Energy Sector© Siemens AG 2008

Dr. Udo NiehageCEO Power Transmission DivisionEnergy Sector

CEPSI 2008 MacauMacau, October 30, 2008

Efficient & Reliable Power Delivery

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 1 ©Siemens AG 2008

The future energy market– Strong market drivers and growing consumption of fossil resources

Growing fossil consumption (billions of tons1)

2005

11.6

6%

21%

35%

25%

11%2%

2030

17.4

32%

3%

22%

25%

12%

7%Used for power generation

2005 2030

4.4

7.2

7%

3%6%

22%

46%

23%

9%

43%

17% 3%

16%7%

Gas

HydroNuclear

Oil

Coal

Renewable

CAGR*

1.6 %

CAGR*

2.0 %

Three global trends in energy sector

Scarcity of resources

Environmental impact

Growing populationsUrbanizationGrowing populationsUrbanization

Geopolitical risksEnergy mix

Geopolitical risksEnergy mix

Global increase in emissionsMain challenge: CO2 – climate changeGlobal increase in emissionsMain challenge: CO2 – climate change

Demographic change

*)CAGR = Compound Annual Growth Rate 1) tons of oil equivalentSources: IEA statistics, E ST MOP Base Case scenario 2008

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 2 ©Siemens AG 2008

CAGR* 9.4%

Power consumption over years (TWh) % of worldwideconsumption

Rapidly growing countries like China and India expect drastic increases in power consumption

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

GermanyUSAIndiaChina

20202000 20102007

CAGR* 5.7%

CAGR* 1.3%

CAGR* 0.6%

China

20072020

D

USA

EU

Africa

Brazil

India

22%

17%

3%

16%

4%

2%

3%

17%

13%

2%

26%

5%

2%

3%

*)CAGR = Compound Annual Growth Rate Sources: IEA statistics, E ST MOP Base Case scenario 2008

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 3 ©Siemens AG 2008

Long-term requirements and challenges for the Asian T&D- market

Expand infrastructures in emerging markets

Replace mature installed base

Fast integration of renewable energy

Sour

ce: I

EA

200

6

$450 billion forPower Transmission

Cumulative investments in energy in China 2006-2030

1947 1957 1967 1977 1987 1997 2007 2017 2027

10000

8000

6000

4000

2000

0

Load Replacement Source: UBS/ NERC

Coal7%

Oil 15%

Gas 4%

Electricity74%

US$ 3.7trillion

Sour

ce: D

ENA

-1, E

WEA

, UC

TE

Grid Investment USin Mio. US$

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 4 ©Siemens AG 2008

Three challenges for secure and reliable power supplies in Asia

Maximum utilization of distribution grids

Expand power grids

Optimize existing transmission grids by increasing their capacity

3

1

2

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 5 ©Siemens AG 2008

Options:±800 kV UHV DC: 8 systems±800 kV UHV DC: 5 systems; 765 kV EHV AC: 6 systems±800 kV UHV DC: 4 systems; 1200 kV UHV AC: 2 systems

Source: GridTech 2007, A.K. Asthana, CEA * Provinces of the indian grid

Example of grid expansion:The ‘Chicken Neck Area’ in India

SR*

WR*

NR*

ER*NER*

To ER,

NR,

WR

and

SR

FromFrom

NER

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 6 ©Siemens AG 2008

Bulk Hydro Power from Bhutan to Delhi Area (475 km)World’s Biggest FACTS Project for Series Compensation2 x 1.7 GVAr2 x FSCs: Increase in Transmission Capacity2 x TCSCs: Power Oscillation DampingCommercial Operation in 2006

Commercial Operation in June 2003

Tala TCSC Project, India:

Enhancement of Chinas “Central Transmission Corridor”500 kV Fixed Series Compensation 2 x 610 MVAr Line Compensation Level 35%Commercial Operation in June 2006

FSC Fengjie, China:

TCSC Pingguo, China

Example of series compensation for AC grids:China and India

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 7 ©Siemens AG 2008

Further supply access for weak AC networksIndependent control of active and reactive powerSupply of passive networks and black-start capabilityApplicable as a direct link (B2B), with cable transmission and with overhead lines

Customer value Market success / potential

Transbay Cable, San Francisco, USA

First project: Trans Bay Cable in San FranciscoHigh market potential due to increasing demand for grid access of renewable energy sourcesSynergies with the new application SVC PLUS

Example of grid stabilization:HVDC PLUS

Reduction in transmission constraints (in red) with HVDC PLUS

PotreroConverter

Station

Pittsburg Converter

Station

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 8 ©Siemens AG 2008

Example of HV urban links:GIL, GIS, whisper transformer

Whisper transformere.g. New York• 420 MVA, 345 kV• Noise level of only 57 dB(A)

– 20 dB(A) lower than standard design

GIL (Gas Insulated Line)e.g. PALEXPO, Geneva, Airport Frankfurt• Transmission behavior similar to overhead lines• Very low electromagnetic emissions

GIS (Gas Insulated Substation)e.g. Moscow• Space-saving installation • Improved security of supply• No interruption of power supplies during conversion• Possibility of grid expansion

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 9 ©Siemens AG 2008

Planning of fast growing

networks

Example of optimizing distribution grid:Greenfield planning for Mumbai

High equipment loadingHigh power lossesHistorical grown and non-extendable structureNon-secure concepts

Actual Future

Ensure sustainable investmentsDecrease environment impactsIncrease security of supply

CRITICAL SITUATION SECURE SITUATION

Long term planning enables sustainable power system development

Energy SectorOctober 30, 2008 Dr. Udo NiehageSlide 10 ©Siemens AG 2008

Take-aways

Grid planning also for distribution grids to prepare for future energy demands (Smart Grid)

Analysis of transmission grids with consideration of regional needs

Optimize grid structure with various transmission possibilities

3

1

2