© OOO Siemens in Russia Sector Energy Making Russia Energy Efficient - Energy Efficient Cities and Towns Pilote Yekatarinburg: A Cooperation of the Russian Government and Siemens under participation of German and Russian industry, supported by DENA and the German Government Making Russia Energy Efficient - Energy Efficient Cities and Towns June 15, 2010 Hans-Juergen Wio Vice-President of OOO Siemens in Russia CEO Siemens Energy in Russia and Central Asia

15 th June 2010 © Siemens Russia 2010 Slide 2 Energy Efficiency in Russian Federation: One of the most discussed topics «By 2010 Russia should become 40% more energy efficient» July 2008 Д.А. Медведев Президент Российской Федерации Yes - we can fulfill Presidents expectations

15 th June 2010 © Siemens Russia 2010 Slide 3 Making Russia Energy Efficient - Energy Efficient Cities and Towns 1. The Challenge - Sustainable Urban Infrastructure 2. Energy Efficiency Studies 3. Siemens Solutions for Cities 4. Pre-requisites for success in Russia

15 th June 2010 © Siemens Russia 2010 Slide 4 Cities are the growth engines for national economies Compe- titiveness Environment Quality of Life Governance Challenge to balance between competitiveness, environment and quality of life Sustainable Urban Development Megatrends Globalization & Urbanization Global players/trade volume increase 2030: 60% of population in cities energy / buildings / mobility / water infrastructure are key Demographic Change 65+ generation will nearly double by 2030 (from 7% to 12%) Need for adequate infrastructures as well as health- and elder care Climate Change Cities responsible for ~80% GHG Need for resource efficiency and environmental care Cities are competing globally to make their urban areas attractive to live and to invest in Megatrends imply significant challenges for city decision makers

15 th June 2010 © Siemens Russia 2010 Slide 5 Making Russia Energy Efficient - Energy Efficient Cities and Towns 2. Energy Efficiency Studies 3. Siemens Solutions for Cities 1. The Challenge - Sustainable Urban Infrastructure 4. Pre-requisites for success in Russia

15 th June 2010 © Siemens Russia 2010 Slide 6 Implementa- tion studies in major cities Green City Index City sustainability trends & challenges Siemens insights into how to become energy efficient, jointly developed with major world cities Megacity Challenges Study Comprehensive analysis based on interviews with over 500 city managers in 25 selected megacities Urban infrastructure trends and challenges as well as global best practices Green City Index Index compares cities across 8 dimensions of sustainability: CO 2, Energy, Buildings, Transport, Waste & Land Use, Water, Air, Governance Started in Europe, rollout in other regions started Sustainable urban infrastructure studies / projects Studies on how to become a sustainable city with focus on resource efficiency Examples: London, Munich, Yekaterinburg Shanghai, Dublin, Trondheim,...

15 th June 2010 © Siemens Russia 2010 Slide 7 Londons own measures combined with effective policies and supervision trigger the changes 48% 3% 21% 28% Examples: Public buildings Hybrid buses Traffic management City Individuals Examples: Buildings insulation Low-emission cars Efficient household appliances National level Businesses Examples: Biofuels Central electricity supply (grid mix) Examples: Lighting in commercial buildings Cooling displays Decentral energy (CHP) Siemens Sustainability Study – Example London

15 th June 2010 © Siemens Russia 2010 Slide 8 Full impact only if private sector incentivized to take initiative FindingsConclusion Levers Abatement potential Mt CO 2 Average abatement cost EUR/t CO 2 Additional invest- ment bn EUR Transport Buildings Energy Insulation Heating efficiency Lighting Appliances Other Higher car efficiency Biofuels Hybrid passenger cars Hybrid bus Other Energy mix CHP , – ! Two-third of all CO 2 - abating technologies pay back their investment Around 75% of the abatement potential lies in the hands of individuals/ businesses who make technological choices The total investment required constitutes less than 1% of Londons total economic output until 2025

15 th June 2010 © Siemens Russia 2010 Slide 9 A different look on the results offers a perfectimplementation road map Source: McKinsey & Company Abatement cost – buildings sector EUR/t CO 2 – decision maker perspective Cumulative abatement potential Mt CO Lighting Office appliances Hot water insulation Display cabinets Drives Cavity wall insulation Public lighting Electric appliances Condensing boilers Loft insulation Air conditioning Optimisation of buildings controls Cooking Heat recovery Improved heating controls Solid wall insulation Insulation schools Lighting Floor insulation Insulation office Draught proofing Windows Large cooling Cooling with renewables More efficient new builds Small cooling Residential Public and Commercial >0

15 th June 2010 © Siemens Russia 2010 Slide 10 Russia develops international partnerships in sphere of energy efficiency – St. Petersburg Russian/German agreement on cooperation in sphere if energy efficiency between Merkel/ Medwjedew – Munich Ceremonial signature of RUDEA cooperation Energy Dialogue Russia – European Union IPEEC - International Partnership for Energy Efficiency Cooperation Focus Target: Significant decrease of power resources consumption in Russia

15 th June 2010 © Siemens Russia 2010 Slide 11 Energy Efficient City Ekaterinburg – Russian/German pilot project with Siemens leadership Energy efficiency potential 2020 in TWh/a 1) Derived from difference to most common used / best technology from reference database 2) Combined Cycle Power Plant Source: Team Ekaterinburg Baseline primary energy 2020Baseline primary energy 2020Baseline primary energy 2020 Efficiency potential – Most common 1) 2020 at Most common Efficiency potential – Best 1) 2020 at Best Most common Basic wall insulation 2-plane windows Efficient drives Optimization of district heating boilers … 62 (-79%) 34 (-44%) Best Super insulation 3-plane windows Frequency converters Combined Cycle Smart Grid … Adoption of "common" technology can save 44% of primary energy by 2020

15 th June 2010 © Siemens Russia 2010 Slide 12 Energy Efficient City Ekaterinburg – Russian/German pilot study to be presented in St. Petersburg Strong commitment and support from Government Sverdlovskaja Oblast

15 th June 2010 © Siemens Russia 2010 Slide Key levers 1) Shown impact is after Wall Insulation and Triple-glazed windows are implemented Source: Team Ekaterinburg Effic. potential in TWh/a of primary energy CAPEX in mil. EUR Avg. savings p.a. 2010–2020 city in mil. EUR Payback city & gas provider with capital costs, years Expertise provided by 2) Suggested to implement before levers related to automation of buildings Payback city & gas provider w/o capital costs, years Implementation would pay back in ~6 years Key levers Process improvement., e.g. steel Frequency converters Traffic management system Cogeneration (CHP) Insulation of district heating pipes TWh primary => 22% points of potential Triple-glazed windows Heat recovery ventilation (HRV) Heating controls 1) Wall insulation 2) Water saving devices Building automation (e.g. HVAC) 41 2, tbd ~3,600 Energy-saving lamps tbd tbd tbd – – 0.3 tbd Better Trans- port Build- ings Indus- try Energy

15 th June 2010 © Siemens Russia 2010 Slide 14 Different parties will benefit from energy saving Source: Ekaterinburg team Total potential of energy saving: - 44% Ekaterinburg + = Two-fold impact 12 Major levers Additional levers City: decrease of energy consumption Gas suppliers: Export (or economy) of gas becomes available thanks to reduction of power consumption in the city Total: extra profit from country point of view: 3,1 bln. Euro by % primary energy reduction by applying "common technology" (~50 levers) Most relevant 12 levers: Achieve 22% points of reduction potential Require 3.6 bil. investments Half of the energy efficiency potential in Ekaterinburg can be achieved with the 12 levers Energy usage reduction

15 th June 2010 © Siemens Russia 2010 Slide 15 ~100 bln. investments ~100 bln. total positive effect Key 12 levers: Extrapolation to Russia (~60%) Rollout of Yekaterinburg energy efficiency to Russia would generate ~100 billion EUR benefits by 2020 Krasnoyarsk Yakutsk Murmansk Moskau St. Petersburg Ekaterin- burg Wolgo- grad Rostov Chabarovsk Anadyr

15 th June 2010 © Siemens Russia 2010 Slide 16 Making Russia Energy Efficient - Energy Efficient Cities and Towns 2. Energy Efficiency Studies 3. Siemens Solutions for Cities 1. The Challenge - Sustainable Urban Infrastructure 4. Pre-requisites for success in Russia

15 th June 2010 © Siemens Russia 2010 Slide 17 We cannot solve everything with technology, but we cannot solve anything without Existing technology achieves high gains along entire energy conversion chain CO 2 -free energy to the city Example HVDC: China 800 kV, 6.4 GW, 2,000 km Building technologies 30% less energy used through building energy management SIPLINK 12 tons less CO 2 emissions per ship and day by local grid connection High-voltage urban link Efficient energy transport by HV close to the consumer Industry 40% less energy consumption with variable-speed drives Complete Mobility Higher attractiveness of public transport (reduced waiting and up to 20% fuel savings) Street lighting Potential in Europe: 3.5 million tons less CO 2 emissions with LED systems Renewables Wind turbines: Efficiency up from 1 MW to 3.6 MW Efficient energy production Combined Cycle: from 50% to 60% Steam Power Plant: from 40% to 47% Traffic management system 30% less downtime with Progressive traffic signal system

15 th June 2010 © Siemens Russia 2010 Slide 18 The worlds most powerful gas turbine – proven efficiency and output 375 MWGT 570 MWCC 40%GT efficiency > 60%CC efficiency

15 th June 2010 © Siemens Russia 2010 Slide 19 Ветроэнергетика РФ сегодня и завтра SWT-2.3 ( ) SWT DD SWT-3.6 ( ) 4 ноября 2007: внесены изменения в Федеральный Закон 35 «Об электроэнергетике»; 3 июня 2008: Постановление Правительства РФ 426 «О квалификации генерирующего объекта на основе возобновляемых источников энергии» 8 января 2009 года: Распоряжение Правительства РФ 1-р, определило основные направления государственной политики в области развития электроэнергетики на основании использования возобновляемых источников энергии. К 2020 году планируется увеличить долю возобновляемых источников в производстве электроэнергии до 4,5 % без учета крупных ГЭС, что составит порядка 80 млрд.кВт час выработки. Законодательная база РФ Проект государственной программы энергосбережения и повышения энергетической эффективности на период до 2020 года предполагает ввод к 2020 году 4,75 ГВт мощностей на основе энергии ветра Умеренный сценарий Агентства по прогнозированию балансов и Института энергетической стратегии предполагает ввод к 2020 году 7,5 ГВт мощности ВЭС Сценарии развития ветроэнергетики в РФ Ожидаемые шаги в части компенсирующих тарифов в РФ Директор департамента государственной энергетической политики и энергоэффективности Минэнерго РФ г-н Михайлов на конференции REnergy2010 в мае этого года заявил, что из четырех подзаконных актов, требующихся в развитие положений федерального закона «Об электроэнергетике», два приняты. Еще два, представляющие особый интерес для потенциальных инвесторов – еще на стадии разработки и согласований. Ожидается, что до конца этого года РФ будет иметь законодательную базу, обеспечивающую возможность широкомасштабного внедрения проектов возобновляемой энергетики. Технический ветропотенциал РФ Технический ветропотенциал РФ составляет порядка ГВт потенциально возможных установленных мощностей ВЭС Разрабатываемые проекты по строительству ВЭС в РФ Современные ВЭУ* Сименс На сегодняшний день в стадии проектирования уже есть проекты по строительству ВЭС в таких регионах как: Краснодарский край, Калмыкия, Волгоград, Калининград, Алтайский край, Дальний Восток. Сименс предлагает полный спектр решений для строительства ВЭС. Линейка продукции Сименс постоянно совершенствуются и сегодня мы уже предлагаем ветроустановку нового поколения SWT-3.0 с технологией прямого привода.

15 th June 2010 © Siemens Russia 2010 Slide 20 Широкомасштабное внедрение ВИЭ* Технический ветропотенциал всего Дальневосточного административного округа составляет порядка млрд.кВт час/год. Для зон с децентрализованным электроснабжением очень интересной представляется идея Ветро - Дизельных Установок Повышение надежности энергоснабжения для зон с децентрализованными энергосистемами Экономия дизельного топлива до 60 % Снижение затрат на транспортировку дизельного топлива Увеличение срока службы дизельгенератора на % Снижение вредных выбросов в атмосферу Технический ветропотенциал Дальнего Востока Ветро - Дизельная УстановкаПредпосылки для использования Ветро – Дизельных Установок Предпосылки для широкомасштабного использования ВИЭ Экономия ископаемого топлива Улучшение экологической обстановки в регионе Создание новых рабочих мест при строительстве новых мощностей Создание новых рабочих мест при эксплуатации ветропарков Дополнительные налоги в региональный бюджет Рост научно-технического потенциала Образование молодых специалистов * ВИЭ – Возобновляемые Источники Энергии

15 th June 2010 © Siemens Russia 2010 Slide 21 Cogeneration will save 35% of gas consumption Pilot Ekaterinburg: proposed technology Current technology After new technology is implemented Electricity Heat Gas saving: 35% Gas Boiler CHPSteam power plant Gas Electricity Steam power plant Gas Electricity

15 th June 2010 © Siemens Russia 2010 Slide 22 Electrical capacity: 7,5 MW Heat capacity: 11,7 Gcal/h Overall efficiency: 85% Annual electricity generation: MWh Annual heat energy generation: Gcal Exhaust heat boiler Exhaust pipe Turbine SGT-300 Automatic control system and associated equipment CHP allows to increase energy efficiency by 35% Leasing finance model reduces investment for cities Source: SMART CHP Russia CHP Pilot: description of proposed technology Technical features: 11 mil. m 3 p.a.Gas savings: 23 т/годReduction of CO 2 emissions: 35%Increase in energy efficiency:

15 th June 2010 © Siemens Russia 2010 Slide 23 Innovative solutions to increase energy efficiency Water: Waste water treatment plant at Khon Khaen, Thailand Metals: Arvedi strip production Pulp & Paper: Modernization at Mondi, Austria Energy savings compared to alternative technology Lower energy consumption comp. to conventional hot strip mills Energy savings after upgrade -40%-75% -78% Waste-to-energy solution for a brewery Methane gas won can be used as fuel Compact hot strip process Transformation principle based on cast-rolling technology Higher energy efficiency due to lower power consumption of the new wastewater treatment plant

15 th June 2010 © Siemens Russia 2010 Slide 24 XXX Energy consumption in buildingsSiemens building Munich-Perlach Efficient operation requires continuous optimization and monitoring * Building Automation and Control System No BACS* BACS* without Energy Monitoring BACS* with Energy Monitoring 100% 90% 80% 70% 60% Time Energy consumption BACS* with additional energy efficiency measures What we know about buildings … Importance of building automation and a life cycle approach Heating energy demand reduced by 34% Electricity demand reduced by 15% ROI of less than 2 years

OSRAM Charts | FY 2009 | Page _OSRAM_Charts_GB_ls.ppt | Date: | PR OSRAM - Potential of sustainable development Example with home lamp Easy arithmetical problem: TERMS: Lamp wattage 100W (0,1KW) Lamp price 15 rub. Lamp lifespan 1000 hours 1000 hour of burning per year 3 rub/KWh QUESTION: what are annual expenses for lighting coming from? Possibilities in professional lighting More installed power capacities More burning hours More investments into equipment Maintenance of fleets of equipment MORE POSSIBILITIES FOR ENERGY SAVING!!! New technologies More effective types of light sources More effective luminaries SYSTEM approach to SYSTEM of lighting OSRAM: worlds principal manufacturer of light sources Established in 1906 as joint venture of SIEMENS and 2 other companies 100% SIEMENS owned from 1978 Market leader in Russia Large factory in Russia, 1500 employees OSRAM at glance

15 th June 2010 © Siemens Russia 2010 Slide 26 1) ICT = Information and Communication Technologies Paradigm shift in power grids: The new age of electricity Electrification of society 'Age of Coal' 'Generation and load closely coordinated' Supply island with stochastic load Extensive generation of electrical energy ' Age of fossil fuels' 'Generation follows load' Integrated network, central generation, load stochastically predictable, unidirectional energy flow Fossil energy source, hydro Fossil energy sources, hydro, nuclear No environmental concerns 19th Century20th Century Shift to new age of electricity Challenges require rethinking: 1.) Demographic change 2.) Scarce resources 3.) Climate change 'Energy system shifting' Increasingly decentralized, fluctuating generation 'consumer' becoming 'prosumer' Fossil energy sources, hydro, nuclear, biomass, wind, solar Early 21st Century Environmental awareness Unsustainable energy system The new age of electricity Electricity will be the energy source for most applications in daily life. Integrated energy system with power grid as backbone 'Load follows generation' Central + decentralized generation, intelligence with ICT 1, bi-directional energy flow Renewable energy sources (solar, wind, hydro, biomass), 'clean' coal, gas, nuclear End of 21st Century Sustainable energy systemUnsustainable energy system

15 th June 2010 © Siemens Russia 2010 Slide 27 Moscow Ring / Beskudnikovo – Switchgear view 27 ha AIS or 6 ha GIS GIS and AIS, flexible in cost position or environmental ground savings -77%

15 th June 2010 © Siemens Russia 2010 Slide 28 District Heating The Siemens City Management solution approach: Coupling of todays separated resources supply systems Energy Management From decoupled individual optimization to integrated City Management Building Management Water Management Energy Management Building Management Water Management District Heating

15 th June 2010 © Siemens Russia 2010 Slide 29 Localization contributes to modernization of Russian industry High Voltage products TransformersWind turbines I&C components CompressorsGas turbines Siemens Energy in Russia is fully localized

15 th June 2010 © Siemens Russia 2010 Slide 30 Making Russia Energy Efficient - Energy Efficient Cities and Towns 2. Energy Efficiency Studies 3. Siemens Solutions for the Cities 4. Pre-requisites for success in Russia 1. The Challenge - Sustainable Urban Infrastructure

15 th June 2010 © Siemens Russia 2010 Slide 31 In achieving Russian energy efficiency goals international experience can be leveraged Source: European Council Directives (96/93, 2003/54, 2001/77, 2009/28, 2004/8/EC); Russian Energy Strategy for 2030; German Electricity Feed Act (1991); German Renewable Energy Sources Act (2000, 2004, 2009); Renewables Global Status Report 2009 Update Goals of energy programs worldwide and ways to achieve them The European Union created different directives for its member countries in order to reach goals Germany: incentive model for renewables (& CHP) -was most successful and served as an example for 47 countries worldwide -can be implemented in Russia due to similar goals (Energy Strategy for 2030) Russia already created good preconditions for reaching energy efficiency goals: -Liberalization of electricity market in progress -Feed-in tariffs being discussed Liberalization of energy market 1 Diversification of primary energy sources Increase of renewable energy Efficiency in Energy Sector Reliable Energy Supply Environmental Protection 2 3

Page 32 Month 2010 Author Confidential / © Siemens AG All rights reserved Cooperation between Russia and Europe can be optimized Timeline of events GE RU 1991 EFA 1) 2008 REHPA 5) 2002 CHPA 4) 2000 REA 3) 1998 EMA 2) German goals German Measures st stage2 nd stage3 rd stage 1) Electricity Feed Act 2) Energy Management Act Source: TEAM Smart CHP Russia 2003 Federal law on Electric Power Industry Energy Strategy for 2030 Creating IncentivesFinancing IncentivesSupporting Incentives Feed-In-Obligation Feed-In-Tariff Feed-in-Preference Cost transfer system Completion of liberalization Tariff regulation by FTS 6) Network authority structure reform Reduction of cross-subsidizing Penalties for de-installed meters Adjusted to Russia German Measures 3) Cogeneration Act 5) Renewable Energy Sources Act 4) Renewable Energies in the Heat Sector Promotion Act 6) Federal Tariff Service 12 3 Russian Measures Russian goals Suggested: Transfer of know- ledge and experience 2020 Integrated Energy & Climate Program

15 th June 2010 © Siemens Russia 2010 Slide 33 Prerequisites for successful implementation Source: Ekaterinburg Team Implementation systematic Financing / Legislation Social Mobilization Comprehensive energy efficiency stimulus measures (e.g. loan subsidies, attractive tariff structure) Involvement of key beneficiaries of gas savings (gas providers e.g. Gazprom) Legally worked out menu of financing mechanisms, e.g. Energy Contracting Advertising geared towards changing consumer behavior PR campaigns Well defined energy efficiency program office at the country level with clearly assigned responsibilities Targets cascaded from the country level down to regions, cities / towns Implementation systematic (tools, access to necessary data, clear milestones to reach targets) Statistics Country-wide defined KPI consistently used across the country Energy consumption statistics at multiple levels: city, region, country Transparency of and accessibility to energy consumption and efficiency measures across cities Beyond technology, there are 4 prerequisites for successful energy efficiency program

15 th June 2010 © Siemens Russia 2010 Slide 34 Energy Efficiency in Russian Federation: One of the most discussed topics «By 2010 Russia should become 40% more energy efficient» July 2008 Д.А. Медведев Президент Российской Федерации « The key in not to produce something on paper, but actually to do something about it » September 2009 D.A. Medvedev President of the Russian Federation Todays discussion is a major step towards working on real projects

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