José Aparicio
President and CEO Mexico, Central America and the Caribbean
Siemens Energy
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View from the Top

Technology Giant’s Energy Spin-off Stays on Top of Transition

By Cas Biekmann | Wed, 03/03/2021 - 12:46

Q: How is Siemens Energy operating since it was spun off in 2020?

A: Siemens Energy became a separate, fully integrated energy company when we were listed on the Frankfurt Stock Exchange on September 28th, 2020, Siemens Energy itself is divided into two reporting groups, one of which is focused on Gas and Power and the other on renewables. Within Gas and Power, we have three main divisions: Generation, Transmission and Industrial Applications and a New Energy Business, which focuses on applications such as hydrogen for the energy transition. Then, we have Siemens Gamesa Renewable Energy, focused on the renewables area. Siemens Energy holds a majority stake in the company.

In this decade, we are in a process of transition regarding energy, with drivers like climate change and decentralization. Energy demand also continues to increase. Living with the pandemic has also shaped the way we do things. We want to become the most valuable energy company in the world. We cover the entire energy supply chain, with a broad portfolio of products and services. We are positioning the company to be at the forefront of the energy transition.

 

Q: How did Siemens Energy establish itself in the Mexican market?

A: All of our divisions are present in Mexico and we employ approximately 1,200 people. Siemens Energy has a legacy in Mexico for 126 years. One of the first steam power plants that was built before the turn of the 20th century occurred in Mexico City to illuminate the city. In 1905, we opened the largest hydropower plant at the Necaxa river. I consider this project to be a great example of quality because the plant is still operational and delivering power to Mexico City.

Siemens Energy is located in different parts of the country. We have two production sites. One is located in Guanajuato, where we produce our power and distribution transformers. We also have a plant for high voltage switching products in Queretaro. The company has a Service Center for industrial turbines there as well. Furthermore, we have a large Service Center in Monterrey for large turbines that focuses on applications for CFE and industrials. Our headquarters are based in Mexico City, from where we do sales and support for other Latin American countries. We also have offices in Ciudad del Carmen and Paraíso, to support the oil and gas industry, and we are present in Dominican Republic and Panama as well.

 

Q: Where does the company identify the biggest opportunities in Mexico’s changing energy sector?

A: In the past year, the government has changed its approach to the energy sector but CFE has also announced a list of new energy projects. As a technology company, we are here to support those projects. We are in the process of finalizing some of the power plants that started construction approximately three years ago and which are now starting to become in commercial operation. In December, we supported a large power plant for CFE called Valle de Mexico, located in the north of the country. The plan is to start commercial operations in 2021, and we continue to provide the services to support its installation and operation. We have been working with CFE and other players to provide technology, enhance their cybersecurity, provide advances in combined cycle designs and prepare them to support Mexico’s growing energy demand. Mexico is also part of the USMCA, which should bring some opportunities to the country.

We are here to support projects and promote hybrid systems but we do not only work on energy generation. We are about to commission an important infrastructure project, a large compression station for one of the main operators of natural gas infrastructure in the country. Furthermore, if new power plants are commissioned, transmission infrastructure needs to be constructed or reinforced, and we can contribute to this.

 

Q: How does the company invest resources into its R&D and what are some recent examples of innovation?

A: Invention is in Siemens Energy’s DNA. We have always been at the forefront of innovation, investing to create new portfolios. The company has over 24,000 patents and over 5,000 R&D employees. We also invest a great deal of money in R&D. Our chairman, Christian Bruch, recently said that we should invest over US$1 billion in R&D. We focus on sustainability and creating new innovations for our customers. A good example is a 135MW floating power plant called Seafloat in the Dominican Republic that we will deliver in 2021. It is a highly efficient combined cycle, which incorporates energy storage to make the plant more responsive to variations in the grid. Another example is a project in Chile, called Haru Oni. This project uses our electrolyzer, which we call Silyzers, and a wind turbine to produce green hydrogen. Tapping into the low energy costs in the southern part of Chile, the project will produce e-fuels. The project can capture CO2 from the air, which serves the production process as well. Other example in Mexico in the SGT- 750 we are using additive manufacturing to replace some of the components faster.

We are also proud of our Sensformer, a series of power transformers ready to be connected to the cloud. They provide a wealth of information and allow utilities to operate more efficiently. Another product, Sensgear, can be connected to the grid and provide information in real time, which can help foster a more resilient network. In our office, we have a digitalization room called “Digi Hub” to help visualize and customize the benefits of these solutions.

Innovation is crucial for Siemens Energy and recently, we opened our first Innovation Office in Mexico. This office focuses on the energy transition with universities and other partners such as the German GIZ, which has helped us assess the potential for Blockchain and green hydrogen in Mexico. This is a key part of Siemens Energy’ strategy, as we look to use green hydrogen to fuel our turbines in Latin America. In Brazil, we are involved in a cogeneration facility where the turbines will use 60 percent hydrogen in combination with natural gas. We see ourselves and our customers as part of the co-creation process geared toward this energy transition.

We are also supporting CFE in digitalizing its substations to get more information and become more resilient. We also help deal with intermittency of added renewable energy in the grid and are discussing the potential of hydrogen in the country. This is still in its early stages but we see its potential to complement natural gas in the mid to long term.

For CFE, we have installed a number of high-end combined cycles in Mexico, which are just starting commercial operation. We have finished two projects already, which feature H-class gas turbines. Valle de Mexico will come online in early 2021 and it will also feature H-class technology. Our goal is to help with the energy transition and an important part of this is to be more efficient with electricity production. To this end, we support the private sector as well. We will continue in what we do our best which is supporting our customers, making sure the infrastructure is operating and providing sustainable energy, we have a long-term commitment because Mexico is a key energy country.

Siemens Energy is a spin-off from Siemens created in 2020. It is listed on the Frankfurt Stock Exchange and focuses on four main areas: power generation, industrial applications, power transmission and renewables.

Cas Biekmann Cas Biekmann Journalist and Industry Analyst