Efficiency Improvements are Criticalfor a Bright Tomorrow

Issue 10 and Volume 100.

Efficiency Improvements are Criticalfor a Bright Tomorrow

By Heinrich v. Pierer, Siemens AG

What will the power sector look like in 25 years or even further in the future? Above all, how will the global electrical market develop? These are questions of crucial importance, questions to which everyone would like to have the most accurate answers possible. But the uncertainty of such predictions is best demon-strated by looking back some 25 years or longer. Twenty-five years ago, in 1971, there wasn`t even a hint of the oil crises of 1973/1974 and 1979. Looking back today, we tend to think less of the soaring oil prices and the power of the Organization of Petroleum Exporting Countries, now sharply reduced, than of their stimulus to develop new technologies. The years since have been marked by steady improvements in energy efficiency. And this trend will certainly continue, opening new horizons on our journey into the 21st century.

The key to the future is the unrelen-ting improvement of efficiency in the way we use energy, particularly electricity. Efficiency in this sector will help save energy even where we don`t expect it: in automobiles. Today`s engines are electronically managed to optimize gas consumption and cut emissions. Relays, for example, are being replaced by chips that use 50 percent less power and are 90 percent lighter. By the year 2000, the value of electrical and electronic components in luxury cars will reach 25 to 30 percent of the total and they will make a major contribution to further cutting energy needs.

Above all, fascinating advances are being made in the power sector. Some 40 years ago, power plants needed 700 grams (g) of coal to generate 1 kW of electricity. This has been cut today to 300 g and an end to this trend is not yet in sight. Take a look at modern combined-cycle power plants. In a 1,000 MW unit operating 7,000 hours a year, a 1-degree improvement in efficiency from 55 to 56 percent translates to 130 million extra kWh without additional fuel consumption or emissions. This is enough electricity to power 30,000 homes a year. And we already have gas turbines near commercial use that achieve 58 percent efficiency. By the turn of the century, the 60 percent level should be a reality.

Major advances are not limited to power generation: There is also enormous potential for increasing efficiency in power transmission and distribution. Networked power grids can link various time zones, helping reduce generating capacities needed to meet peak load demands. Or innovative superconducting magnetic power storage units will take over the function of the “seconds-range reserves” in power plants. Today, power plants must generate surplus power to ensure that, in an emer-gency, the output level in the grid can be maintained.

The technical potential for further efficiency increases in the power sector exists and is continually being developed by global suppliers like Siemens. Yet the challenges and expectations facing the industry are also enormous.

Today, roughly 20 percent of the world`s population consumes about 80 percent of the total generated power, and 80 percent of the popu-lation shares the remainder. This imbalance is being further exacer-bated by the fact that population growth is highest in those regions with the least developed power base. The message is clear: Without a steady improvement in living conditions and power supplies in developing nations, population growth will not be manageable.

A balanced worldwide energy supply is only possible by using technologies that are available and also easily applied in less developed countries–fossil-fueled power plants and, where possible, hydroelectric plants. In many regions, particularly in the rapidly developing Asia-Pacific, as well as in the Americas and Europe, nuclear power plants will continue to be built as well. New generations of pressurized and boiling water reactors will offer further improvements in operating safety.

In the foreseeable future, perhaps the next 20 to 25 years, it is unrealistic to expect completely new technologies to take over a large share of the world`s power production. And it is just as unrealistic to assume that solar energy will replace conventional energy sources. Although solar energy will certainly be used in new applications and possibly have a larger share of the total power output, its mere 0.1 percent of the global total at present makes it quite clear that it will not play more than a marginal role.

Although prognoses for the more distant future are uncertain, one thing is clear: fossil fuels, especially oil and gas, are finite, and there will be growing use of renewable energy sources. Advances in superconduct-ing technologies will offer new possibilities for storing and trans-mitting power over great distances. “Energy highways” will create global links and incorporate isolated water and solar energy sources. And even the biological production of hydrogen is no longer utopian and could possibly provide the foundation for a hydrogen-based power sector in the more distant future. Fuel cells will reach series production, allowing a zero-emissions power source for automobiles. But this is only speculation, and we should remem-ber that the course of progress can often be unexpected.

Above all, we shouldn`t lose sight of present concerns and goals while dreaming of that distant future. This means using every available possibility today to improve power plant technology and the transmission and distri-bution of power and to develop ever more energy-efficient products, systems and plants.

Dr. v. Pierer is chairman of the Managing Board and president and chief executive officer of Siemens AG, Dr. v. Pierer manages the global affairs of the $61 billion electronics and engineering concern doing business in some 180 countries.

Dr. v. Pierer was born in Erlangen, Germany. He was educated at the University of Erlangen, earning a doctorate in jurisprudence and a degree in economics. Dr. v. Pierer joined Siemens in 1969, starting in the corporate finance and legal department. He went on to hold a variety of management, sales and marketing positions and was named a member of the Managing Board and group president of the Power Generation Group in 1989. In 1990, he became a member of the Corporate Executive Committee, and was appointed to his present position in 1992.