When Andreas Nauen took the helm as chief executive officer of Siemens Gamesa at the height of the Covid-19 pandemic in June 2020, he hailed an “economic recovery based on clean energy”.
His comment reflected the strong growth witnessed in the renewable energy sector throughout the pandemic. For the first time, renewable energy was the biggest recipient of foreign investment in 2020, replacing and even dwarfing the oil and gas sector in this regard, according to foreign investment monitor fDi Markets.
Mr Nauen is now looking to combine Siemens Gamesa’s traditional expertise in wind energy with the technology that has been on everyone’s lips in the past few months: green hydrogen. While the gas has been touted as a solution for powering hard-to-electrify sectors — such as shipping, road transport and steel production — fossil fuels are behind almost all of the hydrogen currently produced (so-called ‘grey’ hydrogen).
However, companies such as Siemens Gamesa are busy exploring feasible alternatives to fossil fuels in order to produce green hydrogen. In July, the company teamed up with UK-based SSE Renewables to make green hydrogen in Scotland and Ireland. Overall, foreign investors announced a total of 28 green hydrogen projects worth $11.8bn in the first seven months of 2021 — slashing previous records, according to fDi Markets.
From his home in Hamburg, Germany, Mr Nauen spoke to fDi about the pandemic’s effect on the company, the political mood, and the growth potential in offshore wind power.
Q: What has the impact of Covid-19 been on Siemens Gamesa?
A: When the crisis started, we of course had operational impacts and we reported that — you can see that in our numbers. We had consequences in terms of our operations [and] whether we could keep our factories open. I think the good thing was that we learned relatively fast how to deal with it. All our factories kept going, but it changed the way we work dramatically.
Q: Do you feel that you have the requisite political support in Europe?
A: I think the general direction, whether from Brussels or Berlin or Copenhagen, is there.
Q: What do you think is the way forward in terms of the baseload problem (wind fluctuating)? What should we use to stop the gap?
A: In Europe we are way more interlinked than we used to be. If we go to hydrogen, then the problem of storing energy can be solved in a completely different way. At the moment, the grid doesn't allow to store power in large amounts [which means that the fluctuating nature of renewable energy becomes a problem]. But if we shift to hydrogen, we can just store energy similarly to how we store gas. Then we are over that problem of fluctuating renewables.
Q: You are also testing a solution to produce green hydrogen offshore through offshore wind power. How do you plan to make it competitive?
A: It’s a very technology-driven business. We have [what] we call direct drive technology; we started that development maybe 15 years ago, and we’ve been expanding that technology ever since. The latest turbine that we currently produce has 8 megawatts (MW). We currently have the 11MW prototype running. We are working on the 14MW prototype, so we expand, escalate and develop the technology. And that is the way we will continue to do it.
Q: Some people say the capacity of wind turbines is essentially limited to around 16MW, because if you try to increase capacity, there’s a problem with transport. Would you agree?
A: That debate has always been there. There were people who said they cannot get bigger than 3MW. Then they said 6MW, then they said 10, then they said 15, now they say 20. We were able to break all these theoretical barriers, and it has to do with the fact that the infrastructure normally follows. There was a time when, say, there were no installation vessels; then the industry developed purpose-built installation vessels that can do larger turbines. So until now, we have always been able to find technical solutions. I’m sure that turbines in the future will be bigger than 16MW.
Q: In which segment of the business can you see the most growth potential in the next 10 years?
A: That’s clearly offshore wind, while onshore wind is still a smaller business. And now many countries — France, Taiwan, Japan, the US, Korea — [are going] into offshore wind for the first time. So clearly the growth rate in offshore wind [has] the biggest [potential].
Q: Do you feel the Biden election in the US has had a significant impact upon the wind industry?
A: We already had a good [policy] momentum in the US for offshore. Offshore projects have been coming up in the US, especially on the East Coast, and there are many auctions in the various states. But clearly, with the new administration and also with all the announcements, we expect even bigger momentum, for offshore as well as for onshore. So yes, it will have a positive effect, even though I think also the US was clearly leaning more and more towards renewables, including offshore.