Siemens Says AI Can Boost Power Plant Profit by 20%: Q&A

By Bryony Collins, BloombergNEF. This interview first appeared on the Bloomberg Terminal

Companies from health care to power generation that adopt a “data-centric business strategy” can improve efficiency and achieve higher profitability, Andreas Geiss, chief technology officer and vice president at Siemens Mindsphere, part of Siemens AG, told BloombergNEF in an interview. “Manufacturers who don’t invest in digitalization will miss the next quantum leap”, Geiss said.

Siemens and U.S. software company Bentley Systems launched a joint service in October to provide asset performance analytics of power plants aimed at improving energy network usage and cutting costs. It is hosted on Siemens’ cloud-based system MindSphere and uses artificial intelligence to help understand the performance of a power plant such as a wind farm.

The technology may suggest operational changes, such as how to “manipulate the pitch of the blades for higher electricity output, or turn down the electricity output of the plant during low demand periods in order to gain lifetime for the wind turbines,” Geiss said.

“Improving overall equipment efficiency by 10 percent can result in bottom-line improvements of 20 percent and more,” he added.

Siemens is providing analytics services to energy companies to help them find “anomalies and patterns” in their data that it says can lead to better operations and improved profitability.

Geiss spoke with BNEF’s Bryony Collins at the Bentley Year in Infrastructure 2018 conference in London on October 17.

Q: What is Siemens’ digital strategy for the energy industry?

A: Siemens started the journey of digitalization roughly five years ago and as we achieved our targets earlier than planned, our journey gets accelerated now with Siemens’ Vision 2020+.

With the MindSphere offering, we have reached an IoT [internet of things] operating system where every company can easily connect assets. It should be easy for customers using Siemens equipment to connect to our IoT service and MindSphere platform, but this is not limited to Siemens equipment. It’s an open operating platform where you can connect each and every asset from third companies seamlessly.

This month we have launched an asset performance management service with Bentley, specifically for energy plants. We want to help customers understand how they can leverage the value of data to improve something. The purpose of monitoring something is to find anomalies and patterns, to understand how to improve either your product such as a gas turbine, or energy network to reach higher utilization and reduce overall cost. Ultimately this will result in overall higher profitability and better overall efficiency.

Customers need to buy into these digital offerings to pave the way to new business models.

In the past, everyone invested in goods and projects [through capital expenditure] but in the future, companies will invest more in products and technology through a service model.

Q: How will the new joint technology and service offering from Siemens and Bentley help energy companies, such as wind power plant owners, improve equipment efficiency and make money out of the data they collect?

A: We first gather the data from the automation legacy of a wind turbine or plant. In the case of a Siemens Gamesa wind project, it runs with a Simatic PLC automation system. These systems allow you to select during the engineering-phase which specific data point to share with MindSphere.

Wind power clients can buy advanced maintenance contracts to achieve high availability. All the data produced from the plants are owned by the customer. If they allow Siemens access to this data, we can offer a service to find certain patterns and to improve the operational efficiency of the plant.

Q: What will the new service allow you to offer customers?

A: Siemens’ analytics applications based on MindSphere analyze the operational performance of a wind power plant to understand the strength and intensity of the wind — how you can manipulate the pitch of the blades for higher electricity output, or turn down the electricity output of the plant during low demand periods in order to gain lifetime for the wind-turbines. That is the beauty of what industrial IoT solutions based on cloud platforms like MindSphere can achieve.

It enables new business models for our customers. Either the owner/operator has their own staff and operates with the data as well as they can, or they allow Siemens to run it based on defined targets.

Q: What is the operational improvement potential in using IoT systems to monitor and improve assets?

A: Improving overall equipment efficiency by 10 percent can result in bottom-line improvements of 20 percent and more. This shows that increasing the availability of a power asset like a wind farm results in higher profitability.

MindSphere is applicable first and foremost to all the domains where Siemens is active, and where we have domain knowledge. It’s the same across sectors – for power generation, grid management, health care, process industries, discrete manufacturing, mobility and infrastructure technologies.

Q: Is it challenging to connect older, mechanical power plants to the Cloud?

A: Many power plants have been there for 40 or 50 years, especially in Europe. Over time, the equipment gets renewed, but at a power plant you easily find equipment that is 10 to 15 years old. It’s not a barrier to connect those assets to the cloud, because [an existing computer] system [is needed to control] the plant. This produces data and we can tap into that, regardless of it is Siemens or third party-owned equipment.

There is no limit to the age of a system to which we can integrate data analytics.

The beauty of being a hardware and software company means that we know which gateway to pick to establish connectivity. For instance, the MindSphere Nano Box allows us to get data on basically any asset of any plant.

Q: What about the risk of a cyber-attack on a large power network?

A: The risk is there, but you can prevent it by using the best standards available. This will never result in 100 percent security, because we also know that it depends on the amount of will, budgets and experts to launch a cyber-attack.

We often hear that new cloud-based technologies are less secure, but I can’t think of anything more secure than a cloud-based system. Companies that run cloud-based offerings invest a lot of capital and effort into protecting their systems, much more than typically any other user would be able to do within their own firewall.

About Bloomberg NEF

Bloomberg NEF (BNEF), Bloomberg’s primary research service, covers clean energy, advanced transport, digital industry, innovative materials and commodities. We help corporate strategy, finance and policy professionals navigate change and generate opportunities.

Available online, on mobile and on the Terminal, BNEF is powered by Bloomberg’s global network of 19,000 employees in 176 locations, reporting 5,000 news stories a day.
 
Sign up for our free weekly newsletter →

Want to learn how we help our clients put it all together? Contact us