Cornelius Matthes is CEO of Dii Desert Energy and the MENA Hydrogen Alliance. He discusses the unfolding clean energy innovation revolution and ways to accelerate change momentum.
Meet the agents of change: Cornelius Matthes
What is the key to effecting genuine change in the renewable energy sector in the Middle East?
The key to change, and the main driver behind powerful development in the sector over the last decade, is the fact that by 2020 the levelised cost of electricity for both solar and wind energy had dropped well below projected 2050 values that were already considered optimistic.
With renewables significantly outcompeting the prices for conventional generation, this has led to a surge in projects in the region, and we are indeed at the start of an exponential growth curve.
Record low prices for solar and wind at a global level also present a huge opportunity to accelerate the energy transformation through the introduction of green hydrogen projects.
If we consider the roster of green hydrogen projects that have been announced in various countries, they have the potential to dwarf the entire energy system. In addition, they stand to revolutionise entire economies, create thousands of jobs, and support energy security and stability.
At the same time, we need to be cognisant of the possibility of fundamental geopolitical changes that will see new winners enter the fray, but also result in some countries losing out.
You have flagged the phasing out of fossil fuel subsidies as a key accelerator in the transition to clean energy. Which hydrocarbon nations do you think will lead the way in this regard and when?
The UAE has led the phase-out of fossil fuel subsidies already in 2015, while being at the forefront of a raft of other energy transformation initiatives, such as the early push into renewables and the announcement of net zero 2050 goals.
Liberalisation of petrol pump prices through the monthly adjusted rate model, which reflects current oil prices and the existing basket of refined products, has been in place for six years already. And when oil prices rose significantly following Russia’s invasion of Ukraine in 2022, the at-pump price was significantly higher than $1 per litre.
Electricity pricing has also settled to a reasonable range at around $0.12/kWh for industrial and commercial consumers in the last few years, creating a level playing field for renewables.
Saudi Arabia and Egypt have followed the UAE’s lead and are starting to implement subsidy phase-out strategies yet other oil and gas-producing countries in the region are lagging behind in terms of action. A failure to phase out fossil fuel subsidies completely undermines any credibility on the way to net zero.
As well as pricing carbon in order to penalise polluters, what else can be done to prompt change across the entire stakeholder ecosystem?
Apart from introducing a CO2 tax for polluters there are many ways to drive change momentum. Quotas for green electrons or molecules in different fields could be an indirect incentive. For example, initiating a two to five per cent quota for fuels or kerosene, which is similar to what we see in some European countries.
Incentives could be introduced to the transportation sector to encourage uptake of all-electric or fuel cell vehicles. These could range from free parking and the waiving of road toll fees to access to other user prioritised services.
Governments could also develop programmes that offer low-cost financing for energy efficiency measures adopted by private sector companies or, for example, for switching to solar rooftop solutions.
Practical initiatives need to be paired with awareness campaigns, which are critical in driving change, especially when there are cultural challenges to address that necessitate comprehensive education and outreach programmes.
Technological advances have led us to what you call the ‘tipping point’ for future exponential growth of the clean energy sector. How is the work of green innovators and thought leaders set to tip the sector into this new phase of opportunity?
A tipping point in the clean energy sense is when factors such as the price and availability of different technologies reach a certain market share threshold.
The current challenges for solar and wind include the vastly increased cost of commodities, a disrupted supply chain, and issues around the concentration of production, such as solar PV panels with China. Innovators can - and will - find ways to overcome these challenges by, for example, replacing certain rare, expensive or problematic materials from a social or environmental perspective.
On the hydrogen side, we are at the beginning of a new technological revolution. The array of ground-breaking solutions to make electrolysers more efficient and reliable or improve the storage or transportation of different forms of low emission molecules, for example, present huge opportunities for entrepreneurial development and innovation.
Which organisations are driving positive change through innovation and commitment?
We are partnered with Fraunhofer, Europe’s leading institute for applied research, which has been at the forefront of change for decades and is where an impressive portfolio of technological innovations supporting energy transition originated.
Fraunhofer has been the launch pad for a number of spin-off companies engaged in emission-free technologies’ development. These include work to optimise solar energy efficiencies through to inventing new ways to improve silicon wafer production in order to reduce raw material usage.
In the MENA region, organisations like Morocco’s L'Institut de Recherche en Énergie Solaire et Énergies Nouvelles (IRESEN), have been instrumental in driving positive change within the green energy-green hydrogen cluster.
At the same time, in the UAE, Masdar and DEWA stand out as innovation leaders, in addition to other regional entities such as the Oman Hydrogen Center, the King Abdullah University of Science and Technology (KAUST) in Saudi Arabia, and Qatar Environment and Energy Research Institute (QEERI).
How will green hydrogen solutions impact the energy mix in the next decade? What are the barriers to adoption and how are you working to overcome them?
It is widely accepted that low emission hydrogen will play a key role for energy transition globally. Applications will vary from country to country, due to a variety of factors.
To begin with, it is critical that the primary usage of hydrogen, which is currently for ammonia production and within refineries, will need to be ‘cleaned up’. This will be contingent on CO2 pricing and quotas.
In the first instance, we will see these solutions positively impact the steel industry with green hydrogen replacing coking coal in the iron ore reduction process. With the steel industry responsible for around seven per cent of global CO2 emissions, this represents a game-changing opportunity.
Mobility solutions providers will also be early adopters with green hydrogen used to fuel trucks, buses and trains as well as fuel cell cars.
The biggest barrier to adoption is somewhat indirect as we are talking about the need for accessible CO2 pricing in order to convince the heaviest polluters to accelerate adoption.
Other major barriers include infrastructure challenges and having the right regulatory schemes in place.
Through your expertise and the work you do at Dii and Desert Energy, what are the most exciting developments underway in your field – or in the pipeline – that you believe will positively disrupt the near future of renewables?
We expect the revolution to be anchored by technological advancement. If you look at the impressive improvements of turnkey solar and wind systems over the last decade, this will continue to gain momentum through improved efficiencies, further notable declines in pricing, etc.
We have also seen improvements in the batteries sub-sector, although a significant leap forward is still to happen.
On the hydrogen side, we are at the starting line when it comes to potential acceleration of the various technological solutions under development. The growth of electrolyser technologies is one example, as is looking at different ways to produce low emission hydrogen. Transport and storage will also require a wealth of innovation to power future adoption.
It is important to also examine the critical role that the democratisation of energy - in particular decentralised and smaller scale projects – plays as part of an increasingly sophisticated system. Diesel generators, for example, are expected to have a ‘Kodak moment’ within the next decade, as their phase out presents a substantial business opportunity.