A kilowatt of energy is more valuable than ever. We will be facing an unpredictable volatile world. In the center of AI is power. What keeps you also up at night? We need smart policies.
Welcome to that energy show. This time I'm not just saying it to our viewers watching but also to a room of live audience because yes, as you can tell, we've left our studio and set that we had in the previous episodes and today we've taken our stuff and come to Adipek and this is where we're filming episode 3 together with an audience at our Siemens Energy booth. Thank you so much. But that's not the only special thing about today's episode. What you'll also see is I'm joined with a new guest, our Siemens Energy CEO, Christian Bruch. Christian, welcome to That Energy Show.
Yeah, thank you very much for having me. That's great to be here.
And of course with Karim Amin, our executive board member and head of guest services, a regular guest on our season of that energy show. Karim, welcome back.
You're an expert now, right, with the show and all the topic.
Christian, I want to start with you. Obviously, I did my homework when I knew that you would come and do the show with us. I went on your LinkedIn and I saw your latest series about understanding energy resilience. So, I know this is a topic you're very interested and passionate in and you have a lot to say. So, I want to start today with this audience for our show to ask you what does energy resilience really mean to you and what are the characteristics of a resilient energy system in your view?
I think we live in a world where things are more unpredictable and more changing than ever before and resilience at the end not only in terms of energy but in everything we do means be prepared for the unexpected and plan your systems accordingly, because things are going to be different a year from now than what you have thought today. If it comes down to energy, it means you have to plan for different options. That is why you need different types of energy production, different generation technologies. You need different suppliers for certain parts of the components we produce. Driving resilience is ensuring that there is a continuous availability of energy, which is the foundation of a prospering society. That is why resilience is so important in a world which is probably more unpredictable than ever before.
Kib, I want to ask you when we talk about resilience, do you see that there's a trade-off between resilience, decarbonization, and affordability?
It's the question that I've been trying to answer over the past several years. And I think it's very clear that we need the three of them. These are the key elements of a functioning and reliable energy system. You need the resilience, you need the affordability, and of course you also need the sustainability. If we don't have a resilient system, as Christian says, then we do not plan for any unexpected events. Then the system does not function. It collapses. If it's not affordable, then it will also not survive. And sustainability is something we need for our future generation and for our planet. So the three topics are not competing, they are complementing. The most important thing is to understand that the importance is not in one versus the other. The importance is how to complement the three of them and find the right energy mix for each country and for each region based on their own circumstances.
Just to add to what Karim said, I think that is an important message to convey to policy makers and governments because unfortunately very often these discussions tend to be from one side. Renewables are bad or oil is bad or gas is bad, and at the end it's really the combination which makes the trick. We also have to recognize that building an energy infrastructure is probably the most complex thing on Earth. It's relatively difficult and I can understand that it's very difficult sometimes for policy makers to get their arms around this complexity. But there is no silver bullet to solve the problem of providing sustainability, availability, and affordability of supply. It is important that everybody, whether it's fossil fuel, renewables, or grid, has to work as a team. This is what we have to get across to policy makers because we tend to be too narrow-minded sometimes when it comes to energy and energy supply and resilience.
Christian, you make a very good point. We have to work as a team. I have a fun little topic also adding to the team topic, finance. Right? Because we talk about these characteristics of an ideal resilient energy system, what we think the world needs and what we need to work towards. Do you think we have the financial backbone to fund resilient energy systems today?
Let me give two answers to that. Fundamentally, there's enough capital in the market to finance energy infrastructure, energy transition. Enough capital is there. But it's important to understand that capital normally should not have an ideology. Capital has to flow where it makes most sense, where you can get the cheapest energy, where you can get CO2 down. The financial system in certain areas is restricted in terms of letting capital flow into certain projects, and I think that is not a smart thing, because we will need gas, we will also need gas for the future. You have to make sure that... I was just coming out of a round table from oil and gas companies and they sometimes really are struggling to finance their exploration projects which is needed to get the gas afterwards to build the bridge in power production. So yes, enough capital is there, but you also have to ensure that it can flow into the projects and technologies which are needed today.
You said you were just at a round table. I believe you two also attended the opening ceremony this morning. There was a lot of clear messages saying no more energy transition. It's energy addition, no energy traction. We're just adding and adding. Obviously, now we're in the middle of this perfect storm as an energy company as well with this increased demand for energy in the wake of data centers and many other elements coming together to form this record demand. There's a lot of talk today about energy addition and moving full speed to that. Does this shift concern you? Do you feel like we're moving away from an energy transition ambition that we've been talking about the past few years into execution under pressure only?
I have to say I'm always struggling a bit with these buzzwords. Five years ago everybody was talking about sustainability. Now everybody talks about energy addition. At the end we have to build this complex interconnected energy system which also protects our planet. If you would solely talk about energy addition without recognizing that it's our job to do it with less CO2, then I would be concerned. Our job as a company is to do it in a way that step after step it gets more sustainable by solutions which help to reduce CO2 compared to other solutions today. We have to recognize that CO2 emissions this year will be bigger than ever before. So there is still a big task to resolve. That is why we need technologies, we need developments, we need smart solutions. But what is true is that energy addition is the base of prosperity and it's the base of so many things. You cannot walk away from the fact that people need energy. This is what we have to ensure. But no way, and it's also not what I hear here on this conference, are people throwing sustainability out of the window. This is not what I hear from the big oil and gas nor from the power utility. We all have a common interest to make it more sustainable. The task got a bit more difficult with the energy addition and increase of consumption. Today we need roughly 30% more electricity than we originally anticipated during the Paris agreement.
Karim, I also want to ask you adding on to this today. In addition to working in a world where you need to deliver this energy as much energy as the world needs with minimum emissions, you also don't operate in isolation. You're part of a complex ecosystem which includes policy and politics as well. Today, this year, more than maybe any year in recent memory, we've seen global trade tensions rising, tariffs, supply chain rivalries, a lot of new strains which are not only on the world of politics but also reflect on the world of energy. How do you keep building an energy system that's supposed to be global, that's supposed to be enough for everybody in a world that feels maybe more divided than ever before?
I think it connects to the topic of it's not easy. The world keeps trying to simplify the topic by finding one answer. That's the buzzwords that Christian talks about. And it's not one answer. It's really a combination of things. I think the beauty of the energy business and the energy topic is that it's always in the center of the global agenda. It's something that connects peoples together. Collaboration here plays a major role. A place like Adipec for example, here today I heard you saying the world needs maximum energy minimum emission. This was the message of Adipec a year ago. That's exactly when Dr. Sultan took the stage and said that's what we need. Back to what Christian says, I think the message is the same. So yes, we need additions, but we need minimum emissions. How do you get that? Through collaboration, through working together. A platform like Adipec brings more than 250 CEOs, global CEOs from the world. We've seen today plus 45 ministers coming together, sharing their use cases, sharing their ideas. Together they can work on the resilience which is very important. Resilience is what stands in front of geopolitical tensions. How do you diversify supply chain? How do you create more than one source for critical minerals? That's what collaboration is all about, and that's what Adipec offers to the energy market.
And do you feel like there's a conflict of interest at times when you try to achieve this?
I believe there's a conflict of interest all the times because companies are looking for doing business. Governments are looking for policies that look at affordability, and of course we all are looking at a cleaner planet, a more sustainable planet. So there is more than one target to reach. But I wouldn't say it's conflict of interest. I think it's back to this difficulty and complexity of the situation and how you could use policy, technology, collaboration, all of that to solve for this equation.
Christian, also when we speak now about conflict of interest, maybe since you became the CEO of Siemens Energy now for five years, you probably met a lot of world leaders, senior government representatives. Do you get the feeling that the worlds of energy and politics are more intertwined than you thought they would be?
Maybe not as I thought they would be. It was clear that we are a very political business and that there will be a continuous interaction because energy is so fundamental to the prosperity of a society. No politician can ever disregard energy, and that was very clear from the get-go. What I like very much particular about the region here, I think there's hardly any other region in the world where the interconnectivity between policy makers and business people is so close, and this really moves certain things. The good thing is we need policies. We need smart policies. That is the enabler to drive innovation, to drive changes, to invest money. Policies are good. I think what we need to learn between policy makers and business is that we sometimes do not speak the same language. We understand different things behind different words. This is what we need to get right to make sure that we get as good as possible or as fast as possible in a time where we change the energy system at a speed which has never been seen before. That is the other thing which I think we have to explain to people. Sometimes people ask, is it fast enough? Are we transitioning? We are changing the world energy system at a speed which is five to ten times as fast as ever before, and that is a hell of a journey. This we need to do together with policy makers, governments, and business.
Christian, you shared earlier what's a message you would send to policy makers around the world. I'm interested what's something you hear that might be interlinked or very similar in meetings in Washington, in Brussels, in Beijing. Is there a common thread that you hear from policy makers everywhere?
Definitely would say every policy maker has an interest in helping their country to prosper. There's a common target: make your country better. One thing we are trying to convey all the time is make it simpler, because actually we want to get things done. That is obviously not always easy to make it simple. But this is what we are trying to convey. The one consistent message I hear everywhere is they want to ensure that societies prosper. Wherever I am, I continuously hear the commitment to sustainability. Everybody has a different path to sustainability and different views on it, but nobody questions that you have to work on that subject.
