Climate protection in China: Siemens expects increased demand for environmentally compatible infrastructure

China is facing major challenges: rapid economic growth, increasing urbanization and major events like the up-coming 2008 Olympics and Expo 2010 are creating a need for advanced infrastructure. The main focus is on the fields of energy and transportation. At the 2007 session of the People’s Congress, the Chinese government announced that conserving energy and raw materials, and protecting the environment were priority issues. Siemens sees this as a major opportunity. “The Siemens portfolio in China is ideally positioned for providing a modern, sustainable and environmentally compatible infrastructure,” said Dr. Richard Hausmann, President and CEO of Siemens Ltd., China. “We are optimistic that, by 2010, we will double the sales of our Regional Company in China from their current level of roughly €5 billion.”

The technical know-how to handle the climate problem already exists. “The levers are the efficient use of energy, the reduction of emissions, and renewable energy,” explained Hausmann. Urbanization and rapid economic growth present enormous challenges, as the Chinese megacities clearly demonstrate. The Chinese economy’s growing need for energy – experts predict an annual increase of up to 20 percent by 2020 – makes action imperative, since China currently obtains some 70 percent of its energy from coal. This results in huge emissions of harmful carbon dioxide (CO2). Today China burns 2.1 billion tons of coal a year, more than the U.S., the EU and Japan put together. The most populous country in the world will probably overtake the U.S. by 2009 as the largest producer of the greenhouse gas CO2.

“Coal-based power generation is only one of the fields where Siemens technology can substantially reduce the emission of gases harmful to the environment,” explained Hausmann. “All the Siemens Groups offer solutions for improving energy efficiency and sustainability which can help protect the climate. We expect a marked increase in investment in these areas in China,” continued Hausmann. The authorities in China are already using climate-friendly technologies to further improve the quality of life in the country, as shown by the following examples.

In the power generation sector, the Waigaoqiao II coal-fired power plant installed by Siemens in Shanghai, with a capacity of 2 x 900 megawatts (MW), is setting new standards. Thanks to advanced power plant technology based on so-called supercritical steam parameters (high steam temperatures and pressures), Waigaoqiao II is already cutting CO2 emissions by 2.1 million tons a year. The combined cycle power plant (CCPP) Huaneng in Shanghai is one of China’s most efficient power plants. The three units – each with a capacity of 400 MW – achieve an efficiency of 58 percent. This type plant combines a gas turbine and a steam turbine, thus offering the many benefits of both types. But efficient power transmission also has an important role to play in climate protection. In this sector, Siemens’ Power Transmission Group (PTD) has, among other things, signed a contract within the last year to provide efficient power distribution for Chong Qing, one of China’s up-and-coming industrial locations. The world’s largest conurbations, which is a center for the Chinese automobile and motorcycle industry, has been one of Siemens’ most important regions in China since 1995. Siemens’ Industrial Solutions and Services Group (I&S) and the company’s Automation and Drives Group (A&D) are ensuring more efficient energy utilization in a large number of factories in the Chong Qing area.

The Chinese megacities clearly demonstrate the climate-friendly benefits of public transportation systems of the kind supplied by Siemens’ Transportation Systems Group (TS). Solutions for rapid transit and long-distance rail links guarantee the problem-free transportation of passengers within and between China’s cities. In Beijing, the extension of Metro Line 5 is a key project for Siemens. When it is completed, north-south journeys across the city will be much faster and less complicated. Siemens is also equipping Metro Line 10 and its branch line to the Olympic Games sites with state-of-the-art signaling and control systems. The use of Siemens technologies will enable the trains to be run at much closer intervals, with their actual frequency adjusted rapidly and flexibly to passenger volumes. Siemens metro trains are already successfully operating in Shanghai.

The construction of the high-speed line between Tianjin and Beijing is a key project in the long-distance transportation sector. To provide an optimal link between the two locations of the Olympic Games, this stretch of China’s planned high-speed network will be completed first, by 2008. To expand the line, the Chinese railway ministry has placed a €669-million order for 60 high-speed Velaro CN trains from Siemens. The first trains of this type – which will be able to reach speeds between the two cities of 300 kilometers per hour – will be in operation in time for the 2008 Olympic Games. The Guangzhou metro is another major TS project. The Siemens Group is installing the metro’s power supply, operations control and passenger information systems. TS is also supplying 40 metro trains this year.

Siemens’ intelligent building technology is making an important contribution to climate protection. Using the latest control and instrumentation technologies can cut the energy requirements of buildings by some 20 percent. A further 50 percent reduction can be achieved through structural innovations. Here, too, Siemens China is setting new standards. Equipped with the latest building technology, the company’s new headquarters in Beijing are proof that environmental protection and profitability need not be a contradiction in terms. In addition to good insulation, energy-saving equipment and properly designed workplaces, the building has an intelligent control system which centrally regulates many of the structure’s functions, such as the fire alarm, water supply, lighting and air-conditioning systems. Siemens is also building new headquarters in Shanghai. With 45,000 square meters of floor space, it will not be much smaller than the new Beijing building with its 54,000 square meters. The new EXPO 2010 administrative offices are also equipped with the latest building technology from Siemens.

Siemens provides the technologies needed to meet the challenge of climate change and is investing in the corresponding sectors. Around 50 percent of the 5.7 billion euros that the company spent on R&D in fiscal 2006 went for environmental and climate protection. Siemens has been active in China since 1872. In fiscal 2006, Siemens posted sales with Chinese customers of €4.4 billion. Siemens has 60 regional offices in the country and a workforce of over 43,000.

Siemens AG (Berlin and Munich) is a global powerhouse in electrical engineering and electronics. The company has around 475,000 employees (incl. discontinued operations) working to develop and manufacture products, design and install complex systems and projects, and tailor a wide range of services for individual requirements. Siemens provides innovative technologies and comprehensive know-how to benefit customers in over 190 countries. Founded more than 155 years ago, the company focuses on the areas of Information and Communications, Automation and Control, Power, Transportation, Medical, and Lighting. In fiscal 2006 (ended September 30), Siemens had sales of €87.3 billion and net income of €3.033 billion, according to U.S. GAAP. Further information is available on the Internet at: www.siemens.com.