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In an interesting interview with SolarQuarter Middle East, Cornelius Matthes – CEO, Dii Desert Energy spoke about the company, its presence, and contribution to the Middle East region. He also gave us insights into ‘MENA Hydrogen Alliance’ and the company’s renewable energy mission.
Let’s begin with a glimpse of your company’s presence and offerings?
Dii Desert Energy is an independent, international public-private sector network operating from Dubai. Our group has been pioneering the energy transition in the MENA region and beyond over the past twelve years. Dii GmbH was launched in 2009 as an industry initiative in Germany (formerly ‘Desertec Industrial Initiative’) for accelerating the energy transition in the MENA region. Once the domestic needs have been sufficiently satisfied with emission-free energy, MENA will become a ‘Powerhouse’ of emission-free energy, both green electrons, and molecules, serving the world energy market. This has been established in the market as ‘Desertec 3.0’. Recognizing the huge potential of solar and wind in the deserts areas of the Middle East and North Africa (MENA), Dii Desert Energy aims at transforming the energy systems in MENA in a holistic way, benefitting from the knowledge and expertise from its professional staff and partners, including the top-level Advisory Board. The “Grand Dii team”, now counting more than 15 senior experts, located in the UAE, Italy, France, Germany and Spain, intends to further boost the content work to add some solid contributions to the discussions on how to help the MENA region in becoming a ‘Powerhouse for Emission-Free Technologies’.
Dii Desert Energy is connecting the regional and international industry with authorities and institutions and focuses in particular on practical conditions along the emission-free energy value chains. Dii’s platform of more than 58 companies and organizations from 25 countries is, mobilizing top executives, government decision-makers, R&D institutions and academia supporting Dii’s mission: No Emissions.
What do you think about the solar sector in the Middle East? In your view, what’s needed to strengthen the growth of the solar sector in the Middle East?
We are looking back to an extremely exciting decade. Emission-free technologies in the MENA region have become competitive much quicker than even the greatest optimist would have expected only a few years ago. The cost of solar has come down by almost 90% from the last decade. Solar, wind and batteries, and a combination of all, are currently the cheapest form of energy in history. The question is now not if renewable energy, but how much and at which speed. New market realities can only further accelerate the shift towards emission-free technologies.
2021 brought many unexpected events, laying a sound basis for a massive acceleration of the energy transition: from certain project announcements, at a scale, nobody would have believed that this is possible last year, to bold moves like net-zero 2050 announcements by many MENA countries. With the recent announcement to commit to net-zero by 2050 and as a host of COP28, the UAE once again shows leadership in the energy transition. This is the first gulf state to do so and for a major oil & gas producer, the challenges to reach this objective are of course considerable. The interesting next step to watch is how this translates into a roadmap to execute, particularly for this decade.
It is important to note that solar is not just about utility-scale generation but we must look at other market segments. There is residential, industrial and commercial, and the off-grid sector, i.e. where diesel generators need to be replaced step by step. Developing these new market segments is important to create a certain breadth/stability and can offer very interesting business opportunities. We believe that the right partnerships can make wonders to accelerate the energy transition all along the value chain from renewable generation, grid integration, electrical interconnections, different forms of storage, up to energy efficiency, and flexible demand.
How is your company contributing toward the renewable energy sector and what are your some recent achievements?
The Dii spirit has always been to engage with our network, contribute to high-quality discussions in the frame of the various working groups, engage with policymakers and other public stakeholders at the highest level, and thus create business opportunities. Dii Desert Energy is proud to be part of this journey, with the team has worked tirelessly in advocating the benefits of renewable energy with many different stakeholders in the region, including job creation for the youth, enabling one or the other project. Looking back, it is good to see that “Desert Power 2050” has been well ahead of time, when it was published in 2012.
With the new phase Desertec 3.0, there is for sure more to do. We are now not only talking about green electrons but also green molecules, as a second important pillar, to integrate renewable energy in local markets – and exchange between continents. The approach will be the same: the ability to engage at the highest level with trusted relationships, a crucial element that makes this multi-stakeholder network unique.
Furthermore, we hosted the ‘Dii Partners’ meeting, which gathered 45 people from different countries, traveling to Dubai under difficult circumstances. This motivated the team to organize another in-person partner meeting, followed by the 11th Dii Desert Energy Leadership Summit, with over 200 guests from four continents, in November 2021. Also, elaborating studies and policy papers to guide
stakeholders and the energy community is an important element of our activities, as these studies are published freely to increase know-how transfer and capacity building for a greater impact.
Among our latest achievements, the joint study with Roland Berger ‘The Potential for Green Hydrogen in the GCC Region’ on localization and job creation is still widely quoted. It was published with a joint press release in Arabic and English in co-operation with Masdar. As a recent output of Dii’s working groups and activities, we also presented the reports ‘Battery Storage: Is the Middle East ready yet’ and the ‘A North Africa – Europe Hydrogen Manifesto’. In cooperation with Hydrogen Europe, the African Hydrogen Partnership, the Ukrainian Hydrogen Council, the ‘Green Hydrogen for a European Green Deal, A 2×40 GW Initiative’ highlights the vision 2030, and it was integrated into European Hydrogen Strategy.
In a collaboration between Dii Desert Energy and the regional climate and energy project MENA at the Friedrich Ebert Stiftung, we published the paper ‘The risks and opportunities of green hydrogen production and export from the MENA region to Europe’, which includes a deep dive in Morocco, Jordan, and Oman’s green hydrogen strategies. The book: ‘Emission Free Energy from the Deserts’, written by Paul van Son & Thomas Isenburg has been translated into English, German and French, is among the achievements of which we are most proud.
Your company is focusing on the development of the Hydrogen economy, can you please tell our readers about it and what is the ‘MENA Hydrogen Alliance’?
In early 2020, Dii launched the MENA Hydrogen Alliance, which brings together private and public sector actors as well as science and academia to kick-start green hydrogen economies. The Alliance provides a platform for members to meet and discuss pathways forward and formulates common studies. The alliance acts as an impartial advisor to promote pilot projects in the region, elaborates (potential) business cases and structure for large projects, propose the necessary policy and regulatory frameworks, and educates different stakeholders on all relevant aspects of the hydrogen value chain, from ‘source to sink’, including export of virtual and physical green energy. Founding partners of the Alliance are, among others, ACWA Power, NEOM, Masen, IRESEN, the Ministry of Energy, Mines and Energy Transition of Morocco, The UAE Energy Ministry, the EU-GCC Clean Energy Technology Network – which is funded by the European Commission – Hydrogen Europe, Global Alliance Powerfuels, the German Energy Agency, GIZ, and Clean Energy Business Club.
In addition to producing policy papers and organizing arenas for focused discussions, our Chief Technology Officer, Fadi Maalouf, elaborated the Levelized Cost of Green Hydrogen (LCoH) and Levelized Cost of Green Ammonia (LCoA) Financial model which helps market players to capture all life cycle costs and assess project feasibility. It has been widely adopted as best in class model.
What are your company’s plans to take the renewable energy mission forward in the region and what is the biggest challenge that you see going forward?
2020 has seen a tectonic shift in financial markets and according to the Financial Times by today more than half of global assets are managed according to stringent ESG criteria. In this context, CO2 and all kinds of other harmful emissions are fast becoming a major liability. This can also be seen from the significant increase in CO2 prices, which is pricing entire industries out of the market. We hope that other Gulf countries will follow UAE, Saudi Arabia, and Bahrain in this important trend and also commit to net zero. This will be crucial to diversify the economies, create many jobs, and make the region a global powerhouse for green electrons and green molecules. All really exciting news with hopefully more to come soon, including a clear roadmap for this decade.
Overall, this decade is looking to be disruptive for the energy industry, but in a certain sense, we talk about a positive disruptive atmosphere, in which climate change has been recognized, and is attracting unprecedented interest from the financial community and
commitment from governments to create an enabling environment with clear policy and strong and transparent legal framework for clean energy projects. We look forward to what looks like a tremendously exciting decade to accelerate the energy transition globally. We are absolutely ready for the next decade, continuing to connect people and continents, making also Desertec 3.0 become reality. Like Dii has pioneered green electrons in the MENA region for more than 12 years, it is a privilege to have been active in green molecules for over 5 years and see this movement now happening faster than ever.