In Love with Challenges: Interview with Ditlev Engel CEO of Energy Systems at DNV

In Love with Challenges: Interview with Ditlev Engel CEO of Energy Systems at DNV

DNV is the global independent expert in risk management and quality assurance . Its main purpose is to safeguard life, property and the environment. EOG has the chance to conduct a very interesting interview with one of the men that makes this possible; Ditlev Engel, CEO of DNV’s Energy Systems business unit, who shared with us his thoughts regarding the company’s operations in Egypt, its latest services and hydrogen projects developments, and also revealed a passion for challenges.

DNV has been operating in Egypt for many years now. What makes Egypt an attractive market for the company?

First, let me explain very briefly who DNV is for those who are not familiar with us as an organization. DNV means “the Norwegian truth” and was founded back in 1864 so we have a bit of history. We originated in the maritime industry and we are still headquartered in Oslo, Norway. We work globally and we are 12,000 people working in different business areas. I head the Energy System business area with 4,000 people, but people also know us very well from the maritime business, business assurance, supply chain management, and digital solutions.

So we work in five different areas and I think this is important to be aware of  why Egypt is an important place for us to be. We are a global organization; we are active in more than 100 countries so we work with a lot of individual countries but also with a lot of global clients and many of them are working in Egypt. So, we look at it not only to be a good business partner for each country we work in but also for supporting our global clients. This is exactly why we came back to Egypt many years ago and have been involved in the oil and gas business since 2002.

What are the company’s operations updates in Egypt?

Within Energy Systems, we cover the oil and gas sector and the power, renewables, and transmission sectors. So for us, Egypt is very important and interesting for both of these businesses. So far, we have been more active in the oil and gas sector. We have seen many things have happened over the years, and many things will happen going forward in particular on the natural gas side and how we can support that.

But we also see an interest in renewables and also very much working with Egypt on the transmission distribution of the electrifying of societies; a trend that we see happening in many places and the need for electrifying many industries. Therefore the option of electrifying industries and countries is also a very big topic. So, there are many good reasons to be focusing on working together with Egypt for some of these businesses.

How did the company customize its operations due to the pandemic?

As a company, we are very mindful that we take good care of both our customers and our colleagues. Actually, the purpose of the company is to safeguard life, property and the environment. This is a very important part of our DNA and how we set our business priorities. So when the pandemic hit us, we were very mindful of how we make sure that our 12,000 people are safe and how, at the same time, make sure that our customers are safe and still do our jobs.

So, we have people in Egypt doing surveys with customers on the ground, then going into remote surveys. Just last year, we did more than 4,000 remote surveys in the sector which is four times more than in 2019. So, the pandemic taught us very fast, like in many other businesses, that you need to tune into new business models and you need to do business in a different way.

You have to get your hands around it and get to know it, but once we get into the swing of it; I am wondering whether we will stay on the remote survey route when the pandemic is over or whether we will go back to the good old ways or maybe some hybrid approach. I think we will look very carefully at how to make sure that our customers can keep operating and we can keep giving the same services, but in a new way.

Earlier this year, DNV made the decision to combine its current oil and gas, and power and renewable businesses into one new business area called Energy Systems. What was the purpose behind such a step? And did the pandemic have a hand in making that decision?

Some years ago, we started to forecast how we think the energy business will evolve and we call that our “Energy Transition Outlook”. What is very interesting about this outlook, and I recommend anybody to download it from DNV website for free, is that we actually try to take a look at is not only the cost of technology today but what is the expected cost of future technologies.

What you can see is that systems are integrating so much more. We come from a world where it has been mostly standalone; we have had gas, wind, solar, etc. In the future world, also enabled by digitalization, everything is integrating much more. People are looking for full-system solutions, for solutions that can help them decarbonize faster.

You cannot solve that by thinking about one technology, you need to think about how we can combine it, for example; could we produce green hydrogen? If we are going to do so, what kind of competence does that need? So, we could really see that our oil and gas customers and our power and renewable customers were coming together and the systems were coming more together. Therefore, it made sense to us to try to create a one-stop-shop because everybody needs to transition faster and at the same time, everybody needs to be very mindful of how fast they can decarbonize their operations, which I know that many of the big companies operating in Egypt are looking into.

So, it became a natural move to take the energy industry to the next level and therefore made sense that we combined our resources. We are 4,000 people in Energy Systems supporting our customers globally on this and I have to say on the technology front that there are so many things happening, it is extraordinary. I have been in the energy sector for many years and I have never seen the amount of attention and capital coming into the sector and the wish to try new things such as; carbon capture storage (CCS), decarbonizing the gas sector, etc.

We need to be frank to deliver on the Paris Agreement and we need all the tools in the toolbox. It is not just one silver bullet and we will fix this. We need to focus on all of it and the challenge is that we need to do it at the same time. So, we are seeing that the energy transition is becoming a matter not just for the energy sector but nearly for all businesses.

Several oil and gas companies have announced their intention for the energy transition. How can DNV assist in that journey?

Everybody is focusing on the energy transition; let’s remember that basically all countries have signed the Paris Agreement. This means that we have all pledged that we are all going there, but we all know that we are behind. So, just to put it into perspective, in order for all of us to fulfill the Paris Agreement across the globe, all of us need to reduce our carbon dioxide (CO2) emissions by 8% every year.

Due to the pandemic, we managed to get down carbon reduction down by about 6% when [we]basically stopped flying, or going to the offices, etc. I am sure everyone is very eager when the pandemic is over to go back to business as usual. This means we have stopped flying once and we cannot do that again, so we need technology to find a new way to decarbonize faster. This is exactly the reason for creating Energy Systems.

All of the major players are looking into this and making pledges to do so. So, the question for DNV is how can we scale technology faster to get there? How can we decarbonize, for instance, the gas sector? I very often get the question; why are we not we all going to renewables tomorrow? But that is just not possible.

For instance, we are predicting that gas is going to be a major part of the energy transition in the years to come and obviously, we need to think about how we can try to decarbonize the gas because we cannot just switch everything to renewables tomorrow. So, we need to look at how to do that and look at how to use CCS, for instance, as one of the possibilities that we need to deploy. All these things have to happen at the same time, so we really have many things to focus on.

What role does hydrogen currently play as far as decarbonizing our energy?

I would have to say hydrogen has in last maybe one and a half or two years have come on the agenda in an unprecedented way and hydrogen is we think going to be a very important part of the energy transition. However, we are still in the early days of hydrogen and how we can use it and whether it is blue or green that we need to focus on. I think first we need to look at how to prove the safety case for hydrogen which is going to be very important. Safeguarding life, property and environment means we need to make sure of technologies we deploy are really safe and that would be the first step that we would have to be mindful for hydrogen.

We also need to have a look at how we can develop an efficient hydrogen infrastructure. One of the questions for instance is what are the current infrastructures that we have from the oil and gas sector that could be used in a smart way going forward in a hydrogen transition and what are the possibilities for doing that.

We must look at how can we scale carbon capture and storage (CCS) when belonging to hydrogen, how can we use that and deploy that in the right way. And I, also, have to say that we need to look at policy and the role that policy plays for whatever of the energy sectors we look at. There is no doubt that in this view, hydrogen is going to be very important.

I would say that one of the challenges we have as well is how to store the electricity when we generate much more, because when we look at our expectations, we see that both wind and solar are going to have a massive uptake in the years to come. All the electricity when it is being produced is not going to be consumed at the same time. So, how we are going to store it and this is where, for instance, hydrogen can become very interesting for the production of green hydrogen and also, we need to be fair in saying that, in the energy world and in the industry world, there are the hard-to-abate and easy-to-abate sectors.

Sectors like airlines, shipping, some of the very heavy industry and manufacturers, will require that we come up with new type of fuel. Again, hydrogen can become very interesting to be used for those sectors. I think hydrogen has a lot of potential, but also we need to be mindful that we need to go through many things in order to unfold that potential and there for again, the faster we can do that, the faster we start to deploy on a big scale.These are some things that we are really working very hard on in DNV and its definitely relevant for quite a few countries.

How can DNV stay true to its sustainability goals while working with the oil and gas industry?

We need to be realistic in safeguarding life, and property and the environment. For us it would mean we need to look at not where people are coming from but where they want to go. So, as you mentioned before, many of the major oil and gas players are really looking at how to decarbonize their footprint and we see our role is helping them to do this as fast as possible. Wee can because this is the only way we are going to get to  the Paris [Climate Agreement] objectives.

So, therefore, I think this cause very well hand in hand as long as we find the right way of doing that. So, there are clear plans for how we should decarbonize the various sectors, and this is really how we see it too and how we can support that journey for both countries and companies.

As probably many people would know that when we get through COP26 in November in Glasgow; this is where countries must come with NDC’s – Nationally Determined Contributions of how each country is going to address this. This of course means that both public and private partnerships are going to be absolutely crucial for finding a way to make that happen and this would definitely involve the oil and gas sector of how oil and gas success is going to work in proactively operating  to bring down their footprint and here we really see we can contribute a lot.

So for us, as I said it’s the questions of where the people really want to go and how we can help them not to go too, but we need to  run there because this is really what we need to see happening .

How can Egypt scale up its green investments?

We work with a lot of investors in our advisory practice and I have to say that many investors are really looking for new good projects and sustainable business models, so we are seeing here, the capital chasing projects. My recommendation is to make an attractive investment environment, these are long term investments. So, we have, for instance, the uptake of green power projects agreements (PPA’s) where people know exactly what are the rules of the game for the next 20 years.

So, if you for instance would say in Egypt some long term PPAs and some reckonable projects, I am absolutely certain that you find many companies would find it interesting to invest as we have a very good wind and solar resources in Egypt. I would say that the capital available for investing into the transition is there.

The question is to make sure that people can see the framework and the long-term visibility of what they are investing into and for instance issuing green bonds, raising the capital, could be something which I am sure that many people would be very interested to engage. So, I think that the roadmap is there and of course if we can help in any way to come up with good ideas and suggestions, just give them the call to contribute.

As DNV is moving to low carbon Energy Business, do we expect same involvement for developing new demanding competencies either on technology itself or managing hazardous associated new technologies which could be green from environment point of view not from safety consequences point of view?

Coming back to what I said before, safeguarding life, property and the environment will drive this. I am not exactly sure what the last question means about non-safe green, but let’s say, safety always comes first for us in anything we do, whatever sector we are in [and] that always would be prevailing.

Having said that we are working with a lot of different technologies. We have, as a company, to spend 5% of the revenues under research and development demanded by the board of directors [in any situation]. This is the only way that we [DNV] can stand at the forefront of the technology which is obviously key trial for developing our competencies. We are very committed to the sector [and] to develop our businesses in Egypt.

In your opinion, how can Egypt’s oil and gas sector embed digitalization in its operations?

For us, decarbonization and digitalization are facts of life going forward and it would be so also for Egypt. Sometimes, I wonder why anyone would stay analogue, I hardly doubt that many are going to do that as everything moves into digitalization and so within the industry. We have been working together with Egyptian General Petroleum Corporation (EGPC) for instance with our Synergi life software which is very much related to the quality and safety in the environment as an example of how this has been used.

The whole aspect of digitalization is a great opportunity. We have a whole unit of eight hundred people only working on licensing our offerings and services so they can be integrated and scaled going forward. It doesn’t really matter which part of the value chain that we are looking into its how to make it digital as well. Also, many processes can be done much faster if we move to a digital approach. Finally, inside companies and procedures, we are helping them so they can move faster thanks to using technology. So, we see digitalization is coming in so many aspects of our businesses.

In addition to providing digital solutions, what other services does DNV provide to the energy sector?

We are using many things; we use sensors for monitoring. For example, we have a company that monitors the installation and storage of solar and wind [which] is integrated into one system [helping] in monitoring and optimizing the performance of the assets. Furthermore, we are looking into how we can use digital twins in the approach.

The last thing, I would have to say that we are offering veracity. [This] is DNV’s secure data platform [that] we are using in combining many services from different companies that are using this platform to really handle a big amount of data. We must remember that the energy industry has a lot of generated data that must be handled in a secure way. We are approaching it from many different angles, and we are only seeing that this keeps expanding and I am sure that it would continue.

From your perspective, what changes will the energy industry witness in the years to come?

I think we will see massive changes and it will continue. It is just starting to unfold because we are really under pressure to decarbonize very fast. This will drive innovation even faster. There are many discussions around how fast it would change. This is of course also very much up to the regulation. I would have to say from the technology perspective, we are very optimistic.

We see that technologies can do amazing things and will continue to do. It is much more a question of whether the companies and governments are ready to take this on board. Fortunately, we see that the appetite for doing so keeps going up and that gives us a lot of hope in how we can further scale many of these things that going forward.

And when it comes to the technology impact on energy transition, if you look at how much you can store and scale fast, then that is much more a question of how fast you want to scale. Probably, one of the big challenges is really to find out what we are going to do with some of the investments we had made that we may not need because the other technologies are moving so fast.

We see some kind of correlation between stranded assets and new deployment of technologies that need to find the right balance when you face out the existing staff with new staff. Probably, this is where many find more challenges the less evaluation of investments that they have made, but they actually find they are not going to use for a long time as they initially expected.

What was the biggest challenge you faced in the past year on a professional level?

The first priority that we had was how to make sure that we keep our employees safe during the pandemic. So, basically, all of us in DNV have been working from home for a year. I think we have been fortunate that our colleagues and customer services (CS) within the pandemic [are] well.

We have been very fortunate as an organization. We had a very good performance of our technology infrastructure [and] we really have been able to operate at full speed. When you are getting into a very challenging situation, you find out how robust you are as a company. We can say that having gone through 2020 that DNV and our customers within these challenges are well.

What are DNV’s goals for 2021?

So, for this year, we are combining our two new business areas so we can first and foremost service our customers well. We like to think of ourselves as a very customer-centric organization, so making sure that our customers and colleagues are doing well is of our priorities as if those two ended well, financial performance seems to follow. So these are the most important Key Performance Indicators (KPIs) in 2021 as it was in previous years and coming years.

In the same time, as an organization, we like to contribute whenever we can to accelerate the energy transition and decarbonization of their overall performance. Again, we put safety first and support companies in the safety aspects which for us are absolutely crucial in Egypt or anywhere else.

As a global organization, we put our experts wherever they are needed, therefore I will say if someone in Egypt or any other place is  thinking, “I wonder if DNV can handle that challenge here in Egypt?”. The only thing I will say is; please, test us. We love challenges, even crazy ones; this is also where we learn . This is how we make innovation and progress and this is what we need.


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