On the road to a new energy age: Trends & innovation Dr. Zuozhi Zhao CTO Siemens Power and Gas

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1 On the road to a new energy age: Trends & innovation Dr. Zuozhi Zhao CTO Siemens Power and Gas 28 siemens.com

2 We at Siemens Siemens AG 28 Page

3 Rail Mobility & Infrastructure Oil & Gas Power Utilities Distribution System Operators Healthcare Providers Auto, Electronics Cities Chemical, Pharma Industry Services Minerals, Cement, Fiber Mining Battery Technology Road Mobility & Infrastructure Water & Waste Water Airports Pumps, Fans, Compressors Buildings Distributed Energy Systems Machine Tool Builders Food & Beverage Siemens AG 28 Page

4 Trends Siemens AG 28 Page

5 The global trends drive energy market trends Page

6 The global trends drive energy market trends More energy More affordable energy More affordable and safe energy More affordable, safe, and clean energy Page

7 The global trends drive energy market trends More energy More affordable energy More affordable and safe energy More affordable, safe, and clean energy CO 2 out of the energy system Energy efficiency gaining momentum Sector coupling + Energy Storage The energy system is getting more complex Digitalization is the key to handle the complexity and create new customer value and profit pools / New business models emerging Technology / investment cost dynamics changes Need to manage the stranded fossil assets appropriately Geo-politics and governments play key roles Page

8 World goes with more renewables Siemens AG 28 Page

9 The all electric world - fully electrified, fully decarbonized, and more complex Energiewende 2.0 <% 20+% 40+% 60+% 80+% Traditional mix System integration Market integration Regional self sustaining systems Fossil (coal, gas, oil) Nuclear Renewables (mainly hydro) Fossil (coal, gas, oil) Renewables (wind, PV, hydro) Capacity markets etc. Predictable regional area generation (topological plants) Decoupled generation and consumption Interaction of all energy carriers Efficiency LCC reduction Availability / reliability / security Decreasing spot market prices Subsidized economy Increasing redispatch 1) operation Power2Heat, CHP increasing Demand side management First storage solutions HVDC/AC overlay Regional plants, cellular grids HVDC overlay and meshed AC/DC systems Power2Chem / CO 2 tovalue Stability challenge Complete integration of decentralized power generation Storage systems/power2x Return of gas power plants? Past Today Mid-term Long-term Core Technologies for future are Low Carbon, Sector Coupling and Digitalization technology 1) Corrective action to avoid bottlenecks in power grid Page

10 The new energy world: fully electrified, more complex and with renewable energy provision that is decoupled from consumption (PV) + (Wind) (Consumption) = (Residual Load) = f(t) 80% share of renewables MW 500 MW 50 MW 250 MW 0 MW 0 MW Most likely scenario for MW IFHT -0 MW IFHT -250 MW -500 MW Past: Production follows consumption Today: Consumption / production mismatch Future Production decoupled from consumption Source: German Power Network Development Plan Page

11 The three essential grids in context of an energy cell concept Digital Grid Cell 2 Cell 1 Cell 3 Electricity (transmission) grid Gas grid Cell 4 Cells negotiate energy exchange among themselves (peer-to-peer) Energy cells can be Community Factory Power plant Dedicated storage facility Energy cells contain Power generation Thermal and gas grids Energy storage Power-to-X (-value) Dynamic load control ICT, self-organizing, self-healing intelligence Resiliency Page

12 Sector coupling Siemens AG 28 Page

13 Hydrogen is a core element in sector coupling for carbon-neutral biofuels, other chemical feedstocks & long-term energy storage Sector Coupling (Links and Interactions) & H 2 Conversion Paths Sector Coupling Heat Supply Gas Boiler Gas Storage, Pipeline System Power-to-Heat (Heat pumps, CHP) Heat Storage Power-to-Gas (Energy Storage) Gas Industry Power Sector Gas Power Plants Source: Based on FENES (OTH Regensburg) Power-to- Liquids Fuel Storage Power-to- Chemicals Power-to-Gas (Re-Electrification) Gas Reforming Power Storage (central) E-Mobility Transport Sector Power Storage (decentral) Hydrogen, Methane, Ammonia as feedstock for chemical processes Chemicals Definition Link between power sector and energy-consuming sectors Crucial to reach deep decarbonization of the energy sector (-80 95%) Value Proposition Higher overall energy efficiency Supports supply/load balancing in case of high share of intermittent renewable generation More diverse and interdependent energy supply Drivers Reduction of GHG emission Energy efficiency improvement Reduction of energy import dependency Integration of volatile Renewables Technology development (e.g. e-mobility, battery, hydrolyzer) Page

14 In a Sector Coupling approach, the increased electrification reduces primary energy consumption Global Scenario Primary energy demand (Mtoe) Global power generation (TWh) 13, % 17,584 ~9,000 Efficiency gain through electrification (e.g. heat pumps, e-cars), only partly offset by increased power demand +62% -50% >-25% 39,290 2,063 3,162 Other RE Solar Wind Hydro Nuclear Gas Oil Coal 24, , ,571 5,519 1,022 9, ,270 6,193 3,844 9, , % ~50,000e Additional electricity demand by e.g. electrification and Synfuel production Sector Coupling Sector Coupling Source: IEA WEO 27, New Policy Scenario; own estimate for impact of sector coupling Page

15 Electrolyzer Siemens AG 28 Page

16 For Hydrogen many different applications exist: Economics and technology readiness will determine final use Power Generation Conversion In / Out Utilization Pure Hydrogen pathways H 2 Above ground H 2 storage H 2 H 2 Industry / Fuel Cell Car Mobility / Industry Energy (Re-Electrification) H2-Engine O 2 H H 2 H 2 small cavern storage H 2 Energy (Re-Electrification) Small GT H 2 O Fluctuating Renewables Power to gas pathways Electrolyzer H 2 CO 2 Methanation CO 2 Gas pipeline CH 4 + H 2 CH 4 CC-Turbine Energy (Re-Electrification) Mobility / Heating / Industry Page Source: Siemens AG, I DT, E TI

17 Silyzer portfolio scales up by factor every 4-5 years driven by market demand and co-development with our customers Silyzer portfolio roadmap Reduction of H 2 production cost ( /kg H 2 ) 21 Silyzer 0 Lab-scale 25 Silyzer 200 Commercial product 28 Silyzer 300 Commercial product Next generation Under development First investigations in cooperation with chemical industry Page

18 Linz, Austria World's largest H 2 pilot plant Hydrogen production using electricity from renewables and water Joint collaboration of Siemens, VERBUND, voestalpine, Austrian Power Grid, K1-MET and ECN Customer value: Planned capacity: 6 MW capacity 1,200 cubic meters of H 2 per hour Production start of green hydrogen in 28 Start up time from cold stand-by < sec Page

19 Gas turbines burn hydrogen Siemens AG 28 Page

20 Siemens GTs are able to burn natural-gas with 50-60% H 2 -content already today World class leader in DLE H 2 -combustion Hydrogen Capabilities and NOx compliance SGT % H 25 ppm NOx SGT % H 25 ppm NOx SGT % H 25 ppm NOx Product synergies and long experience The general geometry of the burners are identical for the SGT-600,700 & 800 Full string test in 0% load, 27 ( 50%H2) High pressure test in SGT-750, 26 Engine test in SGT-700, 22 and 24 SGT-700 continuous operation since Sept. 24 (>%H2) High pressure and atmospheric tests, 2008, 2009 and 22 Applications / Customer benefits In Combined cycle BACT* is fulfilled with Siemens DLE Hydrogen products, e.g. 2ppm NOx, CO, and VOC with a SCR Power to gas, solar and wind power into H2 energy storage Grid support within minutes up to full load on renewables Reduce CO footprint and NOx with 3 rd Gen DLE Operate on Refinery Fuel Gas with high H2 content * Best Available Control Technology Page

21 Storage Siemens AG 28 Page

22 Seconds Minutes Hours Days/months Power-to-power Energy Storage technologies Time in use H 2 / Methane storage (stationary) Redox flow batteries Diabatic adiabatic CAES Hydro pumped storage Li-ion NaS Batteries Double layer capacitor Flywheel energy storage Superconductor coil 1 kw kw 0 kw 1 MW MW 0 MW 1,000 MW Technology Chemical storage Electrochemical storage Mechanical storage Electrical storage Source: Study by DNK/WEC Energie für Deutschland 21, Bloomberg Energy Storage technologies Q2 21 CAES Compressed Air Energy Storage Page

23 Energy storage applications and sector couplings Application cases by location of storage Central Large Utilities Distributed Small utilities, municipalities, industry prosumer Pumped storage H2/Chemicals Battery Thermal Electricity Electricity H 2 / H 2 Fuel Methane for car Electricity Heating, Cooling (gas grid) Grid balancing and stability Power to gas Power-to-chemicals Grid stability, self-supply, electro-mobility Power-to-heating and -cooling Page

24 Hybrid plants Siemens AG 28 Page

25 Siestart : Optimized performance and new opportunities for grid and ancillary services, and turbine operation Power Frequency response PFR + SFR Spinning Reserve GT max. load Fast start, response within < 1s Islanding, off-grid BESS rated power Black start Fast start, stress reduced Fast ramp-up and ramp-down support Min. environmental load Island load Siestart system operation line i.e. GT + BESS Siestart GT operation line Time Black start and support of grid restorage Fast start-up Primary frequency response Secondary frequency response Acceleration & stabilization of load ramps Operating reserve for peak power Minimum load Islanding off-grid Page

26 Expected payback for Siestart TM is 3-5 years driven by additional electricity to sell and improved efficiency Use Case (1 & 2): mandatory reserve for Primary Frequency Response SCC5-4000F Single-Shaft w/o Siestart TM 416 MW (7,5% reserve for PFR not sold to grid) 56,87% 92,5% load point) SCC5-4000F Single-Shaft Siestart TM 450 MW (PFR 0% by Siestart) 57,40% (optimized load 0%) Economical benefits of Siestart TM + 34 MW more to sell to grid 0,53 % ppt more 0% load payback 3-5 years Abbreviations: PFR: Primary Frequency Response; SFR: Secondary Frequency Response Page

27 When Energy meets IoT Siemens AG 28 Page

28 MindSphere The cloud-based, open IoT operating system from Siemens MindApps Powerful Industry Applications and Digital Services Mindsphere MindSphere Open IoT Operating System (PaaS) MindConnect Connecting Products, Plants, Systems and Machines with MindConnect Siemens AG 28 Page

29 Digital Services Digital Solutions with tangible outcomes for your business today Digital Suite Availability Services & Solutions Performance Services & Solutions Risk and Compliance Services & Solutions Covering Remote Services Remote Field Service Virtual Guidance Remote Diagnostic Services & myconnect Services Flex LTP Power Diagnostic Center Performance Optimization Services Cyber Security Services Cyber Security Consulting, Managed Services, Professional Services, Products Units On-premise Solutions Instrumentation & Edge Solutions On-premise Solutions Fleet Centered Solutions On-premise Emissions Optimization Solutions Combustion Optimization Solutions Plants Advisors myhealth (small turbines) Advisors My StartUp Advisor Emissions Optimization Advisors My Auto Tuner My Health Advisor (large turbines) My Performance Advisor Digital Lifecycle Services (Alarm Opt) Fleets Transparency Applications Ç My Product Advisor My Spares Advisor My Asset Monitor Mindsphere Siemens AG 28 Page

30 Large Scale Renewable Network PCC Wind Grid System complexity + 1) NG (+x) 2) NG + H 2 3) SynGas CO 2 PEM Electrolyzer PEM Fuel Cell = ~ = ~ = ~ = ~ PCC PV PCC Battery Sector coupling PCC Silyzer H 2 SGT et al. = ~ PCC SGT New technologies Special chemicals PCC SiFC The Challenge of all nations is to manage security of supply of green energy at acceptable cost! Significant growth opportunities across the layers Page

31 Contact Dr. Zuozhi Zhao Head of Technology and Innovation Chief Technology Officer Siemens Power and Gas Huttenstr. 12, 553 Berlin Mobile: +49 (162) siemens.com Page