The Energy Transition Part 1 – Transcript
On the Industry Forward Podcast, Dale and I recently had the chance to talk with John Nixon, Vice President of Global Strategy for Energy Chemicals and Infrastructure at Siemens Digital Industries Software. John walked us through how the energy industry is approaching its transformation for the future, including some of they key challenges and technologies that may prove crucial to the global energy transition.
You can listen to the podcast here, or read a transcript of that conversation below!
Conor Peick
So hi John, welcome into the Industry Forward. It’s really great to have you on the show. Dale and I are super excited to talk to you today. I was hoping you could start us off by just giving us a brief introduction for the listeners. Go over your experience in the energy industry and what you do currently for Siemens Digital Industries Software.
John Nixon
Well, thanks, Conor. Hi. I’m John Nixon, based in Houston, TX. Over the past 30 years, I’ve worked on chemicals, power plants and pipelines all around the world. Now I lead global strategy for energy, chemicals and infrastructure at Siemens Digital Industries Software, where I help clients navigate digital transformation across all of these industries.
Conor Peick
So energy is obviously a huge and really complex topic. That touches on many aspects of modern life. So John, I was hoping you could just give us a sense of sort of the two or three things that are on everyone’s mind in the energy industry. You know, the biggest challenges that are going on trends that are that are maybe impacting these companies. And their operations today?
John Nixon
Absolutely, Conor. Three major challenges stand out when I think about your question. Number one, we’re going through an energy transition. The shift from fossil fuels to more sustainable energy sources is crucial. By 20-30, we’re looking at a tripling of renewable energy capacity globally. This means we’ll need 1500 gigawatts of energy storage to manage this transition. And #2 adoption of systems engineering, digitalization, especially through systems engineering, is transforming the way we design, operate and maintain energy systems. Digital twins, for example. Help simulate and optimize operations significantly, reducing costs and improving efficiency. And #3 what I call the silver arsenal. This is what I like to call the combination of technologies, you know, renewables, advanced nuclear and on the supply side or that’s on the supply side and on the demand side process intensification. These are helping us meet sustainability goals. For example, advanced nuclear through small modular reactors offers 0 carbon power and is being integrated as part of energy resilience strategies.
Dale Tutt
You know, I think it’s so interesting when we talk about what’s going on in the industry, industry, energy industry to stay today because. You know, on the one hand, we’re trying to. We see so many industries trying to reduce how much energy they’re using and on the other hand we have new industries like. The big data centers and now you see stories about where you know Microsoft wants to build a nuclear reactor to, you know, in order to power their data centers and, you know, it’s like. It’s like you have this collision of a need in an area where the advancing technology is driving more energy demand at the same time where we’re making so much effort to reduce our energy demand in other places. So I do find it interesting and it is an interesting transition as we switch you know, as we look at you know you know this more sustainability. And you know, you know, reducing our reliance on fossil fuels at the same time that we’re trying to ramp up, you know, new energy. Technologies out there, whether it’s, you know, small nudge, small nuclear reactors or, you know, fusion, whatever is in the future for us. Let’s talk more about this energy transition. What do you see, John, as the biggest technological hurdles to the building of the silver arsenal that you referenced? For renewables and, you know, put away, you know, put it another way. There. You know where is the innovation needed the most?
John Nixon
So great question, Dale and I’d like to dive a little bit further on. So when you look at the Silver Arsenal, I look at things both on the supply side as well as the demand side. So on the supply side, you know we’ve seen a tremendous surge in a discussion around energy storage. And scaling up that storage is critical. Batteries, especially lithium ion, need to grow 35 fold by 20-30 to meet grid demands, with global capacity expected to reach at least 970 gigawatts in that time. And without sufficient storage, managing renewable energy supply and demand becomes a major challenge.
What I am real excited about and what I’ve seen really surge recently is advanced nuclear. This is tremendous. The regulatory landscape needs to evolve for advanced nuclear innovation in SM Rs Small module reactors is key. And we’re also waiting on policy to catch up. So these technologies can come to market more quickly. And then on the what I consider demand side on process intensification. In chemicals, for example, innovative technologies like compact reactors are they’re helping us to reduce energy demand. But adoption remains really slow due to significant upfront investment required. Dale, I’ve talked about this. Before there’s the University of Texas has what’s called the process science and Technology Center, which is a great place to showcase a lot of innovative technologies in process intensive industries. And with the process science technology center, they are now electrifying that entire. And that’s just one little example of what is across the board happening for our species. Is this tremendous transformation, this electrification of all things that demand energy. So with that is going to be this tremendous. Growth in demand against the grid and so I’m really excited about seeing these innovations both on the supply and demand side that we’re going through at this time.
Dale Tutt
You know, John, that’s a. Really great points there and I’ll touch a little bit on the demand piece because in many industries. We’ve seen more and more electrification. It’s not just in, you know, the example that you shared with what they’re doing at the University of Texas, but, you know, even an aircraft. See electrical systems replacing mechanical systems, partly because an electrical system is probably 93% efficient. Whereas a mechanical system, you know, maybe the efficiencies running at 75. So when you think about just, you know the equation of energy usage on an airplane or energy usage in a car, it actually makes sense to have more electrification just because you see more and energy efficiency. But as you say it does, it does really drive a lot more demand, a lot more demand, which really does put pressure on the supply and. And I think about, you know, just like the cost of what it takes, you know, if you think back to when a lot of the nuclear reactors and obviously old style older architecture, nuclear reactors, but they were very expensive, lot of regulatory issues. So I’m excited as we go through this. You know this discussion today. As you know, as we’ll have a chance to talk about, you know, like, what are we doing to help, even alleviate that those regulatory. Cost. That really drive up the cost of this newer. So which is going to be so critical? So, but before we get to that, you know, let’s maybe talk a little bit about, you know oil and gas, we still everything that we have is you know we still have an economy that relies heavily on oil and. And so you know what is being done to improve the oil and gas infrastructure to enhance its overall efficiency and its effectiveness and do you think that there’s still room for innovation here?
John Nixon
Dale, I just returned from the Abu Dhabi International Petroleum Expo. Otherwise referred to as ADIPEC has something on the order of like 180,000. It’s this huge show and I can tell you it’s shoulder to shoulder the whole time for three to four days, just tremendous. And I will. I will say there is no shortage of innovation even in oil and gas companies, there are. They’re focused on reducing emissions and improving operational efficiency. Carbon capture, for example, carbon capture, utilization and storage. Is a huge topic everywhere and it’s very common and then preventative maintenance technologies, these are really helping to reduce unplanned outages and this subsequently is. To lower emissions and waste. Digital tools digitalization and optimizing asset management. This is driving sustainability throughout operations.
Dale Tutt
You know that’s and that’s good to hear because you know, as an aviation guy and all my years in aerospace, when I think about what it takes to travel overseas and the amount of fuel that’s required to make that trip. It’s hard to see, you know, another energy source in the near term that that helps us meet that mission. And you know you can’t put batteries on. You can’t. You know we. We’re not ready for hydrogen. We don’t have a hydrogen infrastructure yet, so it is good to hear that there’s still so much work being done to improve the, you know, the oil and gas infrastructure and the sustainability of that. Of those processes, so I’m excited to hear about that. And I do think that, you know, it is part of the transition we’re going to have to figure that out as we go forward.
Conor Peick
Yeah, it’s a good point, I think to. To emphasize the fact that it is an energy transition, it’s not going to be a full stop on one thing and then we. Into the. It’s, you know, it’s this blending of technologies. I think that we’re going to be going through you know and so kind of the last thing on this energy transition before we before we move on. How are startup companies playing into this into this transition or the transformation of the energy industry? Are there smaller companies that are placing pressure on kind of the big guys to accelerate their transformations or are these smaller startups still kind of too early in their development to be to be doing that?
John Nixon
Conor, great question we’re seeing. A huge surge in. You know, Dale, when I mentioned that I’ve seen no shortage of innovation in oil and gas. It’s really across the board. No shortage of innovation. There are metrics out there on the sheer volume and the sheer level of investment in for example, I mentioned earlier, advanced nuclear is it’s off the charts. I’ve talked to no less than I think a dozen startups in advanced nuclear in as many weeks. It’s been tremendous and it’s not just advanced nuclear startups are bringing in innovative technologies like hydrogen fuel cells and next Gen. battery storage, and these are forcing these marquee accounts, these large companies. To adapt and many large energy companies they’re partnering with, they’re acquiring these startups. It it’s accelerating the digitalization, this transformation of digital and sustainability that you see going on in the market. I would say it you would. You would think that large companies would feel threatened. I would actually say that the tempo or the temperature, if you will in in the industry is one of no. Welcome these startups because it’s driving. That, quite frankly, it’s everyone’s all in energy on the transformation, on the transformation for our species. 90s.
Dale Tutt
Yeah, that’s. I mean, I I’m excited about. It’s I’ve I know you know I. Quite a few guys that are running startups for energy innovation and their passionate and you know they’re willing to try new things and. They’re out there and they’re out there on the leading edge of this technology. And as you say it’s I do see across the board that. You know, even the big companies are embracing this, that they realize this is where they’re heading. And you know, the more they can support even a lot of these companies, big companies are supporting these. And so it’s giving them a chance to innovate and evaluate and try new things and. And you know, maybe fail fast in some way.
Conor Peick
Hey there, this is your host, Conor. Just wanted to jump in and say thank you for joining us on transforming industries with Dale Tutt. I hope that you enjoyed the first part of our conversation with John Nixon. We’ll have more of that discussion coming up on the feed soon, so do please join us again. Keep an eye out for those episodes as they release. Until then, thanks again for listening and we hope you’ll join us again soon.
Siemens Digital Industries Software helps organizations of all sizes digitally transform using software, hardware and services from the Siemens Xcelerator business platform. Siemens’ software and the comprehensive digital twin enable companies to optimize their design, engineering and manufacturing processes to turn today’s ideas into the sustainable products of the future. From chips to entire systems, from product to process, across all industries. Siemens Digital Industries Software – Accelerating transformation.
