In Conversation with Marco Wirén

5 min read

22 Jul 2020

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Lara McCoy

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Wärtsilä

5 min read

22 Jul 2020

Text:

Lara McCoy

Photo:

Wärtsilä

In his seven years at Wärtsilä, Marco Wirén has seen the energy business evolve to weather economic challenges and changing environmental priorities. Here he shares his insights and the lessons he will take with him.

What are some of the most significant changes you’ve seen in the energy industry in your seven years at Wärtsilä?
We have seen a huge transition in the energy industry. There is now a lot of talk about going from fossil fuels to renewables, and we have seen a huge increase in the share of renewables. This transition is creating a lot of opportunity for us in the energy business.

A year ago, we redefined our strategy and our vision for a 100% renewable energy future. Now our strategy and actions are very clear. We have also established ourselves as one of the top players in the energy storage market. We see that storage is an important part of flexibility in addition to the engine-based solutions that we are offering to our customers.

In the energy industry, long-term partnerships have become increasingly important. And at Wärtsilä, we are more centered around the customer. We look to the customer not only for one deal, but to determine what is important for them over the whole asset lifecycle and find out how we can also improve that value over that time period.

What kind of technologies have the most potential to transform the energy sector in the coming years?
We will definitely see more and more renewable technologies, and as they take a larger role, there is a need to have something that is balancing the volatility and unpredictability that comes with renewables. That is where both storage and engine-based power plants come in. To get to a 100% renewable energy future, you run these engine-based power plants with non-fossil fuels, synthetic fuels or fuels like ammonia and so forth.

Wärtsilä has faced some challenges both internally and externally. Now Covid-19 has introduced additional changes in the marketplace. How is the company positioned to weather the crisis?
Yes, we have seen some challenges. This is the first time we’ve seen both segments, marine and energy, have such a downturn at the same time, and of course that has affected our profitability at the group level. But we remain committed to delivering for our customers. While it has been a struggle for both sides, the new organisation that we recently put in place is giving us more focus. The company as a whole has been transformed from a functional organisation into one focused on profit and loss responsibilities, with clear accountability and ownership, and the philosophy of how to run the company has changed as well. I believe this change is good for the whole company – and our customers.

Do you think the Covid-19 crisis can encourage the expansion of green energy options?

I believe that Covid-19 will actually speed up the transition to green energy. What we have seen in Europe is that when Covid-19 hit these countries, the generation of electricity overall went down and the share of renewables increased a lot. We created the Energy Transition Lab where we can show the facts and figures on how the European market has been functioning over the past few months. Now decision-makers can see real-life examples of how energy systems with a high share of renewables would function.

They also understand that flexibility is so much more important than anyone understood before. Germany, for example, had to sell electricity at negative prices to neighbouring countries because their system was too inflexible, and that was quite costly for them.

Do you think that incentives and stimulus plans work to encourage greater use of renewables?
I think that when you have incentives and subsidies, it is always important to clarify the end result you want to reach and create the right type of incentives that considers the total picture.

For example, we have seen some places talking about a ban on all fossil fuels immediately. If you do that, you will need to increase your electricity prices dramatically, maybe by four times, to create a 100% renewable system. But if you have a system that is 20% natural gas and 80% renewables and storage, the price can be lower than what they are paying today. And if you want to use biofuels in engine-based systems, then the price can be lower than having 100% solar and wind generation. So that is why it is important to understand the whole picture and decide on the main goal we want to reach.

In terms of international agreements, I think the overall plans are very good and they give some direction, but when you get to the country level, what’s important is how to implement these plans. It’s easy to say ‘let’s go 100% renewable right away.’ We would like to see that as well. But how to secure that so we have reliable, affordable, and renewable electricity 24/7 – that’s the equation that has to be solved in the best possible way. When we have shown politicians and decision-makers our modelling of different countries and regions, they understand that engines and storage are absolutely the best way to balance the intermittency that comes with solar and wind power.

And if they want to go to renewables right away, that is possible as well. Synthetic fuels are available already today, biofuels as well. California is a good example here. They have the ambition to go 100% renewable and they have deployed a lot of wind and solar. Then they bought an engine-based power plant from us that will run with biofuels, so they have a 100% renewable system.

What lessons from your time at Wärtsilä will you take with you to your new role?
I’ve learned a lot that I will take with me to my new role and new company. One thing is that it’s important that everyone is committed to the same vision. At Wärtsilä, we have people in very different roles, but they stand behind the energy strategy. This is one of our strengths.

Communication also is something that I see as very important. Wärtsilä people are very open, and the more we have discussions and communication between different entities, countries and different roles, the more we understand how we can do things in a better way. Together, we can do so much more than individuals or specific teams. This is something I will bring to my new role as well.

Nokia is also going through a challenging time and a reorganisation at a difficult economic moment. What lessons did you learn from Wärtsilä’s reorganisation?
In the reorganisation that we did in Wärtsilä Energy, communication was key, but another thing I see as extremely important is that we all have to understand why we are doing this. The ’why’ is the absolutely most important thing. If we can illustrate and motivate people by increasing their understanding of why we do things, then we can do it together. Otherwise it seems that someone just decided that we do this, and you don’t have the same commitment and engagement.

You wrote in your farewell note that Wärtsilä’s work contributes positively to society. What kind of role do you think corporations should play in society?
My belief is that every company should be a good citizen and think beyond the profits. A company’s purpose is an extremely important driver. Every one of us wants to be proud of the company where we are working and contribute to society in a better way, and this will benefit all stakeholders. When employees talk to their friends and family, they should be proud that we are doing something for the good of society. Customers will benefit as well. They will get better service when employees are proud and want to do their jobs. And the owners will then get the returns they need and it comes full circle back to the employees when they have a financially sound and stable and well-regarded employer.

Focusing on sustainability is also a very important part of being a good corporate citizen. We want to do our part to build a strong society and leave something positive for the next generation.