Green energy transmission’s hidden opportunity

The transition to clean energy is momentous. In Europe alone, countries are racing to reduce greenhouse gas emissions by 55 percent (compared to 1999 levels) and scale up renewable generation capacity to 40 percent by the end of the decade.

Moreover, changing the energy mix requires an expanded and upgraded infrastructure equipped for green energy transmission. In fact, according to a recent BloombergNEF calculation, more than 150 million kilometers of new power lines are needed worldwide – more than double the length of the grid today.

“The effort required is enormous,” says Christina Iosifidou, “but it also presents a huge potential for decarbonization all along the value chain – from raw materials to manufactured goods.” 

Iosifidou is at the forefront of forging the necessary partnerships for this undertaking. As Head of Sustainability Grid Technologies at Siemens Energy she is continually bringing together suppliers, customers and colleagues to create innovative collaborations for climate action.

Which is why she is glad to join forces with Matthias Dürr and Marie Jaroni, the sustainability managers of Amprion and thyssenkrupp. Together with Siemens Energy, the companies are working on one of the largest new high-voltage connections in Germany, Ultranet, a 340-kilometer-long line designed to bring wind energy from the north to where it is urgently needed in the south.

While Ultranet will ultimately help pave the way for a climate-neutral energy system within Europe, “we know the technologies needed to foster the energy transition,” says Iosifidou, “but we also need to ask ourselves how can we lower emissions in our supply chain?” 

Amprion is one of the four transmission system operators in Germany, covering especially the west of the country. In 2022, the company had already set a target for reducing CO₂ emissions from their own sources and purchased energy, commonly known as Scope 1 and 2 emissions.

Now, by 2032 Amprion is also aiming to reduce Scope 3 emissions by 60 percent – that is, emissions up and down their value chain from purchased goods or services for which they are indirectly responsible.

“We all want to become carbon-neutral, and we all have to,” says Matthias Dürr, Amprion’s Head of European Affairs and Sustainability Management. Not only to comply with the EU’s framework and taxonomy, but also because sustainability has become an increasingly important asset. One example are green bonds on the international capital market, which are needed for their own investments. The first such green bond of Amprion with a volume of €1.8 billion was a major success. Amprion plans to mainly issue green bonds in future to finance the necessary investments.

The investments are huge: Since many of the renewable energy plants will be located offshore and in different locations than previous coal and nuclear power plants, new power transmission lines will have to be built from scratch to transport the energy to urban centers and the industry. Amprion plans to invest around 22 billion euros in the transformation of the energy system until 2027.

One such project is the Ultranet power link, which is currently underway: a major new high-voltage direct current (HVDC) connection that will transmit some 2,000 megawatts of electric energy. “The project,” says Iosifidou, “is a perfect example of how companies join forces to tackle emissions.”

“By far our biggest share of emissions is from electrical losses within the grid,” says Dürr, “The longer the transmission distance, the greater the losses.” Reducing those losses depends on the efficiency of the transformers being used. But it can also be combined with minimizing the supply chain emissions.

Siemens Energy’s transformer manufacturing plant in Nuremberg, Germany is one of the locations where the green transition takes place. It is an impressive complex of vast industrial buildings just outside the city center. Since the requirements of transformer stations vary depending on their purpose, all transformers built here are custom-made.

Stefan Pieper is one of Siemens Energy’s most experienced engineers in this field. “Once installed, transformers are operational for more than 40 years,” says Stefan Pieper. “Which is why it pays off to use the current window of opportunity.” Germany plans to install 30 gigawatts with offshore wind energy until 2030, which will require dozens of new transformers. Ultranet alone requires 39.

“Our own emissions amount to less than 1 percent of emissions along the value chain of our products,” Iosifidou says. The rest of emissions stems from their sourced materials and the later use of their products (Scope 3 emissions) – one of the reasons why Siemens Energy is partnering with others.

A lot of effort has already gone into reducing their own less than 1 percent share, e.g., by electrifying the car fleet and forklifts. What is more, currently five large power-to-heat drying ovens are being built to replace the former gas-powered driers in Nuremberg. The use of the new drying ovens adds up to 1,600 tons of CO2-equivalents per year.

The biggest leverage, according to Pieper, is the transformer’s efficiency factor. “Modern transformers can run with only 0.3 percent losses – which is already great,” says Pieper. “It pays off financially and ecologically however, to improve even further.” These are points that also appeal to Siemens Energy’s customers, he adds.

Another big game changer in transformer manufacturing is the use of carbon-reduced material. For the Ultranet transformers´, we were able to use green steel, that has enabled us to save more than 200 tons of CO2e emissions per transformer.

“Grid technologies like transformers,” says Christina Iosifidou, “have more than 95 percent of their emissions in Scope 3. The main emission contributors in our transformer supply chain are steel and copper.”

For the Ultranet transformers, Siemens Energy is using electrical steel, called “Bluemint”. The steel is produced with reduced CO₂ emissions at thyssenkrupp, headquartered in Duisburg and Essen, Germany, but comes with exactly the same quality standards and a significantly higher efficiency factor.

Steel production with its high temperatures and complex manufacturing processes guzzles a lot of energy, says thyssenkrupp’s Head of Decarbonization and Sustainability Marie Jaroni. So, the potential to save even more carbon emissions is enormous: “The German steel industry accounts for seven percent of the country’s entire CO2 output.” 

Currently, thyssenkrupp is building a direct reduction plant that runs by iron ore with reduced oxygen instead of by burning coal at its steelworks in Duisburg, which will be operational by 2027. By the use of hydrogen and carbon monoxide, iron ore is being transformed to what is called “direct reduced iron” through the reduction of oxygen. This helps to avoid heating up the ore to its melting point and avoid a significant percentage of carbon emissions.

“But already now we optimize all our processes in order to save emissions,” says Jaroni. To mention just one example, thyssenkrupp has been using recycled materials in the blast furnaces for several years already.

One of the reasons why this pays off: The CO₂-certificates that put a price to carbon emissions are going to get more and more expensive. Which is why, in the near future, carbon-reduced steel will be the only steel produced at all.

She still sees, however, the need for further political frameworks and masterplans – not only in Germany, but on a European level. “We will have an enormous need for green energy and green hydrogen. For us it is essential that the question of availability of goods such as hydrogen will be addressed soon.” What is more, also precise legal definitions are needed – e.g. of what counts as “green steel”, “green hydrogen” etc. This input has to come from the political side, Jaroni says. 

Carbon-reduced steel production is only one of many examples for the huge-scale effort of the entire energy transformation, since many complex changes are happening all at once: Renewable energy is being ramped up while energy generation is decoupled from coal, oil, and gas. Wind farms require stronger and additional power grids.

When one of the companies reduces its carbon footprint along the value chain, the entire product, all partners and society as a whole profit from it. And this consciousness has now arrived in all spheres of business.

“Pioneering the energy transition can help obtain new market shares in an otherwise highly competitive business,” says Iosifidou, “Companies become more attractive for the end customers.” At the end it is a win-win-win-situation – not only for the three partners, but for society as whole.

About the author: Florian Bayer is a freelance journalist based in Vienna, Austria, where he has written for Zeit Online, Der Standard, and Wiener Zeitung.

Combined picture and video credits: Anna Schroll at Siemens Energy Nuremberg; Frank Peterschröder at Amprion in Duisburg; Rainer Kayser at thyssenkrupp in Essen.