Climate Confident

Doubling Grid Capacity: The Race Against Time with Siemens' Grid Software CEO

December 13, 2023 Tom Raftery / Sabine Erlinghagen Season 1 Episode 149
Doubling Grid Capacity: The Race Against Time with Siemens' Grid Software CEO
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Climate Confident
Doubling Grid Capacity: The Race Against Time with Siemens' Grid Software CEO
Dec 13, 2023 Season 1 Episode 149
Tom Raftery / Sabine Erlinghagen

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 In this Climate Confident episode I had the honour of hosting Sabine Erlinghagen, Global CEO of Siemens Grid Software to dive deep into our modern energy transition.

In this special edition, sponsored by Siemens Smart Infrastructure, we peeled back the layers of the Siemens Infrastructure Transition Monitor 2023 report. Sabine shed light on the urgent need for upgrading grid infrastructure to support the ballooning demand for renewable energy, and to help us transition away from fossil fuels as agreed at COP 28 earlier today. This will require a monumental effort to double grid capacity in the next seven to twelve years! This conversation highlighted that grids are a bottleneck in our journey towards net zero.

We also talked about the critical role of data in grid operations. It's fascinating how the traditional, data-sparse approach to managing distribution grids is undergoing a transformative change. The power of smart meters and AI in managing this complexity cannot be overstated. 

But it's not all challenges and hurdles; there's a note of optimism too. We delved into the potential of small, independent decisions in driving a faster adoption of renewables. It's about empowering everyone to be part of this transition.

I urge you all to listen to this episode. It’s packed with insights that are crucial for anyone keen on understanding the nuances of our energy future. And, as always, I look forward to your thoughts and feedback. Let's keep the conversation going!

For a deeper dive on this important topic, check out the

What If? So What?
We discover what’s possible with digital and make it real in your business

Listen on: Apple Podcasts   Spotify

Support the Show.

Podcast supporters
I'd like to sincerely thank this podcast's amazing supporters:

  • Lorcan Sheehan
  • Hal Good
  • Jerry Sweeney
  • Andreas Werner
  • Devaang Bhatt
  • Stephen Carroll
  • Marcel Roquette
  • Roger Arnold

And remember you too can Support the Podcast - it is really easy and hugely important as it will enable me to continue to create more excellent Climate Confident episodes like this one.

Contact
If you have any comments/suggestions or questions for the podcast - get in touch via direct message on Twitter/LinkedIn.

If you liked this show, please don't forget to rate and/or review it. It makes a big difference to help new people discover the show.

Credits
Music credits - Intro by Joseph McDade, and Outro music for this podcast was composed, played, and produced by my daughter Luna Juniper

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Send me a message

 In this Climate Confident episode I had the honour of hosting Sabine Erlinghagen, Global CEO of Siemens Grid Software to dive deep into our modern energy transition.

In this special edition, sponsored by Siemens Smart Infrastructure, we peeled back the layers of the Siemens Infrastructure Transition Monitor 2023 report. Sabine shed light on the urgent need for upgrading grid infrastructure to support the ballooning demand for renewable energy, and to help us transition away from fossil fuels as agreed at COP 28 earlier today. This will require a monumental effort to double grid capacity in the next seven to twelve years! This conversation highlighted that grids are a bottleneck in our journey towards net zero.

We also talked about the critical role of data in grid operations. It's fascinating how the traditional, data-sparse approach to managing distribution grids is undergoing a transformative change. The power of smart meters and AI in managing this complexity cannot be overstated. 

But it's not all challenges and hurdles; there's a note of optimism too. We delved into the potential of small, independent decisions in driving a faster adoption of renewables. It's about empowering everyone to be part of this transition.

I urge you all to listen to this episode. It’s packed with insights that are crucial for anyone keen on understanding the nuances of our energy future. And, as always, I look forward to your thoughts and feedback. Let's keep the conversation going!

For a deeper dive on this important topic, check out the

What If? So What?
We discover what’s possible with digital and make it real in your business

Listen on: Apple Podcasts   Spotify

Support the Show.

Podcast supporters
I'd like to sincerely thank this podcast's amazing supporters:

  • Lorcan Sheehan
  • Hal Good
  • Jerry Sweeney
  • Andreas Werner
  • Devaang Bhatt
  • Stephen Carroll
  • Marcel Roquette
  • Roger Arnold

And remember you too can Support the Podcast - it is really easy and hugely important as it will enable me to continue to create more excellent Climate Confident episodes like this one.

Contact
If you have any comments/suggestions or questions for the podcast - get in touch via direct message on Twitter/LinkedIn.

If you liked this show, please don't forget to rate and/or review it. It makes a big difference to help new people discover the show.

Credits
Music credits - Intro by Joseph McDade, and Outro music for this podcast was composed, played, and produced by my daughter Luna Juniper

Sabine Erlinghagen:

We are roughly thinking about doubling the grid capacity in anything between seven and 12 years in many countries. So the way I think about it, we've built a grid in the last hundred years, and now we have to build it again in the next 10. So the challenge is enormous.

Tom Raftery:

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Climate Confident podcast, the number one podcast showcasing best practices in climate emission reductions and removals, and I'm your host, Tom Raftery. Don't forget to click follow on this podcast in your podcast app of choice to be sure you don't miss any episodes. Hi everyone, and welcome to a special edition of the Climate Confident Podcast. Today's episode is sponsored by Siemens and with me on the show today, I have my special guest, Sabine. Sabine, welcome to the podcast. Would you like to introduce yourself?

Sabine Erlinghagen:

Hi everyone. Sabine. Sabine Erlinghagen. I'm the global CEO of, Siemens Grid Software.

Tom Raftery:

Fantastic. And Sabine, one of the reasons you're on the podcast today is because Siemens recently produced a report, and I have the name of it here in front of me. It's the Siemens Infrastructure Transition Monitor 2023 subtitle, the Great Divide on the Path to Net Zero. Can you give us an overview of the kind of key findings of the report, particularly as they relate to your own kind of area of grid infrastructure and renewable energy integration?

Sabine Erlinghagen:

Sure. I mean, what we did in that report is actually interview and ask 1,400 executives globally to understand what are the challenges in the energy transition or better in the infrastructure transition more broadly, because it touches literally every part of of infrastructure in all countries. So 1,400 executive basically responded to us that they absolutely believe that decarbonization path is decarbonization strategies and the right infrastructure are to be a competitive advantage going forward. But also only half of them shared that they don't think that their countries are yet on a successful path to get that competitive advantage. So there's a lot of work to be done, and specifically the area that I work in most is, grids. So electricity grids, both the transmission grids for the high voltage as well as, as far as the distribution grids and the numbers of how much work there is to be done to make a successful energy transition is really amazing and, the report sheds quite some light on, on the challenges, but certainly also on some solutions.

Tom Raftery:

Fantastic. And I'll put a link for people who are interested to that report so people can have a, a browse uh, in their own time. But can, can you give us an idea for, well, let, let's, let's talk about, grids because that's your area of interest and that's, that's what we're, that's what we're here to talk about today. I've had guests on the podcast before who have referred to the grid as being kind of a bottleneck in the energy transition. Is that something that you'd agree with? And if so, what do you see as the most kind of pressing challenges currently facing the grid sector in the context of renewable energy expansion?

, Sabine Erlinghagen:

I would 100% agree. And I've, I've said that publicly multiple times, and it's an underestimated bottleneck because most of the time when we think about decarbonization, we think about offshore wind or solar panels, or we think about how we insulate houses better and or do energy reduction measures. But ultimately., if you wanna get to clean forms of energy, you get away from oil. You get away from gas for heating, for transport, for a lot of industrial processes, and you replace it by electricity. But the thing with electricity is it's produced somewhere and it's consumed elsewhere. So the grids need to keep up with that. Just to mention a few numbers, we expect that, the energy or the electricity consumption to be precise will go up threefold by 2050. And if we only look at grids at the needed capacity in the more near term, we expect that grids need to double their capacity in seven to 12 years in many countries. So Norway says seven years. Some other countries say 12. Some are a little bit more relaxed, but it's all very short times if you think about building out infrastructure in cities, in places where you don't have space where you need permissions, but you need supply chain and, and so forth.

Tom Raftery:

Okay. And can you, you know, not, not everyone who listens to this podcast might be as au fait with energy systems and electricity and grids as as you are. Just for people listening, could you kind of differentiate the difference between energy and electricity as you've, as you've mentioned there, and also talk about how, you know, primary energy, uh, versus electricity differs in terms of the amount required.

Sabine Erlinghagen:

I think by and large you can put a, a fuel into your car. I mean, that's the, the easiest thing to, to think about the difference, right? You put the oil into your car in the form of gasoline or diesel, and, and you run your car based on a combustion engine, right? And you produce the energy in that means. If you have a battery, you can use electricity. And that electricity has many ways of being produced. And of course you can also have a gas fired or a coal fired power plant producing the electricity. Then it's not green, but with a electricity, you have the chance of having a green option, which you don't have if you run your car on, on classical gasoline. So that's why this transition to electricity gives you a green choice, which is wind, which is solar, which is hydro plants and and so forth. And that's why the pathway to Net Zero really relies on, we call it the electrification of everything. So everything running electric. You see the same discussions on heat pump versus, gas heating. So if it's gas, it's never green. Or it's natural gas, it's never green. And with, heat pumps, you have electricity. And electricity again, has a, has a green option. And, and that's why this form of energy gives you an option to do it carbon neutral.

Tom Raftery:

Yeah, and electricity is generally far more efficient than most of the other forms of of energy, and so electrification means that actually the amount of energy we consume could fall significantly while increasing the amount of electricity consumed, correct?

Sabine Erlinghagen:

Yes, that's very true because I mean, obviously if you run a gas plant or a coal plant, there's a certain loss in that process, and the degree of efficiency is much lower as if you do it directly via the electricity route. So, that's certainly true. And the same, by the way, is an argument on the hydrogen piece as well, right? If you would heat let's say a city with one with heat pumps and you use one windmill for that, if you would heat the same city with hydrogen, you would need five windmills for that to produce that hydrogen in a green way. it's the same ratio type of question of just getting the efficiency as high as possible, with the energy hungry world that we live in.

Tom Raftery:

Yeah. And it's a similar one for electric vehicles as well. I think it's two to three wind turbines for a hydrogen fuel cell vehicle versus one for a fully electric car. It's, yeah, it, it's, it's a fascinating space to watch. In terms of management, what are some of the best practices emerging, you know, across the industry for grid management in integrating renewables like wind, solar, and distributed energy sources?

Sabine Erlinghagen:

I mean grid management In the past, if you imagine what it was, it was kind of, you know, there are like, let's say 10 big power plants, where you know the characteristic really well and they're in your territory, and then you distribute that energy to households who have very foreseeable patterns of consumptions by and so the task was never to be underestimated, but compared to what it is becoming, it's actually, it has been easy compared to that, because now we have millions of power plants in the distributed energy world with millions of solar panels, batteries charging forth and back, on, on EVs, in the future. So the complexity of managing a grid is increasing by far is not only because of the distributed nature, because also because of the intermittent nature of those resources. Because obviously the sun is not always shining, the wind is not always blowing. And there's a lot more effort and management of complexity needed in order to still keep those grids stable. And there's a big focus here on distribution grids. While so far we've been managing the transmission grids, which is the high voltage lines. And we've been, the, the distribution grids have really been just there to distribute and, didn't have a big challenge on grid stability or anything.

Tom Raftery:

But now they are, as people have solar panels on their roofs and things like that. Is that what you're saying?

Sabine Erlinghagen:

Yes, yes. So the distribution grids is basically what your homes, or smaller shops or, smaller industrial sites are connected to, and all of the sudden they come less predict, they become less predictable, and they become active players in the network. And if you think about what this does to grid planning, grid operations, and grid maintenance, it's very, very significant. We tend to say that we actually flip the grid on the head from a management perspective and that basically shatters all the paradigms that you had before in how you manage grids. And that's a very significant change. And obviously software can play a big role to handle complexity software, including obviously smart algorithms, AI, but in the first place, managing the grid without software has never been possible, but now it's becoming paramount, because the experts are just getting overwhelmed with the amount of information that they need to process.

Tom Raftery:

Okay. And it, it, it's all down because the grids have to be balanced at all times. And as you mentioned earlier, if you have, you know, a grid with 10 power plants, uh, and then millions of consumers. That wasn't too challenging because at least you knew that the generation side of it was stable and the consumption side of it, the demand was variable but predictable. But now we've moved to, as you said, where you have thousands, potentially even more of generators. As well as the millions potentially of consumers demand. And so you've got massive variability on both sides. And so yeah, I can see how software is vital. There's, there's no one who could be flipping enough switches, to, to do this manually. So absolutely it has to be done. Uh, Where, where do things like interconnects fit in in all this? Because as you said, and I've said this before in the podcast, yeah, sure. The sun isn't always shining and the wind isn't always blowing. But it is, the sun is always shining, in fact. Just maybe not here. Uh, And the wind is always blowing. Again, just maybe not here. So, you know, how do inter, how do interconnects fit into this?

Sabine Erlinghagen:

We had a, a professor from the Potsdam Institute of Climate Change, visiting us. And he said exactly the same thing that what you're alluding to, which in principle it means if you look at it at a continental scale. So for Europe, for the US, for South America and so forth. Then it's for North America to be precise, then the wind is blowing somewhere, always, and the sun is out there somewhere, always. So, if we look at the systems from a large enough lens and we get the coordination across. Actually the tasks become, becomes much easier. And luckily in, in Europe we are pretty well set up for that already. If you look at the control centers for the high voltage lines, they're actually already having a view on the entire grid of Europe. So you can, from Portugal to Ukraine, you can see the situations in the grid and you can see things coming. If there's a problem and if that is propagating through the grid across countries, and that enables countries or individual zones for certain parts of the grid to help up each other out. It was just with one large grid operator in, in Germany as well, and they said the amount of exchange that we have today is like unheard of from what we did in the past. In the past we operated our grid and we were fine. Today we are constantly asking for help, left and right, or we are providing help left and right, just to keep the overall system, stable in an efficient way because that, that's the next, point maybe how to do all of that in without letting the cost explode and it taking for ages.

Tom Raftery:

Sure, sure. And I'm based in here in Spain, and there's the Red Electrica De España who manage the grid here. And on their website you can see, you know who they've bought energy in from, typically France and Portugal, and who they've sold energy to, typically, France and Portugal. Sometimes in Morocco as well, both ways. But in the same day, you can see that they've sold in, in some part of the day and they've bought in, they've exported and imported diff at different times of the same day. So it's, it's a constant kind of juggling match. I assume Red Electrica De España is not unusual in that. I'm sure that's the same for most grid operators, correct?

Sabine Erlinghagen:

That's very true. And I mean, there's different, patterns to that. Also, if you look at the different seasons in the year, because some countries use electricity for heating, then the demand is higher in winter. Some use electricity for cooling than their demand and so forth. So there, there are some patterns and there's quite a good level of coordination among, transmission grid operators in Europe already. But if you look to the US and some of the the audience might have watched Bill Gates making pretty significant statements about the grids. Then the US is not as well coordinated across their own states. And they are benefiting or working on, from bigger coordination for the sake of higher efficiency in the end, because otherwise you run suboptimal as, as you said earlier,

Tom Raftery:

Yeah, yeah, yeah. We all saw what happened in Ercot, the, the Texas grid a a few years back when the, the, they had the big freeze. Yeah, yeah, yeah. And that's a very isolated grid.

Sabine Erlinghagen:

Yes. And, and that's even a funny story because Texas did decide to be isolated and not to interconnect for interesting reasons. But that comes at a pretty high cost, either it comes with more outages. Or it comes with a system that you need to lay out for every kind of, extreme situation that you could ever think of. So either it increases the cost or it increases the outages. So the collaborative model between larger pieces of the US has its benefits, and that's true for US and also for Europe.

Tom Raftery:

And where, I mean, it's not just interconnects for, for keeping stability. One of the other big levers that grid operators. Grid operators can start using or have been using for, for a number of decades, depending on the type is storage. And when I say the, the type you've have, you have pumped hydro is one that has been used for many decades. I remember there was a pumped hydro station built in Ireland back in the late sixties, early seventies, and I think it was 250 megawatt hours in Turlough Hill. Built for many millions of pounds back then. But now we're starting to see with the likes of lithium ion batteries and I had a, a podcast episode a few weeks back around vanadium flow batteries, for example. These kind of things are now starting to make themselves felt on the grid as well. How do you see their role in in grid stability?

Sabine Erlinghagen:

I, I think they're absolutely vital. I mean, to what extent and, like what's the exact mechanism is something that the industry is still figuring out, and also what's the best technology to do that. But you can definitely see that everybody who has pumped hydro is, like in a very, comfortable situation because creating pumped hydro these days is a very, very difficult thing. So batteries are much more straightforward. And if you look at, I mean, we work quite a bit with California ISO and, and they use batteries, quite significantly already in terms of megawatt and megawatt hours, on their grid. Also like anybody is, like everybody is, is discussing that, and sometimes the regulation is more favorable in order to execute that fast. And sometimes, regulation makes that much harder because . for those who are not that into that much, into grids, a grid operator by definition is a, is a monopoly. And they typically cannot run any other business model than just providing infrastructure and, stable grids. And, having a commercially, operated battery is not always falling into what they can do.

Tom Raftery:

Right. Interesting. Okay. And what about data? Because, you know, data is starting to impact on everything now. How, how critical is data utilization and grid operations, and what innovative approaches are being adopted to maximize grid efficiency using data?

Sabine Erlinghagen:

Yeah. I mean, we've been talking a lot now about transmission grids and the high voltage lines, and that's what people typically think of because that's the most visible part of the grid and the most impressive maybe, in terms of size. And in the high voltage grids, you have a lot of data traditionally, and you, you manage your grids, based on that data. Like every minute, every second, 24 7. When we now get to distribution grids, which is more than 50% of, of the grid, when you, you count it in kilometers, then, that's where the fun starts, let's say because traditionally you don't have any data. Traditionally this is assumed to be a copper plate. That means electricity is just flowing and you don't actually observe the electricity to to flow, so you don't know. You just assume where like, at which part of the grid, the grid is loaded. How much? So for instance, if you boil it down to a transformer that might be at the end of, of your street, then a grid operator wouldn't know how much capacity of that transformer is used at any given point in time. So they might kind of go there, look into it once a year and see like what was the maximum load, but they've no transparency on typically of, of what's happening there. Now, thinking about how I can increase capacity and how I can manage a grid successfully, which has become so complicated, I need to know. I cannot just blindly let it flow. I need to know how loaded my transformer is. I need to know whether there's 5% capacity left or 60% of capacity left. And, that is where data comes in. So now you need to make sure that you get the data, you process the data, and you make meaningful insights out of that data in order to take decisions for both planning purposes. So where do I need to increase my grid? Or increase the capacity and, but also for operations purposes, what do I need to do? Where do I need to counteract in order to keep that grid stable and to have power flows run efficiently?

Tom Raftery:

Okay, and how are we collecting this data and how do we use that then to increase capacity on the grid?

Sabine Erlinghagen:

Great question because there's a traditional approach and, and a new one. The traditional approach would take the paradigm that we've always had. We put sensors everywhere, right? Every transformer a sensor and, but the thing is this is a very slow approach and also a very costly approach. If I take the vast grid that, we have in a lot of cities, then rolling out sensors there and installing them everywhere. I mean, it's a lot of, equipment, it is a lot of logistics. It's a lot of people involved. So that, that, that is the first reflex of everyone. We would argue that there's smarter ways of doing that. And we do actually have sensors out there, which is the smart meters.

Tom Raftery:

Right.

Sabine Erlinghagen:

Um, and so far we've been completely underusing those sensors. And we've also been underusing the power of software and the power of artificial intelligence to make sense of that data

Tom Raftery:

Okay.

Sabine Erlinghagen:

The interesting thing is there's where the paradigms are shifting. You might not be as accurate as you are in the transmission grid. But it also doesn't matter. If I don't have transparency at all and I can increase it by 95%, I have 95% more and I shouldn't complain about the 5% that I still don't have. So that's a really, really interesting discussion these days. Or also a very interesting proposition that we are making to the market is to really attack the problem of especially low voltage. So we go from high to all the way down to low voltage, transparency and understand and manage those grids at the lowest voltage levels in a and the DERs in a very professional way.

Tom Raftery:

Okay. And just to kind of give some context, can you again, remind people why it's important to increase the capacities on the grid, how much we need to increase it, and by when, you know, what kind of the timeframes and, and the challenges are, because one of the big challenges for infrastructure is getting regulatory sign off, right?

Sabine Erlinghagen:

Yes. So I mean, we said in the beginning of our conversations, we are roughly thinking about doubling the grid capacity in anything between seven and 12 years in many countries. So the way I think about it, we've built a grid in the last hundred years, and now we have to build it again in the next 10. So the challenge is enormous. Now, if I think about doubling capacity, just by putting out more lines, putting out more cables, it's a huge task. But if I think about, Hey, how loaded is my transformer actually? Like, oh, I still have 60% capacity as a buffer in my transformer. Maybe I can use a little bit more of that transformer safely without risking grid stability issues or anything. Maybe I can man, like ask some prosumers as we call 'em. So EV drivers, people who have a heat pump and so forth. Maybe I can ask them to shift a little bit load to like occupy that transformer still in a safe way. But the basis for that is transparency. So the kind of understanding what's happening in the grid is like, there's a, a saying what you can't measure, you can't manage. And that applies to grids as well. So if we have the, the challenge of doubling grid capacity, we should better look at where we still have some capacities left that we are not using, or using as a buffer so far, because that's likely the fastest possible way to increase the capacity.

Tom Raftery:

Makes sense, makes sense, and

Sabine Erlinghagen:

and,

Tom Raftery:

on.

Sabine Erlinghagen:

yeah. One more thing because that's, a super interesting stat. I mean, we talk about decarbonization. There is terawatts, of renewables waiting for being able to connect because of missing, grid capacity. So it is not only inefficient, like how do I not spend the money to extend my grid physically, but the speed matters. If we have wind parks that are not connected. If we have PV owners who call their utilities and, and don't get the connection of their PV on their roof, we are losing momentum. We are creating frustration. We are diverting the investment and we are really getting back to what you said initially. The grids are becoming the bottleneck of the energy transition because those renewables can't connect and factories can't electrify. its missing grid connection.

Tom Raftery:

Yeah, yeah, no, I saw an example of that just here in Spain recently. I go to Cadiz from Seville reasonably often. It's about 120 kilometers from from Seville, Cadiz, and on the road there between Seville and Jerez on the lefthand side of the motorway. There's a wind park, a brand new wind park. It was only built in the last 18 months, and they are enormous, enormous turbines. There, there's a lot of, wind generation here in the south of Spain particularly, Andalucia around the Cadiz area, but this new wind park or the largest turbines I've, I've seen, I think. And they were up probably eight months or so before they started spinning. And I'm guessing it was that, I'm guessing it took a while to get them connected to the grid for whether it was regulatory reasons or whatever, or capacity. But I, I passed them yesterday, and yesterday the first time I saw them actually spinning. So that was great to see.

Sabine Erlinghagen:

Yeah, I, I would agree. I, that would be my first suspicion as well, that this was because of missing grid connections. If you look at a major provider of data centers actually, told me that one out of three criteria for where they locate their data center, was grid connection.

Tom Raftery:

Yeah.

Sabine Erlinghagen:

So, and I mean, data centers with AI, consumes an X fold of energy of electricity then normal data centers, so the the the data centers like in terms of electricity consumption, their entire states by now, if you, if you make the math.

Tom Raftery:

Yeah. Yeah. And in fact, I'm a, I, I have a background in data center development, which is kind of irrelevant to this generally, but, one of the things that I remember thinking about at the time was data centers are a massive battery. And so they could take part in demand response programs quite easily because they've got generation on-site and they've got batteries on-site, so they could very easily go off grid at times of peak demand and you know, take on board any credits or anything that they get for that. But like I say, that's, we're going way off topic now.. Um.

Sabine Erlinghagen:

It, it, it's an interesting thing though I, because I asked that, person from that big data center company and asked like, Hey, but you are so big, if anyone, I mean, why don't you just produce your electricity yourself? You make yourself autonomous and you, you don't need a grid. Like if, if that is one of your biggest bottlenecks and the biggest criteria for looking for where to build the next location. And then, she said., this is not possible. We are consuming so much, and the level of reliability that we need is something that we can't produce ourselves. I mean, yes, you have a backup generator of course, but that will only get you through to a certain period of time. And the stability that a proper and well-managed grid provides is something that even the, the hyperscalers can't produce themselves. So that was a pretty impressive statement because of like, I hear that argument so often, but then we just make ourselves independent, of the grid. If even one of the hyperscaler tells you that they can't, then I assume there there is an advantage of public infrastructure and I mean, we were talking about Infrastructure Transition Monitor in the beginning. It really is that level of competitive advantage. If you have a great infrastructure as a country or as a, as a region, then it, it does matter for attracting, attracting industry for like creating workplaces. So it, I think it's, it is an impor underestimated topic.

Tom Raftery:

Yeah. Fair enough. Fair enough. Can you talk to me a little bit then about the role of cross industrial collaboration in driving the energy transition? And if you have any good examples that you can, you can talk to, that'd be fantastic.

Sabine Erlinghagen:

Absolutely. I mean you're touching upon a a great point 'cause I mean, we've, we've highlighted the challenges, of the energy transition, especially on grids, especially on bringing transparency to the grids, being able to manage grids better. If you look at that, more closely, you actually start to understand how big of a task that is. Just to think about a utility, I mean, it's, you ask a utility both to be great in consumer engagement, great in kind of communicating to you, to the household to do give me hints for how I save energy. And, and, and really have that engagement level on the other hand side, you look for a super stable control room, and the pros in running the grid stably, understanding every outage, coordinating with the surrounding grid operators. So. there's a lot of, kind of the, the task at hand is, is really big to transition, that way of managing grids from like marketing in consumer end to, hardcore control room if you like. And then if you look at the collaboration between utilities, you have the high voltage needs or the transmission needs to collaborate with distribution. The transmission operators need to collaborate across and we as technology providers need to collaborate in order to make it easy for those utilities to to get their digitalization strategies realized. That's why I think we all need to join forces. Like my team is working on that heavily, to really partner and team up and, get the speed into this industry. I mean, if anything, this industry has never been fast. And, and you can only get fast if you, if you take out the complexity and, run collectively into one direction and just get certain processes done much, much faster.

Tom Raftery:

Cool, cool. Sabine, we're coming towards the end of 2023, and so this is kind of the traditional time of year for asking for predictions, so . What would be your predictions for the grids of 2024 and beyond?

Sabine Erlinghagen:

Look, I, I think we are looking at an exponential development here. And we've just, I mean, in, in Corona, we unfortunately learned what exponential means. So you don't see nothing until you, it's too late. And the same is somehow true for grids. This shifting towards distributed and renewable energy resources, the proliferation of electric vehicles. There will be that inflection point, and we are at it, or nearing it, much closer than we would intuitively think. And then it's very difficult and, potentially too late to react. So we already see renewables not being able to connect. We already seeing quality of service going down. We already see rates going up. So there's very little time if no time left to react. And every estimate on how DERs, EVs, heat pumps, you name it, have been corrected upwards in the la last couple of years. And it's even in a pace of six months now that you're correcting those upwards. So I think we will see a dynamic imminently, that, we might not have expected.

Tom Raftery:

and do you think we'll get to triple the renewables by 2030 as the, uh, as people are saying we need to?

Sabine Erlinghagen:

I am an, uh, eternal optimist and I do believe in the power of small independent decisions, so I'm not necessarily betting on only on the big wind farms and the offshore wind parks and so forth. I think the power of. I mean, I just look out of my window here and there's still so many roofs that don't have pv and the, the economics of that I just come back from, Estonia and of all countries. I mean, Estonia, that's up in the north there somewhere, right?

Tom Raftery:

The Yeah.

Sabine Erlinghagen:

yeah, the Baltics and they had in summer, 78% of their, electricity in one day, provided by solar,

Tom Raftery:

Wow.

Sabine Erlinghagen:

Estonia solar, right? And the, the grid is, has seen an ex like 15 x increase in connection requests for solar, just wi within two years. And it's a lot of independent decisions by independent house owners and so forth. So those types of independent decisions can give you a dynamic that can be extremely fast. Think about the iPhone at the time, right? Nobody had a smartphone and all of a sudden everybody had smartphone. Like the investment cycles for cars are a little bit longer than for phones but there will be that tipping point. Same thing with heat pumps. Same thing with solar. It's independent decisions. And as soon as they make commercial and societal sense people act very quickly. And, and then you get that kind of exponential growth curve in motion. And again, I'm an eternal optimist, for people to take the right choices.

Tom Raftery:

Good. Good, good. We're coming towards the end of the podcast now, Sabine. Is there any question I didn't ask that you wish I had or any aspect of this we haven't touched on that you think it's important for people to be aware of?

Sabine Erlinghagen:

I think we co covered many things. I think the thing to maybe to think about is, is speed and collaboration, and what it takes. I'm a technology provider, so I can't help it. So what it takes is really an open approach to technology, a flexible approach, a modular approach to, to everything, from IT to OT to IoT. Because that in, in the end, enables the power that software can unfold, the power that digitalization can unfold. And if we get an agreement, across vendors, across parties, that we standardize, we are open,. we can click and connect. I mean, we've seen that with a lot of standards around the world. Then we can be very fast and, if anything, we don't have is time.

Tom Raftery:

True, true, true. Fantastic. Sabine, that's been really interesting. If people would like to know more about yourself or any of the things we discussed on the podcast today, where would you have me direct them?

Sabine Erlinghagen:

I mean, the energy transition report is certainly a great one. I was fortunate to also share some of my thoughts there. And then of course, the Siemens website, and also the accelerator view on that. That's our digitalization brand. Both are great places. And of course LinkedIn, if you wanna catch me personally.

Tom Raftery:

Perfect. Fantastic, Sabine, thanks a million for coming on the podcast today.

Sabine Erlinghagen:

Thank you.

Tom Raftery:

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about the Climate Confident podcast, feel free to drop me an email to tomraftery at outlook. com or message me on LinkedIn or Twitter. If you like the show, please don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.

(Cont.) Doubling Grid Capacity: The Race Against Time with Siemens' Grid Software CEO

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