Ralf Christian, CEO of the Power Distribution Division within the Siemens Energy Sector is leading Siemens’ push toward new products and technologies to meet the challenges of flexible electrical distribution systems – integrating renewable power sources such as wind and solar energy.

Please start by giving a brief background on Siemens’ interest and activities in smart metering and the smart grid?
Ralf Christian: Siemens is the only company that can offer everything from generation, through all the grid elements for transport and distribution, to smart consumption. Siemens sees the increasing share of decentralized and renewable energy as a growing challenge for the electrical grid. In order to master these challenges, the grid and its consumers must become more flexible and interactive. Therefore we need to transform today’s grid into an intelligent network that allows bi-directional communication between electricity suppliers and consumers and fosters sustainability by providing incentives for the efficient use of “green energy”.

What is needed is an end-to-end infrastructure starting with generation over transmission and distribution to smart consumption. Siemens’ integrated smart grid portfolio addresses the whole electricity chain from generation until consumption by innovative, smart products.

What areas of the smart grid are of particular interest to Siemens?
Ralf Christian:
Enormous challenges are facing Europe's grids if they are to meet the 20-20-20 targets (20 percent less CO2 and 20 percent more renewable energy sources in the grid by the year 2020) and guarantee a reliable and sustainable energy supply at the same time. Upgrades and investments in traction networks and distribution networks are an absolute must if a sustainable energy system is to be achieved. Power grids operating near capacity today are coming up against their limits. These were not originally designed for the integration of renewable energies with fluctuating power in-feed. Blackouts, such as we experienced in Europe in November 2006 and in the U.S. in August 2003, show just how vulnerable our power grids are. The smart grid is one attempt to revitalize grids which are at their limit and to make them blackout-proof.

The Siemens approach to the smart grid centers around a new energy grid design with innovative management structures. Today's static grid operation must become a "living" infrastructure. This means flexible, transparent and fast multi-way communication between all the players in the electricity market. It must be implemented all the way along the energy conversion chain, from electricity generation through to the consumer. The basic requirement: integrated communication standards and new grid intelligence. We want to be the outright number one on the smart grid market in the field of grid intelligence.

What technologies has Siemens developed for the smart grid and what makes these unique?
Ralf Christian:
Smart grids involve the entire electricity production, distribution and power consumption chain. We work closely with our customers to address their individual challenges with tailored solutions that incorporate highest quality, reliability, sustainability and efficiency:

  • Advanced energy management systems as the brain of control centers for the transmission grid.
  • Smart substation automation and protection systems as the backbone for a secure transmission grid operation.
  • Asset management systems and condition monitoring devices are promising tools to optimize the opex and capex spends of the utility.
  • Intelligent distribution management systems are the counterpart to the energy management systems in the distribution grid. In countries where outages are a frequent problem, the outage management system is an important component of distribution management systems.
  • Distribution automation and protection systems – whereas automated operation and remote control is state of the art for the transmission grid, mass deployment of distribution automation is just recently becoming more frequent.
  • Virtual power plants, as a centrally controlled set of small distributed power generation systems and switchable loads are called.
  • Micro grids – these are still in their infancy but we are already working on suitable solutions because there must be optimum grid management between generator and consumer in small communities without grid access. Here, there is no backup from a large grid to compensate grid fluctuations.
  • Smart meters – our automated metering and information system (AMIS) integrates the metering infrastructure with distribution automation.
  • Meter data management is the software tool aggregating the meter data. It is a key component for realizing additional functionalities like the use of metering data for outage management.
  • Smart meter integration and enablement allows utilities to optimize their business processes.
  • Billing and customer care applications are key elements in the area of customer relationship management for all market roles – meter reading companies, energy suppliers and distributors.
  • Smart building – energy efficient building (clusters) manage dynamically their energy consumption, generation and storage facilities and are enabled to react on price signals from the grid.
  • Power electronics is among the “actuators” in power grid. Systems like HVDC and FACTS enable actual control of the power flow.

What industry partnerships has Siemens developed and with whom?
Ralf Christian:
We are part of a German consortium consisting of RWE Energy and others to realize practical implementation of a joint project for the development and demonstration of distributed networked energy systems for an e-energy marketplace of the future. In October 2008, the first virtual power plant operated by Siemens Energy and RWE Energy came on line. In a first phase nine hydroelectric facilities in North Rhine-Westphalia, Germany, were integrated in the plant linkup. The capacity of these distributed generating facilities ranges from 150 kW to 1,100 kW. The total capacity of all the plants amounts to approximately 8,600 kW.

In July 2009 Siemens Energy and RWE announced their cooperation in electric vehicle technology. Siemens is not only participating in RWE’s E-Mobility Roadshow but is also a partner in implementing the infrastructure for electric cars. As a mobile electric storage system, electric cars can be both charged as well as discharged and can thus serve as an intermediate storage device for environmentally friendly electric power from renewable energy sources.

As part of the move to convert existing power supply networks into smart grids, Siemens Energy and the American energy service provider Viridity Energy, Conshohocken, Pennsylvania, are to cooperate in the field of virtual power plants. The two companies have now concluded a technology partnership to offer power supply companies and network operators the necessary technology for implementing virtual power plants.

Furthermore there is a partnership concerning Masdar City, where we have planned a greenfield smart grid of a CO2-free city.

I also want to mention the Oncor smart grid applied systems program in Dallas, TX, a combination of smart metering with a state-of-the-art integrated outage management and distributed network applications system.

Where are some of the utilities/projects where Siemens smart grid technologies are deployed?
Ralf Christian:
There is, for example, a virtual power plant project we started together with the German utility RWE. Within that project we gain practical experience with virtual power plants from existing, big decentralized power producers in an interconnected supply area. Another example is a pilot project for real time measurement and power system dynamics caused by wind energy generation in the network of the German utility E.ON. Our AMIS solution being implemented for the Swiss utility Arbon Energie AG focuses on merging the core tasks of metering and distribution network automation. AMIS provides functions for implementing a smart grid among other features.

Some other major projects are an integrated system for metering and distribution network automation for an utility in Austria, including automated metering processes, significant improvement of customer processes, quality improvement of consumption data due to monthly meter reading, automation of the distribution network including transformer stations.

We have realized a smart metering solution for advanced metering services in New Zealand. There is a joint venture with Vector Limited, New Zealand, to transition 800,000 retail customers to smart metering. Another project is a so called decentralized energy market place, called E-DEMA, a German smart grid pilot and research project from the Federal Ministry of Economics and Technology in cooperation with several German companies to establish a smart grid IT infrastructure.

What does Siemens see as the main challenges in rolling out smart grid and how may these be overcome?
Ralf Christian:
Why utilities don’t simply install a million smart meters in their networks? Here there are still certain risks and obstacles to be overcome for smart metering. These primarily entail high investments with the responsibility for costs not clarified. The associated financing is not always clear. At present it has not in all cases yet been clarified who will bear the costs for the introduction of smart metering systems: the state via subsidies, the end customers, the energy marketing company or the grid operator?

The statutory situation here is still not clear. At what stage in value creation should meter point operation and metering service be set? Which of the current players assume these roles most expediently, giving due consideration to liberalization, such that business potentials can be harnessed in the short term? Some of the answers to these questions are currently still very difficult and can only be elaborated individually for each company. Certain technical issues still need to be answered, for example the question of the lack of standards for communications interfaces and data protocols. The question of data security and data protection with the deployment of smart metering systems also has to be clarified.

Nevertheless, with a view to meeting the challenges connected with the setup and expansion of a smart grid, our product range already includes intelligent solutions for reliable energy grids offering environmental sustainability and economic efficiency. For decades now, our core business has been concerned with making power grids more intelligent and consumers more energy efficient. We are market leader in the field of power automation, the control technology for power grids, and already possess the relevant expertise. We have been offering intelligent power automation solutions for decades and have gained in-depth knowledge about the complex correlations of grid operation. We utilize the latest technologies to ensure environmental soundness and energy efficiency in facilities. Thanks to our comprehensive portfolio, we are the only company worldwide that is capable of offering solutions for all sectors of the power supply market. Our solutions feature the necessary interoperability; standardization capability and compatibility allow integration of demand and generation side.

What is your estimate of the smart grid market worldwide?
Ralf Christian:
Smart grids are essential for meeting worldwide electricity requirements, which will almost double by 2030. The market addressed by Siemens will have a cumulated volume of €30 billion by 2014. We want this business to grow annually by seven percent, i.e. twice as fast as the overall market, which is growing at a rate of three percent.

Where is Siemens focussing its R&D efforts on smart grid technologies?
Ralf Christian:
We operate the world's largest research and development network in the field of electric power engineering. Our R&D locations on grid intelligence are in the USA, Germany, Switzerland, Great Britain, Austria, China, India, Brazil and Serbia. Major investments in research and development coupled with acquisitions and partnerships have allowed us to strengthen our position in relation to important smart grid technologies.

For grid intelligence Siemens is the world market leader in control systems for power grids – one of the main pillars of a smart grid. These products and solutions include programmable grid controls, such as protection, control and communication systems, technical systems for grid automation, such as electronic data transmission and processing, intelligent operations support, and simulation systems as the key components required for power grids, such as switching substations and current transformers.

Can you reveal any new smart grid products in the pipeline?
Ralf Christian:
Besides our holistic smart metering solution extending from intelligent meters to SAP applications we will present as one of the key components of a smart grid, at Metering Europe we will exhibit innovations on communication technology for smart grids as well as smart building technology.

The use of advanced communications technology is one of the prerequisites for smart grids. Our Siemens communications solutions enable online monitoring and control of all grid components. That ensures shortest response times in the event of faults and minimizes downtimes. In many cases intelligent communications solutions even empower the grid to react independently.

A key term is “smart building”: building accounts for 40 percent of energy consumption worldwide – for heating, ventilation, climate control, lighting and household appliances. In the future, however, an intelligent building control system will relieve the burden on the power and heat network and also feed auto-generated electricity into the grid. Smart buildings are synonymous with energy efficient buildings, which themselves generate, store and consume energy and independently manage and control these processes. If the building control system is linked up with the smart grid, operating costs can be further optimized with any restrictions in terms of comfort.

Furthermore we certainly have a lot of new products, systems and solutions for smart grids in the pipeline. And we will present them as soon as they are ready to market.

What will be the highlights at Metering Europe in Barcelona this year?
At the Metering Europe congress we will present a holistic smart metering solution extending from intelligent meters to SAP applications as one of the key components of a smart grid. The associated metering infrastructure is based on the consumption data acquisition and distribution network automation system AMIS. The system will be supplemented by a modern meter data management system, which links AMIS via a standardized SAP interface to corporate office software applications, including call centers and internet customer portals. Utilities will thus be able to utilize smart metering consistently from metering to billing. With this smart metering solution AMIS and the meter data management system complement each other outstandingly. All the requirements made on an integrated solution for meter data acquisition and processing, and distribution network automation in the future are thus fulfilled. Worldwide we are one of the few companies with the requisite know-how and technology that is capable of offering one-stop solutions.