemens are excellently positioned in that because we have from generation, transportation, metering and smart consumption on industry side and on building side everything in our portfolio.

Ben Lack: Talk to us a little bit about smart metering. What are the solutions that Siemens has for smart metering and how do you roll that out to your markets?

Andreas Schierenbeck: Smart metering is not a key-enabling in technology, I would say. It’s needed as an interface between consumption and the network. But nowadays, the meter industry is normally a little bit influenced from the utilities itself. If you want to buy your electricity, you’ve got no choice. A meter’s coming from the utility, and you have a choice to have electricity or no electricity which comes with a meter. But the world of electric meter shouldn’t be underestimated. You need transparency in your consumption. You need an interface to tell the consumption part when to generate, or when to use more or less energy. And from this point to aggregate these loads, we have to write solutions to balance the loads of the other ends of the meter. We have solutions there.

Ben Lack: Talk to us about what the biggest value proposition or growth opportunity within the smart meter industry or smart grid industry that you guys see is the really the place to focus most of your resources and attention on.

Andreas Schierenbeck: Well, they’re definitely different value points. I’m a believer that on the smart consumption side has the biggest potential to drive energy efficiency into flexibility because if you attach that into buildings and consumers, you can make a big difference. Just to give you a few figures. If you cut down five percent peak load, it would save the U.S. economy $3 billion a year. An investment on that part of consumption side is not very big. But the smart grid consumption needs investment in smart metering as well because without communication it doesn’t work. And you need, as well, some changes in the network and depending on that integration of renewables. Because what you’ll see as well if you see more zero-net energy buildings or more generation in a distributed way, the energy flow will just go in from the consumption side to the transportation side. And the networks are equipped for that. So I think the investment potential in all three areas is huge. And the value profits are there. And it’s not only a field for Siemens.

Ben Lack: For smart consumption, do you really mean as it relates to building automation or energy management as the key driver for that?

Andreas Schierenbeck: Yes, I think so. Because if buildings are going from a pure consumer to a generator as well. You have one-time generation and combined generations and solar and wind for instance, or e-car loading. You have to put more intelligence into the consumer side. You have the chance to store energy into buildings for instance. If you have a lot of wind energy as a system, what should you do with that? You have to use it now.  Then heat up some water stored in the building.  The biggest challenge in Europe, for instance, is integration of renewables. Last year on the German stock exchange of energy, fifteen percent of the wind energy couldn’t be sold. We couldn’t turn  the switch be off just because the consumption part is too inflexible.

Ben Lack: Is that more of a software play to make sure that when that energy is going into the grid that it’s actually being delivered to someone that’s ultimately going to use it?

Andreas Schierenbeck: I think it’s a more deliberate problem. You need communication, first of all, that you can tell consumers you’re doing that. Nobody on the consumption side has really a concept of time where you have electricity or electric energy. You just have a flat rate at the moment. And if you have a flat rate and no business case to investing in any infrastructure to make it flexible.  So I think it has to come in hand-in-hand. Energy has to come on a flexible tariff. There should be a time where you’re offered electrical energy and then, of course, you will see the investment very easily fall in line to just do these things.

Ben Lack: So let’s say you have a time machine and we go five to ten years into the future. Where do you see Siemens playing in the smart grid industry?

Andreas Schierenbeck: I would guess that in fifteen to twenty years you will find Siemens all over the place. On our traditional fields like generation and transportation. They’re doing wind energy generation, doing solar, concentrated solar. Doing the transportation of that. Doing part of the smart metering to have put intelligence in the network, and playing a big one on the consumption side as well. Integration of e-cars, charging them, recharging them. Making the buildings flexible and intelligent.

Ben Lack: All right, final questions and this is more of a person question than about the company. I’m really curious to know why you do what you do.

Andreas Schierenbeck:      Well, I’m an electrical engineer. I’ve worked for quite a lot on power transmission and distribution sector. I came to the building industry five years ago, and I was thrilled with the potential that was there. Buildings are much more complex than I ever thought. As a process, driving a building to make it intelligent, flexible and to make it comfortable in the same way, it’s a huge technological challenge. And as an engineer, I just like it. The business potential is just the cherry on the cake.

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