We’re excited to share the latest episode of The Hydrogen Leader Podcast, featuring our very own CEO, Cornelius Matthes. The Hydrogen Leader podcast channel dives deep into the potential of green hydrogen, offering powerful discussions on leadership strategies, career, and fuel cell technology.
You can watch the video or read the transcript summary below – or listen to the podcast on Apple Podcasts and Spotify.
About The Hydrogen Leader Podcast
[Bjorn]: We try to inspire hydrogen professionals to become successful leaders just like you [Cornelius], and to learn how you became so successful and about your insight in this emerging industry.
If I were to ask you who Cornelius Matthes is, what would you answer?
[Cornelius]: I am maybe a bit of a crazy, unconventional person. I’ve done many things when I was small. I climbed a lot of mountains, difficult mountains, and survived. And I’m a person with values. So for me I never compromise on anything. And I love to interact with people to help people and obviously to work on our mission on emissions.
[Cornelius]: Dii Desert Energy, founded in 2009 as the Desertec, is an industrial initiative still around after 16 years. I was appointed CEO almost five years ago when we started the Desertec 3.0 mission, you can say. And we had quite an interesting revival and nobody would have thought that it was possible. So we always like to make the impossible possible as well.
[Bjorn]: Yeah, so I know you reinvented yourself and this is also what we are constantly doing at Hyfindr as well. It’s quite interesting to see. But more a little bit about the person before we come to what you are doing in business. What are you passionate about? I learned that you go on hills and do hiking, but is there anything that you would say you are a driven professional and I’m really passionate about the following.
[Cornelius]: I’m passionate about nature, mountains, special experiences, big challenges. When I was at university I sidled across Tibet for example. And in my life I climbed many mountains and you know you raise a level every time traveling to remote places. Let’s say the difficult things, the challenges, and where people say this is not possible to make it possible.
[Bjorn]: When I met you the first time, I also had the feeling that in your appearance and how you speak, you are very focused. And I learned that you also have been educated in the German military as a sniper. Is that correct? Is this also why you are so focused, so laser focused in what you are doing? How was the impact of this sniper education?
[Cornelius]: Yeah, it’s a good question. Björn. I had the honor to serve in the mountain division kiger of the German ASME, and specifically to apply for the lead of the mountain guides squad which is basically serving the whole battalion on the most difficult things and among them sleeping two weeks in the igloo. In winter. Sniper training has been, I think a very good school as well, because it’s not only about shooting long distances up to spin 50 meters or infrared during night, but it’s about let’s say enduring stress. Keeping calm in extreme situations. And I think during the army, and particularly in such roles, you learn to keep calm in difficult situations, and that’s what I learned as a mountain climber as well. Nothing can really provoke me or bring
me difficulties. And I think this is a characteristic which has been in fact very valuable throughout my personal and professional life. Like a marine seal in business. The most famous are, I think, the US military for this, but the German army also has these special forces.
Leadership Philosophy
[Bjorn]: I have also been with the military, and I think I have still learned many things, including leadership. And I wanted to ask you, because you are, I think in the Middle East, already a very famous person in the energy sector with a lot of impact, so leading other businesses. But I guess you also have a mantra on your leadership approach. So how are you leading people and what do you expect from yourself?
[Cornelius]: Yeah. I did first, let’s say, jobs at university. Also serving in student groups and obviously step by step leading small teams. Then throughout my career in Deutsche Bank. I had quite a fast career. I became a director after just five and a half years and became a board member of the biggest Deutsche Bank organization outside Germany. By far the youngest of all the other board members, years younger. But I think what I saw, you need to lead by example. You need to do things, you need to get your hands dirty and you need to be honest as well. So I would characterize, I am probably more the anti-conservative person. I like to wish people trust and to empower people. I think this is very important, to trust people, to give them the chance to delegate. And then usually people make mistakes. I also make mistakes. We learn from our mistakes and then we improve and to make people feel that this is their baby.
[Bjorn]: And this is how you get people to be a driven professional on their own. If you are leading by example, I could imagine that the people follow you simply because you inspire them.
Dii Desert Energy
[Bjorn]: Now coming to your role in Dii, and before we touch on the business part, I also had the pleasure to meet one of your companions, Paul van Son, and I think he was more or less, I think a very special person and businessman as well. A person who is driven to make a big impact in the world. And he found you probably, how did you connect with Paul and because you moved from Deutsche Bank now into the energy sector, which is also a special move I guess.
[Cornelius]: Yeah, this is always how life goes. It’s a funny connection. That was actually the first elected chairman of Dii when Dii was founded too; he used to be CEO of Deutsche Bank in Italy, and then globally, head of Project Finance. And so he knew I had this passion for renewables, energy transformation. And when he was elected chairman I was an expert in Italy, he knew that I was starting to plan my next move. And he approached me and said couldn’t this be something for you? Would you like me to introduce you to Paul? And that’s what he did. And then with Paul, we immediately clicked and I had this opportunity to completely reset after almost 10 years in Deutsche Bank to start with a startup and completely new, learn many new things from scratch. And that was it really. An amazing challenge, which I really appreciated. And of course, Paul has been my mentor over the years. I learned so many things from him. And so that’s a very important person for sure in my life.
Desertec Initiative
[Bjorn]: And I think what is quite special about your startup, it was basically one of the biggest initiatives in its time Germany was pursuing together with Paul in the solar industry.
[Cornelius]: Exactly. North Africa, to be precise and the Middle East. And in fact Desertec was all over in 2009. They were all superlatives, 400 billion euros, up to 15% of Europe’s electricity demand as clean energy from the desert. And some call it the Apollo emission. So I think on the one hand this contributed to making our plan. To develop large-scale solar and wind in the deserts for the first time made it popular. On the other hand, this was a liability because a lot of unrealistic expectations, particularly on timelines were expected.
[Bjorn]: Can you just describe what the purpose was back in 2009? What technology did you use? And I understand you wanted to build a big cable to Europe and deliver clean energy to Europe and others, so please outline the scope of it, because it was such a mind blowing project.
[Cornelius]: Dii as Desertec Industrial Initiative was mainly launched by German industry. Then the consortium expanded. That was my task as well. From the 13 founders to almost 50 companies from different countries. I think it was something like 16, 17 countries. We brought onboard Italy, Spain, France, in the Middle East, north Africa region, so on and forth. Saudi’s idea has been to set up the conditions regulatory wise, economically, work with governments for developing large scale solar, but also wind CSPPE in different countries in North Africa, and create different sub cables HVTC, high voltage direct current cables, which have a very low electricity loss over long distances. We, besides only 1% of a thousand kilometers and yeah, effectively connecting markets, we did a master plan. The first phase was presented in 2012, where we looked at an entire new energy system, Europe, Middle East, North Africa, almost a hundred percent renewables. So in the sense we were much ahead of our time. All these hundred percent renewable studies were set up.
[Bjorn]: And I think that one of the big lessons learned for me over the last years is that solar really took off once the prices came down, and probably you are 10 years ahead with technology and too ambitious to get this really going. So what were the key learnings that you got from this project? Because I think it did not materialize. So you needed to stop it and then you needed to reinvent yourself
[Cornelius]: I wouldn’t say it was one project, and I wouldn’t say it was stopped. There were certain expectations that were created by the press and by German industry, which were to be frank, really unrealistic. And we had specifically a group of companies that wanted to use our vehicle just to get huge funding for CSPPE, for the parabolic trough or solar tower plans. Which also we absolutely didn’t want to because we saw our mission in when solar and wind was expensive and exotic and there wasn’t anything operational at all to first of all create awareness to open the doors with governments, create bankability, create the regulatory conditions, create markets, create infrastructure. And in this sense I would say we definitely succeeded. If, though you correctly said, it took significantly longer. The turning point was probably the end of 2014 in Dubai when there was, for the first time, a price below 10 cents per kilowatt hour. That was the divide, the Dubai Solar Park phase two, the famous 5.84 cents. When everybody said, this is not possible, because the perception was that solar is at least 10%, 10 cents per kilowatt hour, and then all of a sudden things went fast. Then in just another year we went to 3 cents. Another two years we went to one cents. So there has been a literal collapse of the price per kilowatt hour for solar from 10 cents to one in less than 10 years.And also the price for wind went down in the region here and particularly the United Arab Emirates, but also Saudi scored one world record after another. So this is the reason for the lowest price in the world for solar and wind.
Future of Green Hydrogen
[Bjorn]: What I, in a broader scale, find fascinating because nowadays and now we switch a little bit to hydrogen because basically this is the hydrogen leader. We can learn a lot from it because currently people are discussing a production price for hydrogen of 10 kilo, 10 euro or dollars per kilogram. But everybody says in order to make it really economically viable, it must go below two kilograms and below two euros per kilogram. And seeing that when the solar industry started, there was more or less the same discussion. I find this quite astonishing that we are now at this point. Would you agree with this assessment?
[Cornelius]: Definitely. If we look back now to the 2010’s, or the fact that we predicted certain prices in 2012 in our major study, that’s the ‘power 2050 for 2050’, which was achieved in 2020. In fact prices in 2020 were much lower than our optimistic estimates for 2050. I think this should guide us for what is possible, and I’m a hundred percent sure, that a few years from now we will look back the same. And obviously apart from bringing down the production price, which is two thirds of electricity approximately, and one third electrolytes and CapEx we need to talk about things like introducing a price for CO2 because it is not, the green is too expensive actually. Gray or other fossil forms of hydrogen are simply too cheap and artificially cheap.
[Bjorn]: So what you are saying is on the one hand, there needs to be a journey to reduce the cost per kilogram on the hydrogen sector technology wise. But in a broader sense, you say one of the problems the world is facing because in going green, is that there are still subsidies on the fossil fuel part, which is preventing faster changes. Is that correct?
[Cornelius]: That’s correct.
[Bjorn]: Beyond the beauty about the extremely low prices, the lowest price for solar and wind is that this has been achieved without any subsidies, right?
[Cornelius]: It’s just liquidity bidding. The 1 cent solar, the one and a half, 2 cent wind? So this is with zero subsidies. The problem is, on the one hand, there’s no level playing field because there’s still huge subsidies for fossil. And even more importantly, contrary to Europe where we have a price for CO2. Price for pollution for emissions here in the region and in many countries of the world, we don’t. So if we have a reasonable price and all of a sudden the price for grey or black hydrogen would be far higher and green would be immediately competitive. If you look at studies on what the social and the environmental cost of CO2 is. We are speaking of prices
of more than 1000 dollars per tonne.ETS price is plus minus hundred which where we go
to 50 euro next few years. This is even far below.
[Bjorn]: So the problem is there’s not even a symbolic pricing in the region. And this is apart from the leadership there, United Arab Emirates showed being the first to phase out subsidies, the first to introduce a net zero target. Other countries followed. But unfortunately they didn’t introduce a price for CO2, and this is a big missed opportunity as of now. There are two things that come into mind. On the one hand, I think there are these COP meetings which are taking place I think on a yearly basis with lots of buzz, lots of important people, and then a very small statement. I would think that they tackle these things that you are now talking about at these meetings. Is this true?
[Cornelius]: Yeah I always personally try to avoid COP of course, a platform like COP is important. It’s an important discussion platform. But for me, being a very pragmatic person and let’s say execution-oriented person, these kind of negotiations where you always meet at the
lowest common denominator is quite frustrating. I actually attended COP for the first time in Egypt, COP 27, where we also launched a major initiative with Hydrogen Europe and the German National Hydrogen Council on an Eastern Mediterranean hydrogen pipeline. So that was a specific, concrete and impactful initiative, which is being pursued step by step. COP28 in Dubai. Obviously that was a home, I just walked to the Metro Station and go there. And it’s been a wonderful meeting place and there is obviously the UAE consensus, but at the same time, obviously much more could have been achieved. And Baku was relatively disappointing. There were a few advancements in Article six, for example, but I’m not planning to attend COP30 in Brazil. So there is this a thing where unfortunately always the same countries that block important developments.
[Bjorn]: So this is highly frustrating. Okay bottom line, you are interested in COP if they are bold enough to put a price on zero emission if they would do that would be basically the route forward, right?
[Cornelius]: I think these are one of the things it doesn’t need to be the same price, but the fact that emissions, the fact that pollution needs to be taxed in every country in the world, I think this should be a no brainer and unfortunately I always compare this to tax or ACEs, everybody should have a reasonable tax. There can be a competition on tax, but there shouldn’t be tax or ACEs where there’s zero tax. It’s simply not fair. And the same here. Everybody should have a price for emissions, a price for pollutions. It can vary from country to country. The market step by step will take over, will determine. But it’s absolutely unacceptable that there’s still many countries today where you can pollute. You can throw whatever emissions in the air without paying a penny for that. It’s a scandal.
[Bjorn]: Exactly. And there is something that comes more from a professional point of view. I think there is a whole industry depending on these subsidies also, because I think one year ago I really got into this subject and you find that these big four advisory firms every year, put out a white paper where they give their clients advice, where they can get most of the subsidies for fossil fuel, for oil and gas. And I found this disgraceful these days because, these guys are paid so much and they basically make a big business out of it to help big car companies make more money by polluting the earth. And I don’t get this because this is really frustrating and as long as the politicians are not saying no to, that we can make a lot of PowerPoints and we will not make the impact that we always need to do. So sorry for that, but I needed to comment on it.
Neom Green Hydrogen Project
[Bjorn]: You also facilitate green hydrogen projects and there are very famous ones.I just today saw a LinkedIn post about the Neon Green Hydrogen Project, which is I think probably the biggest one in the world. So can you tell us what you are doing in terms of hydrogen?
[Cornelius]: 16 years ago, solar and wind was exotic, was expensive. When we started hydrogen in 2017, we had this as, let’s say the major topic for our Annual Event in Dubai, thanks to professor Ad van Wijk.
[Bjorn]: Okay. Yeah. Netherlands. He designed the energy system there, right?
[Cornelius]: He is a long-term advisory board member of our organization. And yeah, he saw hydrogen coming much earlier as an important topic. So he put this on top of the agenda
at our annual conference in Dubai. And I remember following that discussions started because people were completely stunned by what he said. He said green hydrogen will happen. And in 2017, you can imagine green hydrogen wasn’t a topic at all. It was like probably solar wind 20 years ago when people said this would become a major source of power. And it is today, we’re selling two terabytes of solar installed and he made both predictions, you can say, different predictions that hydrogen will be bigger than oil and gas combined in a few decades from now, for example. And then exactly for his bold statements. The CEO of ACWA power, at the time Peter Terium, he was almost leaving already, but he was still in RWE and CEO of energy. And together also thyssenkrupp, our long-term partner, discussions started on what the implications of such statements could be if they’re really true. And when discussions about a project of a magnitude, it wasn’t of course called neom green hydrogen at the time, but that was also the same year that neom started, then less than a year later, Peter went to Neom to lead energy, water and food. And then obviously this, these discussions continued and eventually. In July 2020 Neom green hydrogen was announced. And this stunned the world. It is, as you said, by far the largest green hydrogen project under construction anywhere on the planet. So the sheer scale, also the economics, they really stunned the world. And I think most importantly, the consortium not only had this bold vision to announce such a project, but to bring it to financial close and reach truly to financial growth. Where which is over more than $8 billion, more than $6 billion debt on a non-recourse project finance basis. These numbers, they’re just staggering. And it is 80% through construction now. So this happened in a relatively short timeframe, and we are extremely proud that these discussions started out of our group.
[Bjorn]: This is fascinating and nowadays I think this speed is often called China speed, but it seems that there is also MENA speed. So let’s stay a little bit on that. So where is that project actually located? Who are the shareholders or the funding partners and how much green hydrogen will be produced with which technology?
[Cornelius]: Yeah, so the project is located in Neom, which you can say is a country, in a country. It’s approximately the size of Belgium. It’s in the northwest of Saudi Arabia. It’s just across the Gulf Aba. It’s just 10 kilometers from Shaha, basically. So just across Sinai and Neom is a place where a new city was built from scratch based on a hundred percent renewable energy with some of the largest pump storage in the world in development, where a ski resort is being built. So there there’s different initiatives, different things being built, and one of them is Neom green hydrogen and the project partners the equity investors are one third Neom, one third AWCA Power, one third air products, and Air Products plays two additional roles. So Air products has the overall EPC wrap, so is delivering the entire project. And as a third role, our products is the offtaker of all the hydrogen. So they basically contributed to make the project anchorable so they underwrote the entire future production of the project, which will have CLD in Q1 2027. So in just a good one and a half years from now. And the amounts are approximately 1.6 gigawatt of wind around two gigawatt of solar pd. And the production of green hydrogen per year will be a bit more than 200,000 tons and 1.2 million tons of ammonia. Also, by the way, there will be the world’s largest ammonia tank, which is almost ready. The jetty to export ammonia will be ready. And as there’s obviously no market really existing for ammonia, it is quite a courageous bet by Air Products. And I would argue that it can be a very profitable bet because less than two years from now, particularly in the first few years, there will be a shortage of green ammonia. And the price is very competitive. They would use that, so it can still turn out to be a very profitable bet. Even though in the meantime, obviously Air Products as a listed company has become a bit under pressure. But my personal opinion is it will be a very smart and profitable bet long term.
[Bjorn]: So on the one hand Air Products is building the project, but the result is basically green hydrogen, which is then transformed into a green ammonia they buy from themselves through this project vehicle, probably. And this is basically going where, is it then consumed in the area or is there plans to export the green ammonia there?
[Cornelius]: It is of course mainly designed for export. Like with all projects, you have an SPV for the project company itself. Then you have EPC, where obviously you need to deliver certain guarantees and financial requisites, so on and so forth. And then obviously, a separate entity is guaranteeing the offtake. And between these are obviously Chinese walls. So that is all according to good market standards. So this is why they have already built the ammonia export terminal for the existing infrastructure. Globally approximately 10% of ammonia production, almost nothing in hydrogen. Because hydrogen is produced and consumed onsite ammonia has a tradable market where you have a bit more than a hundred ammonia ships. And almost all ammonia import export terminals globally. So the idea is exactly to build on this existing infrastructure and to export mainly to Europe, where obviously there will be a sizable demand for green molecules in just a few years from now.
Hydrogen Projects in the MENA Region
[Bjorn]: This is great because what is so different to Europe is we have all these little demonstrator projects with the ambition to show that it’s, technology-wise, working. But where the European projects are really having trouble is bankability and it turns out, it seems, that you have to go big in order to start right. And that is probably the main lesson from this project, that if you don’t be big or be bold, you will not kick this off. But it might have a big impact for kicking off the green ammonia market globally, as I understand.
[Cornelius]: Absolutely. Smaller projects, of course in a relatively early stage market play a certain role as well to get operations under control to test technologies. And to be frank, there’s quite a few challenges as well. But these bold projects, obviously they are a huge sign of confidence and within such a bold framework, we are speaking about 2,200 megabyte of Electrolyzer capacity. Obviously you know I speak regularly, we just had our partner meeting a few weeks back back in Abu Dhabi this year, CEO of Neom Green Hydrogen. I just met him again in Rotterdam. And we always have exciting, inspiring discussions. And I think the message is that obviously every day has new challenges, new problems come up but they’re always being resolved. And this is the test case, the laboratory, in a very bold magnitude. And so there’s a solution and if you look at what projects are in the pipeline, the MENA hydrogen Alliance which we created in 2019 to advance hydrogen economies here in the region and create this link to Europe. We have the hydrogen project tracker and we speak about 121 announced projects in the MENA Region.
[Bjorn]: Wow. So you have this big one flagship project, but you have more than 100 projects
Aside from that?
[Cornelius]: Absolutely. Obviously it’s very important to understand that the only one really under construction is Neom Green Hydrogen now, but we have, in Dubai, we have a pilot operating, its 1.2 25 megawatt Siemens Energy which was already inaugurated five years ago. We have the first green ammonia plant, which has been operating since COP27, in Egypt with our Partner Fertiglobe. And then there’s different stages of projects closer or further from FID where the leaders I will say are Oman, which was around one, round two eight projects. Overall, all of a similar size of Neom Green hydrogen. So these are bold projects. Oman has a huge, let’s say, target and hydrogen, in fact is among the key pillars of Oman’s Vision 2040. So Oman will be a very important player in this field. There’s other projects in Saudi, like at ACWa Power one was safer but offtake a preliminary agreement has been signed just in February and Morocco is advancing fast. Bringing more projects closer to FID and also Egypt. And even Indonesia, was our partner Verbund, for example and the South Corridor project. So there are huge things in the pipeline. If we take the renewable capacity for these projects, we are speaking about around 140 gigawatts. It is of course now the big chance, the big challenge, to bring as many of these projects to FID, financial close, and consequently construction in the next few years.
Challenges and Dynamics in MENA Region
[Bjorn]: And because we, in Europe, we talk a lot about this FID problem, that people plan, but never make it to the financing stage. What is different in your region? Do you have these very wealthy Shaikhs at the back and say, no, we do this because we want to change the country. Or how is it actually working? Is it just a normal finance gain or is there any special thing why these projects can take off in MENA?
[Cornelius]: I would say it’s a bit different country to country. So Saudi obviously, and the six GCC countries have a bit different dynamics because they’re very rich. They have a very high sovereign rating and all consequently managed to attract debt more easily and at a much lower cost. Egypt being sub investment grade is a completely different ball game. Tunisia, Oman is just slightly below investment grade as well. So that’s a bit of a different game in countries like Egypt. Jordan, Tisha, Morocco, development banks like KFW, IFC, EBRD, play a leading role. And they typically provide the debt for these kinds of projects. The equity is provided by the international developers.
Key Players and Financial Dynamics
[Cornelius]: The undisputed leader here in the region is ACWA Power, our mission partner, with whom we’ve been working very closely for the past 15 years now. And then I would say number two is EDF France. They’re very strong here. They have a huge portfolio of wind, solar, and hydrogen projects, even looking at pump storage. A very important player and then many other private sector players. Then you have newer companies like AMEA Power that are even stunning the established players. They just commissioned 500 megawatt wind and solar in Egypt in record time. And they have major green hydrogen projects. You have some of the other international players or even financial investors, like market infrastructure partners, ACTIS, these kinds of companies. And they typically develop the projects, provide the equity. Shaikh or some wealth funds from the Gulf, as of now, play a minor role. Masdar is obviously a hundred percent under different governmental companies in Abu Dhabi and ACWA Power more recently has attracted a controlling stake by PIF, the Saudi Wealth Fund.
[Cornelius]: Yeah. But ACWA Power’s origins are clearly as a hundred percent private sector player.
[Bjorn]: Yeah.I think ACWA Power is a brand name that I have learned is very impactful.
MENA’s Role in Global Energy Transition
[Bjorn]: Okay. What, so what do I get out of this? I have the feeling that your region will be the energy powerhouse for hydrogen and it’s not only projects. It will happen. So this is what seems to drive the MENA region to establish an energy supply system beyond oil. Would you think that is true?
[Cornelius]: Absolutely. If you look at the development of the UAE over the past 20 years it is extremely advanced in diversifying the economy. Dubai, by the way, I never had oil. And Dubai is a place where the world comes to, it attracts most millionaires over the past few years, but it’s not about money. Maybe 10 years ago, Dubai was a Tax Haven. People came to save tax, but this is absolutely not the case. People today come to Dubai. Because it’s one of the centers of the world. It’s a very livable city. I’ve been here with my family for 11 years. We are very happy. It attracts technology innovation. It attracts bright minds, startups. So this is, let’s say, really one of the centers of the world for energy transformation. It’s an Africa hub. So I think this is really what makes the region so exciting. And then Saudi is going through an amazing transformation. Oman is north Africa, the region is obviously a natural partner for Europe. Europe is 80% molecule and 20% electrons. So the question exactly for Europe is where will I get my 8% of molecules in the future? And where will I get them safely? Energy security and not rely on one producer like Russia in the past? Energy security. Green power, safe, sustainable. And there is no better partner. There’s no more natural partner than the Middle East, north Africa region for the many countries that are here. For the diversification, for the investments, even to create jobs, to reduce some of the other big challenges in Europe, it’s like a win-win. You reduce the pressure of migration because you invest in the countries, you create partnerships. And then on top it’s obviously the space available. Europe will never have the space for being self-sufficient. It’s the lowest cost in the world. It’s the fact that you have today’s pipeline infrastructure. You can repurpose natural gas for hydrogen pipelines. So all of that, I think, makes a very positive and really compelling case for the region to become the powerhouse for sustainable, for low, for zero emission energy for Europe and even globally.
[Bjorn]: So I have no doubt that this will happen. This is fascinating. I can see all the excitement in you and you are a great ambassador of the region and I think very inspirational because I think of the hydrogen economy, but overall the energy transition needs developments and people and movements that people believe in. And I think it’s so obvious that in your region a lot is happening and big things are happening. And this is, I think giving me a lot of comfort that the energy transition will take place and that we will not fall back from a hype. Because some people are already discussing the hydrogen economy, are we in a new hype cycle, which is now going down? No. When I hear you speaking it will come.
[Cornelius]: Let me maybe give you another few facts and figures on energy transformation, please. 16 years ago when we started, there was nothing solar and wind. We had the first big wave since the mid-teens and in 2020 we were at 15 gigawatt of solar and wind, almost nothing in just the last five years. We went from 15 to 30 and we, this year, made for the first time a market report where you have an overview on all solar, wind, battery, hydrogen projects in the Middle East, north Africa region. In which we also modeled different scenarios. And according to the development stages, announcements of projects, we believe that a conservative scenario would be 150 gigawatt of wind and solar by 2030, which is five fold from today. But this is a conservative scenario. A more aggressive scenario would be almost 300 gigahertz. And this is not including green hydrogen. Green hydrogen is all separate. And, hydrogen is unstoppable anyway. It’s without an alternative to reduce emissions. For steel-swept mobility, it connects electrons and molecules. It’s for long-term storage. And here in the region there’s no country which is not looking seriously at hydrogen for national strategies and other things. What we need now is a bit more courageous approach. For example, on quotas if you look at Dubai, there is the third largest airport. The UAE is a massive aviation hub. There’s also Sharjah. There is Abu Dhabi airport. There’s the new DDWC airport. It takes Saudi, they just bought hundreds of planes. So all the world, this is here, the center. Imagine if the region introduces a quota similar to the 1.2% in Europe for 2030, so that is probably the best way to step by step to have minimum quotas planned for sustainable aviation fuel, just as an example. But there’s other quotas for the take of mobility, maybe for steel. CBM of course, will have an indirect effect as well. By the way, there’s different green steel plants here in the development, even in the advanced stage construction in Oman, for example. So I think we need a bit more courageous development on this. We need to see two prices here that are at least symbolic to start the development in the right direction. And then obviously here in Europe it is always linked. And Europe very clearly had bold targets, but unrealistic execution. So in Europe, we just need a bit more pragmatic approach. And then step by step things will come. And the amounts we are talking about only for sustainable aviation fuels, huge shipping. Take the Suez canal, this can become the green shipping station of the world for green molecules and green ammonia. And it will happen, I know there are the new things now in the pipeline as well as reducing emissions for shipping. This is very powerful. It just needs to take the last hurdles. But these things are and will happen.
[Bjorn]: And I think I understand where your organization comes in because you perceive yourself as a think tank and you have a lot of things in your head as a CEO. So you have many members who are interested in these projects, right? And so they are the one driving this change, right?
[Cornelius]: Exactly. Maybe we want to explain a little bit about how we work. So we had a very nice, you can call it revival, Desertec 3.0 at the 10th anniversary in the Aland in Berlin 2019. And that was when we started, let’s say, to revive Dii a little bit. We all worked for free and even put our own money in. It was our own baby, just to keep this alive. And then we presented hydrogen at the 10th anniversary and it was a very impactful event and there was so much interest. All of a sudden we went from 20 partners to 120 in just five years. Even we didn’t think that was possible. By the way, we were very selective. So our aim has been to rebuild Dii as obviously the longest-term serving group here, multi technology, completely independent from all sides as a think tank here and with the MENA Hydrogen Alliance. And then ZETA to advance the agenda here, to do the studies for the government. Let me give you another example. In 2017, we did a study on an electricity sub cable between UAE and India and with the GCC interconnection authority. And people said this is completely crazy. That will never happen. Two years ago at C20 in India, this was exactly picked up and became an integral part of the India MENA Europe infrastructure corridor. We are never afraid of, let’s say, being bold in putting forward some crazy stuff. It will come. We just need to be patient. And that is, has always been a guiding principle and in the sense the partners coming on board. And we also distinguish our partner group from the typical industry or trader association, which is typically more heavy on the manufacturing side. So our partners are the big investors, Hy24, Breakthrough Energy, Blackstone, the big utilities developers, ACWA power, EDF, Nareva, AMEA Power. The ones basically that we say are the doers of projects. The ones that are making the projects happen, they’re our partners. And in this sense, we work hand in hand to help them to overcome certain hurdles, to facilitate developments, to create a link between the region and Europe, for example. Now to help on the biggest challenge which is always the offtake to make the projects bankable. And then again, to give you an example on future topics, we created a liquid hydrogen task force. Liquid hydrogen is still a bit of a black box that’s headed by major partners like Enertrag. We jointly developed this to create a bit more transparency on economics, on technical feasibility. And yeah, that’s what we do on the hydrogen side, we did infrastructure studies. On job creation, which is also very important. Localization. So it’s very broad and with our partners, we work very closely, with the aim to make this happen always in a very execution oriented manner.
[Bjorn]: This is great because sometimes you have the feeling people produce these studies and it’s not picked up and it’s not triggering something. But with your track record, it seems that you have the right people reading the right materials and then acting upon it. So this is great.
Natural Hydrogen
[Bjorn]: There are two things that I would like to touch upon in the term of the energy system because I recently spoke to Eric Schafer. I think you also know him very well from green investors, and he’s on the topic, wide hydrogen. And we spoke about wind, we spoke about solar, we spoke about green hydrogen. What is your view on this? Natural hydrogen? Is this another game changer that can bring the industry forward and help transition to a better energy system?
[Cornelius]: Yeah, it’s an interesting question. So since the Economist article and Bill Gates invested in our Partner Breakthrough Energy, in white hydrogen last year. We observe a major pickup and with our CTO team, we’ve looked at this in quite a significant manner. Also to mention, by the way, we are firmly convinced that we could almost abandon colors for hydrogen. All colors are good. Even fossil for now, obviously, they would need to pay a price for CO2 blue. All colors are fine. For now, we need to focus in, first of all, creating a hydrogen economy, an ecosystem. So in this sense we should really leave this ideological discussion behind us. It’s just about the CO2 or emission content better because there’s CO2, but there’s also many other harmful emissions like methane leakage, which need to be accounted for. White hydrogen in the sense obviously is completely natural, and can be extracted directly similar to gas from the ground. It needs to prove obviously that from an industrial point of view, technical point of view, this is feasible. And obviously the price, it needs to be green. There’s many question marks, but I find it quite fascinating to understand and to learn on this new topic of white hydrogen. And it is for sure of increasing interest. And I definitely think that this might play a key role as well.
[Bjorn]: Okay. Yeah, so this is basically early days but Hugh seemed to be on it already and we will monitor the situation closely.
Initiatives
[Bjorn]: You mentioned also I think in a side note, this a ZETA initiative that you are also part of its zero Emission Trader Alliance, if I understand it correctly. And it also has a role in building a hydrogen economy. Can you please explain this?
[Cornelius]: Let me maybe give you a bit more background on this as well. ZETA is a visionary initiative spearheaded by our president, Paul van Son. 25 years ago, Paul had the vision to
found EFET, European Federation of Energy Traders, which is still globally the most influential organization. And at the time, that was just before European electricity and gas markets were liberalized. The idea was to create a contractual standard which it has done and still called today the effort contract and Paul had the idea to create a like-minded group of the organizations with the trading background to create ingredients for market creation. Because as of today, there is no market for hydrogen. There’s almost no market for ammonia. It’s a small traded market which is not really transparent and ideas to create the conditions to create also the first contractual standard and then step by step come to a situation in which you have a trader market for the physical product of all kinds of low emission molecules. But more than that if you look at green electricity is the fact that you can trade virtually via green certificates, which are typically guarantees of origin or IREX. The fact that you can trade virtually and source virtually even. Companies like Liechpich have been in retail for more than a decade. You were able to buy green electricity a hundred percent. Statistically this had a huge impact. The fact that the major buyers of electricity data centers, the big consumers like Google, Facebook, and so on they can source also via green certificates major amounts. We are speaking about how the hours of electricity have been a huge enabler for green electricity, for renewable energy, and exactly that will be a similar kind of enabler. The fact that you, not only we create together with a data marketplace for the physical product of a low emission molecule, but also the virtual trade. And this is basically what we intend to do with ZETA.
[Bjorn]: Okay, so in the long term we will see more or less a stock price for green energy, be it green ammonia, green hydrogen or other clean energy products. And you really try to now build it from the ground up, starting with a contractual standard people can rely on, then putting the people together who build the market, and then you try to scale it up.
[Cornelius]: Exactly. So let’s say our approach is more to create the conditions, to open the doors, regulatory wise. Not too much the physical marketplace, but in our partner group, we have companies like Bureau Veritas or Tuv Sud , that also certify the entire chain. And this of course will realistically take through the next decade, the thirties, step by step, a marketplace will be created both physically and virtually. I don’t have any doubt that long term, the global mark for hydrogen and low emission molecules will be bigger than oil and gas combined today. Absolutely. No doubt about that.
[Bjorn]: Yeah. I also believe in this vision because it’s a much more tempting product. And if you can bring value at this big scale, energy is the biggest business you can do. And if we can pull this off I think it will be really big, but it will take some time.
Kasper cryptocurrency
[Bjorn]: What fascinates me about all the initiatives that you together with Paul. Those are things that will never materialize in two years. So you always have the vision that it will come in 10 or 20 years and you are so confident, and if you continue working on it, it will come. And another thing that you are already thinking about is this Casper which I think is somehow a digital currency, which has additional benefits because you can also transport information which would be important for this tradable market. Sita you were talking about. Can you explain what Casper is?
[Cornelius]: Yeah, exactly. The fact that you certify, but also more importantly, trace from source to sink. Low emission molecules, electrons, that are obviously key to create the trust, which is really the prerequisite to create a functioning market. And in this sense, Kasper is a new cryptocurrency, which is many times faster, many times more efficient. And Bitcoin has obviously a much lower emission footprint. And interestingly, Paul, you will not believe it. Our president was almost 70 years old was a visionary to invest early in Bitcoin and these kind of things and saw this coming. And now we believe that very clearly Casper, as a new cryptocurrency. This is why we look at creating KII as well as Kasper industrial initiative. It will play a very important role here. And this is basically part of our pyramid where you have all the things from a technology market equation traceability. And this is all interlinked and in the sense I’m actually really always excited to learn more about these kind of topics because we are already heavily involved in them.
[Bjorn]: Yeah, it’s fascinating because you have this basically desert industrial initiative. You have the Green Industrial Initiative, you have the ZETA Industrial Initiative, and you now even go on the Currency Industrial Initiative. So you’re building the house ground up with a very solid basement from your prior work, and now you are building it up. But this sounds a little bit like a moonshot to me, while I still am confident that it will be coming. But what are the biggest challenges? Because you are basically working on the problems and solving it, but when do you think, will we really have a tradable green hydrogen commodity based on a digital market with a digital currency?
[Cornelius]: Yeah I think a triple market will come in phases realistically throughout the thirties. So that’s the only thing for the twenties, step by step. And obviously on cryptocurrencies, this is an extremely dynamic field. Things can move extremely fast depending on regulatory things, but I think it’s clear as a matter of fact that cryptocurrencies are becoming an asset class, an established asset class where you can diversify a small part of the overall assets too, and this market creation obviously will have regional dynamics as well. It won’t be a global movement from the south. We obviously have global endeavors with ZETA, not regional endeavors. I think this is very important to be said, but this depends on so many factors as well. And of course, we will have quite prolonged periods in which we have bilateral offtake agreements with a lot of transparency still. But obviously our aim is to push for a transparent, functioning market as much as possible. And technology makes it possible. When you yeah, can trace from source to sink you certify and all of these things they can, I think, make us quite confident.
[Bjorn]: Yeah, this is fascinating for me as well. I also believe that there will be positive change coming through technology also in that sense.
Year 2030 Outlook
[Bjorn]: Now coming to a little bit to an outlook. You are a visionary guy, but let’s put yourself in the year 2030 because this is something like five years from now. What do you want to have achieved by that time to look back and say, okay, I did it, Cornelius, I’m proud about myself.
[Cornelius]: Oh, that’s a good question. First of all we live in an era of probably the most nasty geopolitical development most recently. I personally wish that this gets better than worse. So that is a wish we cannot influence much, but this is a very important side condition. I think there are a few interesting trends here. Obviously it was probably a significant deprivation of the dollar. Which is coming out of the bull market. It started in 2008 when the dollar was at 1.60. So I would comfortably say that a price target for the dollar is probably 1.40, 1.50 for the next two to three years, if not lower. And so there is a few real market things we predicted a significant rise in interest rates. By the way, nobody believed this. I always said times will be over for zero interest rate. And it came with a bang, 300 basis points in just one year. So that’s made a little bit about the overall conditions, I think for energy transformation, solar, wind, hydrogen, everything, batteries. There is such powerful trends in which we already have tipping points. We have a combination of market shares of developments, of capacities that we clearly accelerate this entry into a exponential growth phase where we already entering this uncharted territory. So in this sense, I’m very confident that the development for really a quintupling of renewables here in the region. It is very realistic. In fact, it’s conservative, will happen. And this is obviously a thing where we will look back and hopefully we will have been again, part of this development. Like we were, in the phase here, a driving force since we started with Desertec, and then secondly on infrastructure. There must be more developments. South Korea is just one example. Elmet, the sub cable between Tunisian and Italy is being built as we speak. Then other infrastructure. Between the region and Europe and these partnerships. We are connecting people. We are more than a platform and often our slogan has been also connecting people, connecting continents that can make wonders. And in this sense bringing together the right organizations, pushing at the very highest level of top private sector players, politics and so on and so forth. And having a very good channel to the German ministry, was, here being promoted now to New Minister of Economic Affairs and energy, she’s been a long-term advisory board member. We’ve been working very closely over the past years. This is wonderful news for Germany. With such people, we have excellent relationships on trust basis. We can, I think, make this happen. And looking back to having created these partnerships to have kickstarted the originating discussions that, for example Neom Green Hydrogen, led to such projects. If we can make it again, that would make me personally extremely proud. And of course not to forget about, with our group of people, we also want to have fun. We want to create memorable moments because I always say, if you don’t like your job, then change the job. So we want to also, with people that became almost friends, create unique moments. And we want to look back. These were the occasions where really a few things where we seriously changed the world started to happen.
[Bjorn]: Okay, what shall I say, Cornelius? So this has created a special moment for me and I also think that we will create a special moment for our listeners because I think what I have learned from you, dear Cornelius, is that you started basically as a professional which is very disciplined and focused in Germany, and you rise through ranks and now you are not so focused anymore on your career, but more connecting the right people. And by doing so this is my impression, you become impactful on your own and the more impactful people you connect with the right mindset, the bigger the impact we have and the faster the energy transition will come. This is my short summary of what I get out of this call. And I am very honored that I have you here. It’s giving me goosebumps. Thank you very much for taking the time and sharing your vision. I wish you all the best with all the initiatives and the passion that you have, and I hope that we can connect and see that these things materialize. So many thanks dear Cornelius, for sharing all this. And I hope that, and I’m confident that this podcast will inspire many people to continue believing in the energy transition that we are all driven to achieve.
[Cornelius]: Yeah. Thank you very much also for the wonderful summary, Bjorn. Really appreciate it. And if I can indeed inspire a few more people, that would make me personally very happy, thank you so much.