Hydrogen and e-fuels for automobiles lacks debate

How Siemens Austria CEO Wolfgang Hesoun, one of Austria’s most experienced managers, analyzes the fulfillment of the climate targets and which excellent possibilities Austria should not miss.

Wolfgang Hesoun, General Director of Siemens Austria, spoke with Regional Medien Austria (RMA) on energy supply in Austria and what actually counts. In order to meet the climate targets, he urges a more open dialogue regarding technological uses in Austria.

RMA: Decarbonization of the economic and energy system has the highest priority for achieving the climate goals. Does Austria have enough clean, i.e. CO2-free electricity, or alternatives to achieve this goal?

Wolfgang Hesoun: In addition to what is stipulated in the EAG, there would be additional topics such as smart city solutions, which through intelligence, the increased use of renewable energies, the optimization of consumption, storage, charging facilities for e-mobility, etc., result in energy being used more efficiently and therefore much less primary energy being consumed. Within the framework of so-called energy communities, it is now possible to distribute self-generated but unused electricity within a community. This energy is then not channeled into the general grid but goes directly to one or more members of that energy community. The focus here is on saving energy and optimizing use. Unfortunately, very little attention is currently being paid to this. Much more importance should be attached to this topic. It holds massive potential for CO2 reduction in new buildings as well as in existing buildings. The more optimization measures are taken, the lower the demand for primary energy. For example, Siemens is in a research community with Vienna in Seestadt. Many solutions have already been found here in recent years. These are now also being used internationally. The City of Vienna intends to implement these findings in the real estate portfolio in the future.

RMA: In Aspern, you are researching the future of energy in urban areas using real data from residents. Tell us what specific insights you have gained and how these are used in newly developed or expanded Siemens products?

In Aspern we have two different areas: One area is the buildings, and the other is the networks. It’s about how to bring buildings, networks, and those who operate and use them closer together.

There are many things that can be optimized in buildings. A residential building is technically easier to maintain than a complex building such as a school building or hospital, which contains a lot of technology. Together with the optimization of the building physics, we come up with potential savings of around 30 percent. There are also other cost aspects: If I connect buildings and create energy communities, for example, which has been difficult up to now, several buildings could communicate with each other via algorithms and thus create an optimum between consumption, transport, storage, and production. This interconnection results in a large number of new options and products that Siemens is already selling on the world market.

The second area is the power distribution. In the past, the 400-volt level, i.e. the low-voltage level, was completely unmonitored by the energy supply companies (EVU), which means that power failures were only noticed accidentally, for example when users reported them. Using network monitoring systems, we get a very good picture of how oversupply and demand or additional demand can be regionally balanced with storage elements in different network sections in such a way that an optimum is also created here. This also contributes to the aforementioned 30 percent savings.

RMA: Electricity prices have risen sharply (March: plus 10.6%), while at the same time the demand for e-mobility and smart home solutions is growing. So if life is becoming increasingly dependent on electricity, how can companies and private individuals protect themselves from extreme costs and dependencies?

This is not just a question of the current electricity price, which is currently driven by the gas price since there is this formal agreement that the last electricity producer sets the electricity price. That could all be changed, but in fact, it will be the case that we will have to overinvest a lot in the future to achieve comparable security of supply, in order to still be able to guarantee the same security of supply that we have now, for example by using power plants. This means that many more producers have to be on the grid than normal to be able to cover the demand at all. That alone costs a lot. Then there are the infrastructure costs, which are known to be several billion euros.

It is not to be expected that the price of electricity will fall significantly. This is very effective when there are no comparable production costs for electricity in the entire market. This helps Austria in the industrial sector, but not in international competition when we are confronted with higher costs. I don’t see why that should change at the moment.

The second point that poses a problem for me is carbon pricing, which will not increase linearly but progressively increase incentives. That is, one prescribes something which possibly cannot be achieved. The only thing that can be safely achieved is higher costs for energy use through CO2 pricing. However, this could be counteracted by increasing the efficiency of consumers. Hence our appeal is not only to talk about energy production but also about its use by promoting energy-efficient solutions that already exist.

RMA: The stumbling blocks on the way to the climate goal are transport and storage problems, keyword “sector coupling” (connection of the “energy sectors” electricity, heat, and transport, note), long approval processes, enormous land consumption, for example with solar power plants. If you were the energy minister, what would you do immediately, taking the climate target into account?

What will be necessary for the fulfillment of these goals are actually feasible framework conditions, such as shorter approval processes. The topic of land consumption is dealt with very relevantly in the case of roads, but not in the case of PV systems, which would require a large amount of space. If you look at how long such approval periods can last, I have doubts about the feasibility. What is really missing is diversity in energy production and use. I miss the discussion about hydrogen, and e-fuels, … This is currently failing in terms of price due to the volume of production and use. In the end, economies of scale mean that we could soon find ourselves confronted with an economical form of this energy of the systems, given that the price level for energy is already higher. The pure orientation of mobility in e-cars would be restrictive. Better would be both-and. However, this is not found in the current bill.

RMA: Is electromobility the technology of the future in private transport? Because of the recycling-intensive nature of batteries, why aren’t more versatile technologies such as green hydrogen used?

I ask myself the same thing. There are many ideas. The List company and a Styrian group have taken the first steps to advance the development of e-fuels. Hydrogen production can only be viewed from the perspective of climate protection if we also operate the electricity generation, which is necessary for the operation of the electrolysis, under CO2 savings aspects, i.e. if hydropower or wind generate the electricity. This also raises the question of the international perspective. In Saudi Arabia, for example, electricity could be generated on a large scale using PV systems, then hydrogen produced by electrolysis and then brought back to Austria, or in a more transportable form, for example, ammonia. By participating in such a plant, Austria could be supplied or designed to be CO2-neutral in the future.

E-mobility, for example, is not just about the car, but about the entire chain, i.e. the production of cars, as well as the infrastructure itself. If you look at the ecological footprint here, the question arises whether it is not wiser for some things from the inventory with new combustion fuels that are not mineral oil, but ZB. are hydrogen-based, to continue to operate proportionately. Otherwise, in ten or 20 years, we might be exporting an outdated fleet that now runs on internal combustion engines to poorer countries. This is also not ideal for the climate. So there is a lack of allowing all possibilities. The CO2 targets are so high that they can only be achieved by using the entire pallet!

Siemens has made great strides in using fossil fuels. What should not happen is that financial support for PV systems keeps electricity prices so low that gas power plants can no longer be operated economically. This often means that the focus is on the use of coal due to cheap CO2 certificates. So you can trigger a completely wrong development with seemingly small measures. You have to be very careful here.

RMA: Siemens has a high level of expertise in the field of artificial intelligence, IoT (Internet of Things), and edge computing (decentralized data processing at the edge of the network) in connection with industrial know-how. In which products or applications will consumers find these technologies in the future?

In recent years, Siemens has developed into a pure technology company. We focus on the areas of intelligent infrastructure in buildings and decentralized energy systems and support industry in the digitization of production processes. These go all the way through – from the automotive, and mechanical engineering industry to the pharmaceutical or food industry, such as Spitz or Coca Cola, whose production we are digitizing. This gives consumers the opportunity to get a product from this optimized production that is either cheaper or better for the same money.

RMA: What do you think of Austria’s new package of measures, in which, among other things, storage users are obliged to offer or return unused gas storage capacities?

Of course, making the best possible use of existing storage capacity makes sense, especially in times when supply is at risk. Because you can optimize the supply with additional energy.

RMA: You are a major employer in Austria. Do you feel the problem of the shortage of skilled workers? How do you recruit apprentices?

Basically yes. We see changes, especially among trainees. We used to have the opposite problem – too many applicants and a limited number to take on. Our primary target group for apprentices was HTL school dropouts. They have a certain level of previous knowledge and technical know-how. Because there were relaxed regulations in schools during the pandemic, this target group has now disappeared. In the meantime, we are also looking for people who have already completed their high school diplomas.

Siemens has a good reputation as an employer. We see a high demand for products in the industry after Corona. In many cases, orders are now also placed in stock, as many customers now order earlier due to the long delivery times. This leads to a need for additional staff, which we are currently looking for. We will certainly keep the number of employees that we were able to maintain during Corona – we were not on short-time work.

RMA: How much does Siemens’ withdrawal from Russia hurt the mobility subsidiary?

It is clear that it is not pleasant for a company to leave a country after 170 years. In the Group, we made this decision carefully. Withdrawing from markets is never nice. But there are framework conditions that made this step necessary.