Exclusive interview with Dr Jan Mrosik, CEO, Smart Grid Division, Siemens.
What would you see as the leading emerging smart energy development for the years to come?
In addition to the shift towards more decentralized and cleaner sources of power as well as the search for new business models, we observe a growing wish among our customers to increase the resilience of their infrastructure. Hazards like the devastating tornado that struck Oklahoma City in May or the floods in Central and Eastern Europe in June show us that there is more at risk than only the energy utility’s assets. In highly integrated and collaboratively organized societies these events jeopardize water and wastewater treatment, train, tram and metro networks, communications, medical and emergency services, lighting, heating as well as air conditioning – and thus social wellbeing and economic growth in general.
The dramatically growing role of ICT in energy management offers the opportunity to answer challenges like the increasing in-feed of sources of renewable power. It also can significantly reduce the vulnerability of critical infrastructure to external shocks.
The convergence of IT and OT will bring additional opportunities to increase resilience in energy networks by using predictive analytics to orchestrate workforce management in emergency situations. We drive the convergence of OT and IT and thus can offer applications which will allow utilities not only to react faster to outages but to take the right measures in advance.
Creating new partnerships is a crucial element in the upcoming smart energy paradigm shift. What do you see as the major challenges in bringing together very different industry stakeholders to offer end-to-end solutions?
In a “software world” or a world where the power grid has started to become a large part of the “internet of things,” one cannot succeed without leveraging partners. That’s why we pursue the strategy of creating an ecosystem of best in class IT partners for Siemens Smart Grid. Just a few weeks ago we announced a global strategic alliance with Teradata, the latest addition to our network. This is a perfect partnership of two world market leaders, which combines our know-how and customer intimacy in the energy sector with the cutting edge big data expertise of Teradata.
This is a clear win-win situation meaning the first very important prerequisite for a sustainable partnership. And in addition this alliance brings forth a huge benefit for our customers, who will get a much higher level of transparency on the status and activities in their networks. This will enable them to improve the reliability of their infrastructure and run their grids more efficiently in an increasingly cost sensitive environment.
But no matter how similar two companies may seem, there will always be differences. A challenge for this partnership, for example, was building up a common understanding of the area and details of the alliance. It was important to precisely define the scope of the cooperation and to come to an agreement about critical business topics so as to protect one’s own strategic core competencies. The difficult areas in this negotiation process only worked out because a trusting environment was created. Thankfully our complementing and non-conflicting portfolio offering helped in creating constructive and focused discussions. This trusting environment is the second very important prerequisite for a long lasting cooperation.
Ensuring a secure smart grid infrastructure is vital. What do you see as the critical requirements to delivering cybersecurity, whilst still allowing space for new end-user product innovation?
Currently, the grid is changing tremendously. We are implementing IT into the grid to allow more efficient operations and to increase the reliability of the grid. This development makes cybersecurity a key area for operators and technology providers. We are aware of the tremendous responsibility we have in this respect. Cybersecurity has to be addressed from a holistic view point. It needs to be considered from end to end including products, systems and solutions up to processes.
It starts with products not only fulfilling the regulatory requirements and standards, but offering additional security by adding crypto-processor technology in key components of a critical infrastructure. It continues with systems and solutions, where you implement functionality to protect your grid with confidentially and integrity protection by adding state-of- the-art encryption technologies. Our solutions are incorporated in the utility networks and support cybersecurity from the utility’s process and policy side. Siemens is active in all relevant committees for standardization to secure the grid and to bring in our knowledge and experience.
Taking cybersecurity seriously, we see data and identity protection as one of the key topics to be addressed.
Siemens helps utilities on their journey towards an IT/OT integrated infrastructure by keeping a close eye on the underlying cybersecurity requirements and needs. Additionally, we are supporting end-user product innovation by adding a new space of opportunities with data analytics on top where data and identity protection are mandatorily included.
Given the importance now being placed on smart city design, how do you see the evolution of smart grids as a component to smart cities taking place in the next few years?
The special attention directed at cities today is justified by the fact that buildings consume approximately 40 percent of the total energy used worldwide, and they are responsible for 21 percent of greenhouse emissions. On the other hand we have many options for increasing energy efficiency with new HVAC systems, innovative lighting, and state-of-the-art automation technology.
If these technologies are implemented buildings will not only be more energy efficient but ready to play an important role as smart buildings in a smart grid. Intelligent buildings present an additional opportunity for decentralized energy management. Smart buildings can function as energy storage systems for power generated from renewable energy sources and help reduce peak loads and save primary energy. In conjunction with smart buildings, smart grids help save energy costs through making special consumption rates available.
Smart buildings react to price signals from the grid and initiate corresponding actions – reducing power consumption when rates are high, for example, or automatically shifting consumption to periods when lower rates are in effect.