Natural Gas to Hydrogen: Decarbonization with Siemens Energy Canada
Dec 10, 2024
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Arne Wohlschlegel, Managing Director at Siemens Energy Canada, explains vital energy technologies driving decarbonization. He tackles the impact of potential new tariffs on the business landscape and addresses the nuances of generating electricity from natural gas versus hydrogen blending. Arne also discusses challenges in hydrogen development and the urgency of grid technology improvements. Plus, he highlights the future of offshore and onshore wind generation projects, revealing exciting advancements within the energy sector.
Natural gas turbines, with efficiencies around 64%, are crucial for reliable power generation and adapting to decarbonization through hydrogen blending.
Tariffs are increasing manufacturing costs and complicating procurement processes for energy technologies, potentially hindering investment in new facilities in Canada.
Deep dives
The Role of Gas Turbines in Power Generation
Natural gas turbines are pivotal for consistent and reliable power generation, serving as a leading option for baseload supply. Their design allows for rapid construction and deployment, with current production lead times stretching to four to five years due to heightened demand. Siemens Energy manufactures a range of turbines, with combined cycle plants achieving efficiencies of around 64%, significantly higher than traditional simple cycle options. This efficiency, coupled with the ability to blend hydrogen for reduced emissions, positions natural gas turbines as a crucial part of the energy landscape moving forward.
Impact of Tariffs on Manufacturing and Supply Chain
The challenges posed by tariffs are contributing to increased manufacturing costs for energy technologies, potentially affecting market competitiveness. Siemens Energy operates two factories in Canada that produce critical components, including gas turbines and transformers, which are integral to international markets. The uncertainty surrounding tariffs complicates procurement processes and may deter investment in new manufacturing plants in Canada. As companies grapple with these economic shifts, they increasingly consider relocating manufacturing operations to tariff-free regions, which could exacerbate existing supply chain limitations.
Advancements in Grid Technology and Challenges Ahead
Digital innovations are pivotal for enhancing grid technologies, focusing on the transmission of electricity from generation to consumption points. Technologies like dynamic line rating and advanced scanning methods are enabling existing infrastructure to transmit more power without requiring new lines. However, production lead times for essential components such as power transformers have extended to three to five years, raising concerns about meeting ambitious decarbonization goals. The combination of data-driven solutions and efficient demand management is crucial as power demands are projected to rise significantly.
Exploring Hydrogen’s Future in Energy Production
The exploration of hydrogen as a means to reduce carbon emissions reflects a growing recognition of its role in the energy transition, despite current costs being a barrier. Siemens Energy is progressing with projects blending hydrogen into natural gas turbines but acknowledges challenges related to technical feasibility and economics. The pathway to establishing a robust hydrogen market involves extensive planning, investment, and the development of auxiliary systems, including water purification. While significant hurdles exist, interest in hydrogen projects demonstrates the potential for future growth in greener energy solutions.
This week, our guest is Arne Wohlschlegel, Managing Director at Siemens Energy Canada. Siemens Energy Canada provides a range of energy technologies, including natural gas turbines, grid equipment and digital solutions, wind turbines, and hydrogen electrolyzers.
Peter and Jackie asked Arne about the power equipment business, including how the potential new tariffs could impact the business and new manufacturing investments. They also discuss technologies for generating electricity from natural gas and efficiency rates. Other questions include: To decarbonize natural gas power generation, is it better to blend clean hydrogen into the feedstock or capture the carbon dioxide from the exhaust? What is the backlog for ordering new natural gas power plants and the waiting time for other key electrical components, such as large transformers? What digital technologies can increase the use of existing grid infrastructure? What are your expectations for offshore and onshore wind generation projects in Canada? Hydrogen development in Canada has been slower than initially expected back in 2022; why the delays, and what are your future expectations?