Dietmar Siersdorfer, CEO, Siemens Energy Sector Middle East on how his company is investing in the region’s future.
What are the various steps undertaken by Siemens Energy to invest in the region’s future?
Siemens has been in the Middle East & North Africa (MENA) region for over 150 years; the company’s founder had also worked here. If you look at the region’s history, people usually came in, executed projects and left. However, 20-30 years ago, we tried to change this approach by working within the countries and having more people locally.
This has benefitted us immensely because in each country, we are creating a pool of workforce, which stays in the country and helps us execute locally, and at the same time, they have the opportunity to develop into other functions within the greater Siemens organisation. We have roughly over 6,000 people working in Siemens’ local entities across the MENA region.
We are also investing heavily in building our local supply chains. For example, we have leased a 220,000-square-metre plot of land in Saudi Arabia’s Dammam Industrial City to build a multi-million dollar centre for manufacturing gas turbines, compressors and heat recovery steam generators as well as repair shops and service facilities for the Saudi market. We hope to deliver the first turbine out of that facility by the end of 2013. That said Saudi Arabia is also a very big power generation market; in the last two years, we have sold more than 58 gas turbines, which clearly indicates the Kingdom’s present and future potential.
To drive further localisation and enable knowledge transfer, we have many initiatives underway in the region. In the UAE, for example, we have an R&D cooperation pact with MASDAR, which will look at developing new technologies for solar, where we extend our capabilities and develop technologies for the region, in the region.
We are also conducting top-grade training programmes for the advancement of young people. For example, we have ongoing initiative the Saudi Electricity Company (SEC) for training their engineers in Germany as part of an expert development programme (EDP) to expand their know-how in the fields of energy and grid technology. Additionally, in terms of vocational training, we offer technical apprenticeship and on-the-job training programmes for the region’s youth.
I think it is essential in the region that we also build an industrial base so that we are not only managing things, but also creating them; we are not only building factories but also craftsmanship. When you build a turbine, you also need to touch materials to build the product.
From a sustainable energy standpoint, how would you rate the progress achieved by the region?
In the long run, I expect the region will achieve a fair energy mix comprising of fossil and alternative energy sources, including renewables. However, we also need to have in place mechanisms like subsidies and feed in tariffs to promote sustainable energy. Another crucial element is attaching a price to energy. If we keep the price of energy low, it may be good for the consumer, but not for the technology as it significantly increases its initial costs.
However, the region is striving for more energy efficiency and reduction of carbon footprint. That’s the demand from governments and utility leaders and we have the technologies for the same. Our latest technologies are well below all the limits set by the global climate conference. In fact, our new H-Class gas turbine holds the world efficiency record at 60.75% in combined cycle duty. We have already installed these turbines in Germany and have sold units in the US and Korea. I am sure this technology will find a very solid base here too because power projects here are among the biggest in the world. We also provide technology to modernise existing gas turbines and get more power out of them.