Making EfW work at Siemens and beyond

Written by: Geraldine Faulkner | Published:

Mike Houghton, Siemens UK & Ireland’s MD – Process Industries & Drives, discusses his company’s role in the energy from waste market, and wider industry issues – including the impact of the UK’s ever-controversial membership of the European Union. Geraldine Faulkner reports

If one company could lay claim to having a finger in every technological pie, it would undoubtedly be Siemens UK & Ireland. As a global enterprise it offers a multitude of services in a dizzying variety of the process sector, which unsurprisingly includes energy from waste.

I say ‘unsurprising’, as EfW also comes under the heading of the process sector since it processes bulk resources (residual waste) into other products (electricity and heat).

And to be able to compete in the worldwide processing arena, according to Mike Houghton, MD – Process Industries & Drives, Siemens UK & Ireland, requires solid market expertise, technology-based services and software for industrial processes.

Where does Siemens UK & Ireland sit in the EfW market?

“We’re a significant player and committed to a sustainable multichannel generation. For instance, our investment in the UK wind assembly plant is over £300 million while, in offshore energy, I believe Siemens has over 50% of the market. In terms of where we are now, we are a significant contributor to the whole energy landscape, and increasingly in how that generation is created.

“Today we are moving into a different phase in how that energy is distributed. In years gone by we had large coal-fired power stations, whereas now you are seeing the proliferation of smaller energy production providers, solar cells on roofs, and EfW facilities that pop up in local councils. That’s giving us a different challenge,” admits Houghton, who is a Siemens man through and through.

Before being appointed to his current role, Houghton was Siemens’ divisional director of industry services, responsible for the project office – supporting the technology divisions with their programmes.

Services on offer

Houghton’s part of the Siemens empire offers clients automation technology, industrial control and drive technology, as well as industrial software from product design and development to production, sales and service.

The MD acknowledges we are living in “interesting times” and, when asked if the Government is unclear about the direction it is taking in terms of energy generation, he politely but firmly disagrees.

“I don’t think the direction that is being taken is unclear. Yes, it is true the Government is committed to nuclear capacity, but I don’t think we’re going to end with the base load as in the past, comprised of oil rigs and gas-powered stations. Today, it’s more a case of being half-caste; we have lots of renewables and plenty of solar-generated energy and even shale, once the furore over it has settled down.

“Essentially, we are seeing the proliferation of smaller systems. One system we’re currently looking at is how we can get wind energy into a form that we can store. All in all, there is a lot to think about.”

Like many other EfW pundits, Houghton recognises the challenges of working in an energy sector where there are uncertainties; uncertainties in subsidies and in technologies.

Building confidence in EfW

“If you want to invest in EfW, you have to bear in mind that investors don’t like change; they want security. Any business can deal with the facts as they are, but one in an industry where there are changes upon changes – business leaders struggle with them. To have stability in EfW, investors need to have confidence in order to invest in future assets. So it is understandable that the market doesn’t like changes as it may undermine confidence.”

No surprise then that some programmes are getting pushed back and kicked into the long grass. To ensure this doesn’t happen to projects that Siemens UK & Ireland is involved with, the company needs to pick those it works with carefully. When invited to work with clients, what does Houghton look for?

“I look for the style of the organisation. Is it more management-oriented? Does it have the disciplines to put the processes in place and deliver budgets? It needs good management, leadership at the top and proven expertise of what they do. Can those at the top prepare the organisation to embrace and adopt change? My experience is that the most successful companies prepare their organisation to accept change in a progressive manner.

“One of the best companies we have worked with was led by people who understand constant evolvement. If evolution is in the DNA of the organisation and at a continuous level, you will find lots of incidents of improvement, with most of it being bottom-up,” states the MD.

Good leadership

“How you engage with your workforce is critical and a fantastic measure of good leadership. An engaged workforce will allow you to tap into its discretionary energy and will go the extra mile.”

Houghton is no stranger to engaging with different teams. As well as being a member of the Siemens country leadership team, he sits on the executive management forum.

“I am also a member of the ICT Skills Panel and I lead the programme for the International Festival for Business, which was held in Liverpool last year and was the biggest one for 50 years. Basically, the IFB is designed for businesses to collaborate and gives them the opportunity to tap into the international market for business.”

Looking at the wider picture is something Houghton feels passionately about, including the UK’s position regarding its membership of the EU.

“Business doesn’t like uncertainty,” reiterates the MD. “I think it’s important to be part of the EU as we have benefited from it. Very often you hear people say there’s this regulation that’s come out of Europe, and it gets into the headlines. However, what people fail to understand is that one regulation is there to replace 26 regulations that were there before. We should focus on what that regulation is there to do.”

Houghton points out that the EU is the biggest marketplace in the world.

EU referendum

“We’ve got to encourage local businesses in the UK to tap into the European market and I believe there’s a lot of opportunity to improve their penetration. With regard to the proposed EU referendum, it should be a reasonable debate and not overtaken by passions that would lead to a negative outcome. We do need reform in the EU, but we are much better in than out. It’s my personal opinion that we haven’t done well in promoting the benefits of the EU and, by cutting ourselves off from Europe, it will make the world a harder place in which to do business.”

The MD also expresses impatience with developers who don’t make the effort to look beyond the confines of the EfW industry and learn from other sectors.

“I look at EfW and how every time we build a facility, the experience offers economies of scale that means you can carry on improving systems. Someone can invest in productivity improvement so that the return of investment could be on multiple levels, thus becoming more viable and consequently self-propagating.

“Industrialisation of these plants, and with the Government’s construction 2025 agenda to reduce costs by 30%, lower emissions by 50% and improve exports by 50%, means that you can adopt a similar process in EfW by building commercial facilities on an industrial scale, which I feel could be easily achievable.

“I do really hope we make a start in thinking along these lines. After all, it is all about construction and building big assets. The other ‘challenge’ is the need to include the operational spend; for instance, sourcing the feedstock. If you get that bit wrong, it can cost up to 13% more,” warns Houghton.

Productivity through technology and innovation is an issue that clearly occupies the MD a great deal. “How can we incentivise manufacturers and industry at large? More often than not, this is achieved through tax incentives. In the UK we tend to make do rather than investigate innovation. Manufacturing is in need of investment, and patching over it with sticky tape leads to a lack of productivity.”

He goes on to warn: “There isn’t a single silver bullet to solve all these issues.”

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