Talking business

Utilities Middle East: The GCC is busy adding to its power capacity and networks. Are you seeing good business as a consequence?

Wolfgang Braun: The demand for energy is growing worldwide – a fact without doubt. It is expected to grow at an annual rate of 2.2 percent – and climb from 20,300 terawatt-hours today to 33,000 terawatt-hours by 2030. These are global figures, but for sure the Middle East is contributing to the continuously increasing demand for electricity consumption with an great appetite for energy. Another fact is the need for replacing aging and outdated energy infrastructure.
These will be drivers for good business opportunities in the region. Today we are in a good market position, actually we are already the Market leader in the regional Transmission & Distribution industry market, and we are very confident to strengthen this role in the future.
Allow me to add, that we have 150-years of continuous experience in the Middle East region. Those years have given us an invaluable understanding of our customers and their needs. We played a key role in developing energy infrastructure throughout the region and have maintained a strong, viable relationship with our customers through the years. This in combination with efficient products, solutions and know-how along the entire chain of energy conversion gives us an advantage.
 

UME: Did you suffer a decline in business in the Middle East during the recession?

WB: Siemens has performed well, even in times of economic turbulences when everybody evaluates prudently how to spend money. Some of our customers re-evaluated carefully their planned projects, and we could see some temporary delays. This is not surprising in periods of a changing economic environment. In Dubai, for example, the downturn affected the property sector and some investments in infrastructure.

What we see today gives us reason to be optimistic, because the regional business is gaining momentum. We see utilities expanding their networks, and we expect great opportunities in the growing Oil & Gas industry.

We used the period of economic downturn, to organize ourselves better. Actually, the downturn made us stronger and we are in an excellent shape to serve our customers even better and cater to their ambitious projects.

UME: Which countries are most active in increasing their capacities and why?

WB: Economic diversification and population growth are driving the development of the power sector in this region. All Gulf countries are more or less following the same pattern: They are fast developing nations, and energy is one of the sectors they are focusing on. As a result they are expanding production facilities for oil and gas. At the same time, they consider to develop themselves beyond the role of an exporter of energy who sells products derived from oil & gas.

Qatar for instance is currently contemplating to build up a Gas to Liquid (GTL) industry. Kuwait has already started to build fertilizers and chemical plants, while SABIC is a great example for the diversification efforts in Saudi Arabia. And in the UAE, the further development of the hydrocarbon sector will be considerably influencing the economy in the near future. This will result into a huge electricity demand.

UME: With the grids expanding, are you selling a greater diversity of high voltage switchgear?

WB: Our portfolio includes high end product platforms, systems and solutions tailored to sophisticated customer requirements as well as economic products for standard applications. Thanks to our product mix we are excellently placed at all voltage levels, from 66kV to 400kV. In this context it is worth to mention that not only a greater diversity of high voltage switchgear is required.

In addition, challenging high voltage components like series reactors are required. Just recently we received an order from DEWA for the delivery and installation of five 400kV series reactors. Securing this order was not only attributable to our global engineering expertise, but also to our customer’s high level of satisfaction with the execution of previous projects.

UME: Is there a trend towards a specific kind of switchgear?

WB: Yes, I think so. In this part of the world gas insulated switchgear (GIS) has been the switchgear of choice for many years. Today, the trend goes towards eco-friendly products in general. Customers’ demand for sustainable products is increasing. In this aspect our switchgears have a big plus, because they are manufactured according to ISO 14001 standards along the entire production cycle.

UME: Is switchgear equipment affected by the trend towards smart grids?

WB: Smart grid is analogous to intelligent T&D. Let me illustrate shortly the difference between today’s networks and smart systems.

If you look at traditional power grids, power generation follows load. But in the future, power consumption will follow generation rather than vice versa. Prime examples here are electric cars that can be charged or operated at night drawing on cheap wind power. This means we are heading towards a paradigm shift. Towards leaving – let’s say – unidirectional energy flows behind for bidirectional power flows by Smart grids technology.

A key element of such a grid is an optimal network where the connected components and devices work together in an intelligent way to ensure optimized operation and minimized use of resources.
Intelligent grid solutions are based on the combination of smart network design combined with the state of the art switchgear, controlled by advanced energy management systems. Our smart grid solutions benefit largely from the cutting edge intelligence available in our switchgears.

The functionality of a smart grid is not only limited to the distribution of electrical energy, but it also becomes a central element in active energy management whilst providing full transparency and integration of functions related to generation, distribution and consumption. It is also be a key enabler of future-oriented city functionality as e-cars, e-car infrastructure and smart buildings.

UME: Are there any interesting developments in switchgear technology?

WB: The trend goes towards denser switchgears with even higher ratings and minimized life cycle costs. Especially in growing cities, space means money. So we put a lot of effort into the development of space saving designs that offer both, a compact footprint for the substation and cost reductions, because the need for space is reduced. Today Siemens is leading in optimized small-scale g designs. I believe the Siemens gas-insulated switchgear is the most efficient solution for the customer. Not only in terms of size but also in terms of minimized maintenance intervals and related savings in operational expenditure.