Revealing its most recent project for a sustainable supply of energy, Peter Löscher, the Chief Executive Officer of Siemens AG – sheds light on the company’s initiative, “Desertec”, describing it as a new generation for renewable energy
What is the Desertec initiative and its effect on North Africa and Europe? What will be the amount of energy that will be produced?
The Desertec initiative is designed to provide a sustainable supply of electricity to North Africa, the Middle East and Europe on the basis of renewable energies. The electricity is to be produced in solar thermal power plants in the desert regions of North Africa and in wind farms off the coasts of Africa and Europe. Concerning Europe, the Desertec Initiative aims to supply from 15 to 20 percent of Europe’s energy needs by 2050. Also, the project will considerably strengthen local African and Middle East expertise and employment in these areas. If capital, competence and resources from a number of countries are brought together, at the end all parties benefit. Africa and Middle East will definitely be one of the big winners.
What is the role of Siemens in Desertec initiative? What is Siemens scope of products and solutions for the project? Comparing with its competitors, where do Siemens technologies and solutions stand regarding this project?
Our intensive participation in the Desertec initiative and projects should not come as a surprise. In 1855, it was Siemens that completed the first telecommunications mega project – the telegraph line from Finland to the Crimea, covering a distance of 10,000 kilometers. In 1859, Werner Siemens conducted a project in Suez where he laid telegraphic cables beneath the Red Sea, linking Europe via Suez and Adan with West India. In 1874, it was Siemens that connected Europe to North America with the first trans-Atlantic cable. And today, it is Siemens that is implementing one of China’s longest and most efficient electricity superhighways. Looking ahead, generating power in the desert and bringing this power to Europe via an ultra-efficient transmission system – that’s a job made for Siemens. Siemens is a world leader in offshore wind farms and steam turbines for solar thermal power plants and can supply the key components for Desertec: high-voltage direct-current transmission systems as well as steam turbines, solar receivers and the instrumentation and control equipment for solar power plants and wind farms.
In an article that was recently published, the energy demand of Europe will be met by solar panels that will be established in Sahara Desert. In your opinion as a businessman, what kind of obstacles will face the project?
Desertec is a climate saver and a brilliant example of how to tackle climate change with projects that are both visionary and implementable. This project has been in the drawer for 30 years and can now be realized at last due to technological advances. The world’s desert regions harbor vast reserves of energy: here the sun is available for producing electricity more than 4,800 hours a year. Desert regions receive more energy in six hours than the world consumes in a year. It’s also possible to install offshore wind farms in the coastal regions of Northern Africa. We must leverage this potential. Industry and governments must proceed courageously and jointly – and Siemens intends to be in the vanguard.
How large is Siemens share in the Egyptian market?
We have strong roots in Egypt where Siemens has been present since 1901, which is a source of pride and demonstrates our very strong and consistent commitment to the region. Over these more than a hundred years, Siemens with its fantastic Egyptian engineers have played a key role in helping build the infrastructure and were involved in a large number of infrastructure projects in Energy, Industry, and Healthcare where we also hold leading positions. More than one third of today’s electricity in Egypt is already being generated through Siemens gas and steam turbines. Additionally we have signed a major four-year long operating plant service agreement for six gas turbines and for air and gases insulated switchgear turnkey projects in 2008 and contribute to the new high-voltage substations where we are using products that are manufactured here in Egypt. Our Mobility Systems participates in upgrading the safety of Egypt’s railways and we are involved in the Shoubra El-Kheima Water Treatment Plant in terms of its rehabilitation and extension, in order to serve the increasing water demand of Cairo. And let me also mention a complete diagnostic imaging and oncology treatment solution, which was ordered by the Ministry of Health.
Experts claim that Egypt’s natural conditions are ideal for the development of wind and solar generated power. How feasible is it for Egypt to become an exporter of renewable energy in the future?
Egypt enjoys excellent wind conditions, particularly in the Gulf of Suez, where average wind speeds reach over 10 m/sec. There is a potential of Wind Energy in Egypt for up to 20,000 MW, which puts Egypt at the forefront in the region regarding the potential perspective. Furthermore, as per the German Federal Ministry for Environment and the German Aerospace Center study for 25 countries in the MENA Region, Egypt holds a number 1 position for photovoltaic and is among the top 4 for solar with a potential of 74000 TWh/year. Therefore, I am sure that Egypt is going to play a key role in the development of renewable energy and using it in Egypt and exporting the over supply to Europe. But let me add that investments to expand and improve the connectivity between the Egyptian’ Electricity Grid and the Regional Grids are therefore of utmost importance.
With domestic demand for oil and gas set to rise exponentially, what role could alternative energy sources play in the future of power generation in Egypt?
The demand for electrical power generation in Egypt is currently increasing by some 10 percent and is expected to grow still between 6 to 7 percent over the next 10 years. The Egyptian Ministry of Electricity has announced ambitious plans to increase the domestic electricity production and Siemens can certainly help to meet these goals. The task will be to develop a reasonable energy mix including renewable and fossil energy sources.
How can Siemens in Egypt support the achievement of the expected target to produce 20 percent of energy from renewable by the year 2020?
The current measures to promote and attract large wind operators to invest in Egypt are good and very promising. However the know-how of the renewable energy industry in Egypt could be further developed via cooperation with international organizations in order to transfer additional expertise and investments into the country. Siemens would be willing to embark on those opportunities and invest in Egypt given the availability of a sustainable market and has already taken the first step by participating as investor in the Wind IPP for 250 MW at Gulf of Suez. And let’s not forget about the fact that it is not only about constantly increasing the energy production but also to save energy wherever this is possible.
What are your plans for this year?
We see three major global trends with massive growth opportunities and have clearly aligned the company with these trends of our time: The first one is climate change, which will make environmental technology the leading industry of the 21st century. At Siemens, green, energy-efficient solutions are already generating a quarter of our total revenue. And this is increasing every day. We have the largest portfolio of green technologies in the world. In spite of the current economic crisis, we aim to increase our revenue from €19 billion in 2008 to €25 billion in 2011. In addition to climate change, we see two other trends that Siemens began addressing quite some time ago: shifting demographics and increasing urbanization. Already today, more people live in cities than in rural areas, and life expectancy is continually increasing. Megacities such as Cairo face major challenges. Residents expect a good quality of life. They need clean air to breathe, good water to drink and reliable electricity to power their lives. People need healthcare. They also need to be mobile and have adequate transportation systems in place. All of these needs have to take into consideration today’s restraints in city budgets. Our solutions can help to cope with these major challenges.
There is still no grid to transport the electricity generated by these future power plants. Also, the countries of the region are under-equipped, often in conflict and far behind in renewable energies. Thus, how viable is your project?
The technology required for implementation is already available: solar thermal power plants have been tried and tested for 20 years. In addition, large amounts of electricity are already being transmitted over great distances with low loss over so called electrical highways. We already implemented them in China and Australia. They allow to efficiently transporting electricity over great distances of up to 2000 Kilometers and more. So – we already have the solutions – they just need to be implemented.