The global electricity demand is growing, as well as the effects of climate change. Siemens Energy is committed to meet this demand while protecting the climate at the same time.
CEENERGYNEWS spoke with Grzegorz Nalezyty, President of the Management Board of Siemens Energy in Poland, about the company’s operations in the country and the role it is playing to energise Central and Eastern Europe.
“At Siemens Energy, we believe that there will be a global discussion, especially about the role that Europe has to play,” Mr Nalezyty says. “Based on the COVID-19 experience, there is a need to increase production located in Europe. Therefore we could help the new industrialisation of the continent.”
In this regard, he believes that gas will help the energy production so the company is looking for partners that would like to use gas for a mid-term use and Siemens Energy can help them build the low-generation gas plant.
“Then, of course, there is hydrogen, which is a long-term perspective, he adds.”
At the beginning of July, the European Commission adopted the long-awaited strategies for energy system integration and hydrogen, to transform Europe’s energy system and reach carbon neutrality by 2050. In particular, hydrogen can be used as a feedstock, fuel or an energy carrier and storage and has many possible applications across industry, transport, power and buildings sectors. Most importantly, it does not emit CO2 and almost no air pollution when used.
“In this regard, we are looking for partners with whom we will be able to implement low-emissions projects and, at the same time, it will be high-efficient energy production, taking out the cost of CO2 emissions,” Mr Nalezyty underlines.
“The future awaits a very modern and digitalised energy sector. The energy infrastructure needs to be more modern and digitalised so to attract more investors and be more competitive.”
As a technology provider, Siemens Energy made an agreement with Polenergia which is an energy producer and trader, to develop modern technologies in the area of decarbonisation of the industry and the power sector. The letter of intent signed by the parties pertains close cooperation in the area of industrial application of high-efficiency co-generation, as well as the introduction of solutions that enable sustainable production and use of hydrogen.
“The next step will be to get support from the European Commission and get funds for hydrogen projects,” continues Mr Nalezyty.
“We already produce green hydrogen which, at the end of the day, is going to be used as a fuel for gas turbines. The goal is to have gas turbines that can fully function burning hydrogen. So, the long-term and sustainable plan includes a change in fuel.”
However, Poland is a particular market. On one hand, the country has experienced strong growth in renewable energy. But, as the International Energy Agency (IEA) noted, coal still dominates the power sector being the largest source of greenhouse gas emissions.
“Poland is still a country heavily reliant on coal,” agrees Mr Nalezyty. “But it is slowly changing. Only two years ago, about 90 per cent of the electricity was produced from coal and lignite while today it is only 70 per cent of the country’s energy mix. Also the share of energy from solar, wind and gas-fired power plants increased.”
For example, he reminded that the government made an agreement for gas supply from Norway. Poland used to have a very small amount of its own gas and was dependent on imports from Russia. Now it can count on an LNG port, the construction of the Baltic Pipe is ongoing and there is a gas supply coming directly from Germany.
“The gas environment is more competitive now, therefore it unlocked the potential of Poland, with a consequent decrease in gas prices and CO2 emissions,” notes Mr Nalezyty.
“Now we hear more concrete discussions about offshore wind projects and there is a very ambitious hydrogen plan. All of this will be followed by specific regulations about new fuels and offshore wind still this year. Therefore, everything that we need for an energy transition to a low-carbon and zero-emission economy will be in place.”
However, Mr Nalezyty asks: what will the cost be?
“In the next decade support under the Horizon 2020-30 programme will amount to 140 billion Zloty (30 billion euro),” he explains. “But we will have our challenges as well. These funds cannot all come from the State, but private investments will also be needed. We cannot forget the social aspect of this transformation, considering the huge numbers of people working in coal mines. At Siemens Energy we want to support Poland’s transition to make it a decarbonised country, bringing a green future and establish the new, modern energy infrastructure, CO2 emissions costs free.”
But Poland has not yet announced that it will close the coal mines.
“It is not going to happen and actually there is no reason for it,” says Mr Nalezyty.
“The project of decreasing energy from coal mines is already happening and together with more investments in onshore wind and solar, a transformation of coal mines will happen. So we do see this as a transformational process instead of revolution.”
Over the years operating in Poland, Siemens Energy didn’t encounter major challenges. The only fact that Mr Nalezyty points out is that the number of gas-fired power plants was less than the company first expected based on the energy mix assumptions.
“But now, also with the Baltic Pipe, the number of possible investments are increasing so now we need to scale up,” he says. “For sure now there are more regulations compared to 5 years ago when we didn’t know which project would last and which one would disappear. Polish companies are now fully ready for future investments.”
And Siemens Energy wants to make its partners strong as well. In July, the company signed a letter of intent with Polimex, one of the largest Polish engineering and construction companies, with regards to the construction of the gas and steam power units.
“With Polimex we started to work on a local level and it is the first company which we are supporting expanding abroad, from Poland to Germany, Benelux and the UK,” reveals Mr Nalezyty. “It is not going to be the last case and we would like to develop in this direction, cooperation at a European level. There are many experienced Polish companies with a lot of competences that we would like to help enter foreign markets as well.”
Siemens Energy believes that such partnership activities give a chance to achieve economies of scale, thus consolidating the efforts of many industries moving towards decarbonisation.
“We are building an ecosystem based on a partnership approach to joint projects on the domestic market, with shareholders whose strategy overlaps with the vision and role of the energy sector in the future,” concludes Mr Nalezyty.