Ørsted’s Andy Brown: "We should think in centuries.”

It's going to be essential that we create a sustainable energy system and everyone thinks in decades and, you know, I think we should think in centuries about what this looks like. We will ultimately have to retool the energy system of the world. We have the ingredients, we have renewable energy in abundance that can power the world. Welcome to another episode of The Gorsa Neustadt with Zbilla Baden. thoughtful conversations with pioneers across the world who turn their vision into reality and transform their industries, their companies and their institutions to help rebuild a greener, fairer and more resilient world. My guest today is Andy Brown, President of the Energy Institute and Vice Chairman of Oersted, one of the world's leading forces in offshore wind and a defining example of green transformation. At the Energy Institute, he oversees the statistical review of world energy, the benchmark that shows with unmatched clarity how the world is progressing toward net zero. At Ørsted, he helps guide a company that transformed from one of Europe's most fossil fuel-intensive utilities into a global renewable pioneer. Before Ørsted, Andy spent 35 years at Shell, leading major global operations and later serving as CEO of Gulp. Across these worlds, he became known for three things, transforming organizations, driving world-class safety, and developing talent, including Shell's current CEO. And behind this global career is a human story and a guiding question at the heart of his work? How do we power modern society in the future? This is the conversation we enter today. Good morning, Andy. Good morning, Sylvain. Let's begin at the macro level. What story does the latest statistical review tell us about the state of the global energy system? Well, what it says is that we have a thirst for energy. The global energy demand went up almost 2%, but every source of energy went up. That's happened since 2006. So we haven't tackled efficiency improvements. We are seeing fossil fuel growth. And as a result, we see CO2 growth, almost a percent increase in CO2 emissions. But there are underlying stories in the data set. Firstly, I think what we can say is the key is to decarbonize electricity, electrify all you can, and then tackle the hard to abate sector. And I think the good news is that renewables grew by 16%. That's nine times faster actually than energy growth. In Europe, nuclear, hydro and wind are now the three largest sources of electricity. Gas comes forth. And secondly, the electrification is really starting to happen. 4.2% increase in electrification. I'm concerned that air conditioners and data centers are not so much on EVs and heat pumps, but it's the right trend. And the last thing is China. China's electricity grew 6.4%. That's the equivalent of the whole Germany's electricity system growth in one year. 57% of the renewables installed in the world were in China. And about two thirds of all the EV sales. And of that electricity growth, only 10% was coal. So almost all of that growth was met by low carbon electricity. So I think those are for me the key themes. We haven't made a transition yet. We're in addition, but there are some really strong signs of an acceleration of renewables and electrification and particularly the role of China that I think is quite exciting. There were so many numbers now and so many things you said. Can we start with, you said very early on, decarbonize electricity. Yes. Why is that of such importance? Well, I think if you are going to imagine a zero carbon world, it's a world that is very electrified. And so in order to get to a zero carbon world, we need electricity, but we need green electricity. We need electricity that is generated by renewable sources. So that's why decarbonizing electricity is so important. Electricity is only 20% of final energy use today. So if we decarbonize all electricity that we have today, it only gets us so far. We've then got to electrify everything. And you also mentioned briefly AI and quantum technologies, that they take up a lot of electricity, and China. Yeah. So can I just briefly say China is certainly a place with one billion people and we keep on comparing it to tiny places like Germany. Isn't that a little unfair? Well, it is a bit unfair. They have the scale. But I'll just give you another comparator. The electricity generation in China is the equivalent of America and Europe put together, but their GDP is not nearly as much as Europe and America put together. So in a GDP context, forget people, GDP context, it extraordinarily electrified versus America and Europe. So China itself is the highest CO2 emitter. China is burning more coal than the rest of the world put together. So China in itself is the problem, but it also could be the solution if these rates of change continue. So, you know, I see China not only as the place where predominantly green energy is being manufactured, you know, in terms of solar panels, in terms of winter, batteries. Trees, they are by far and away the largest producer, but also 80% of the rare earths are processed in China. And so they're such an important exporter to the world. But I think what's kind of interesting, they're now actually really picking up on the deployment. They've gone a long, long way to go. They have a lot of issues to tackle. But for me, that transition, because the developed world transition a decade ago started to reduce its CO2 footprint. China is just on the verge now of peaking and then starting to decline its CO2 emissions. That is really big news as far as I'm concerned. Coming back to the global energy trends, where do you see real progress? Yeah, I mean, as I say, I see real progress. solar is the standout kind of star of the show. I think 28% increase in solar generation between 23 and 24. So solar power rather than wind now is really picking up pace. And that is very exciting. And there's a lot of distributed solar, even in the developing world, now being deployed. So I see solar clearly as the one source of renewable energy that is that will take over from wind and will be the largest source of renewable energy. So for me, that's kind of really exciting. If we look at the influence and the growth of AI and quantum technology, how do we power modern society now and in the future? Yeah, a lot. There's been a lot of talk about data centers. The statistics on data centers, I mean, it's important because this emerged almost from nowhere. And by 2035, it could be 10% of the US electricity demand. But it's quite a US-European specific story. So in terms of globally, it will be 3% or 4% or something of global electricity in 2035. So it's important, but not game changing. Actually, the growth of air conditioners could well be taking more electricity from the system than data centers. So data centers are a new issue that need to be tackled. that concentrated demand for electricity that requires major investments. There's as much being spent on data centers today as the whole oil and gas industry. So that's quite an interesting kind of thought. But data centers are important and knowledge and information handling is energy intensive. And we just need to acknowledge that. But it'll have to be clean energy. If we grow fossil fuels to satisfy that demand, that's a problem. You gave a very interesting example. You said air conditioning will perhaps use up more energies and data centers in the future. So just looking at you and me, you said you are in Portugal right now. I'm in France. We both use air conditioning, I assume, in summer. We have to. So what does it mean for the citizens, for the individual? Yeah, look, so one of the consequences of global warming is that, and obviously as people get wealthier, is that people will look to install air conditioners in their house. I mean, I think some of the projections that IEA in Indonesia, I think 15% of the houses have air conditioners today. They think by 2035, it will be 50%. And so that's a massive increase in electricity demand in order to cool people. So the whole issue of very hot cities, of fatalities due to excessive heat becomes a bigger and bigger problem. And the one solution, unfortunately, is to put a machine on it, which is an air conditioner. And I think that is, well, it's a reflection of people getting wealthier, but it's also a reflection of the world getting warmer. And I think that's a concern. It's definitely a concern. Talking about concerns, Where do you see the political and economic headwinds? Not only just at the moment, but altogether. I mean, obviously, as I said, there's some unstoppable trends we see in Renewable Metricity. But I'm concerned is, obviously, there are two things that happened. There's been a political wavering, particularly led, obviously, by the US. but there's also been a change in the investment market, in the capital markets. So in the capital markets, companies are being less held to account for their energy transition plans than they were in 2021. So Shell and BP have all kind of almost abandoned their renewable portfolio. And that's not because the leaders are just not thinking forward enough. It's because the capital market's telling them, I just want returns. Go back to what you're good at. Whereas in 2021, they're saying, I'm not going to invest in you unless you transition. So that capital market has had a big impact. The political, and particularly the rise of the right-wing policies that says, either it's a hoax or it's not your problem, it's China's problem, I'll look after your way of life, is quite concerning. And whereas I think US, because it's quite a progressive kind of economic culture will transition. It's countries that look to the US leadership that may say, US isn't doing it, we don't need to do it. And I think that for me is the concern. So is it a bit of a chain reaction? Yeah, I mean, no, I think it is unfortunately something. And for me, and we can talk about generation of electricity and the cheapest way to generate electricity is renewable. So I think most people kind of agree with that. But my concern is actually to do this transition, we need to go through a major infrastructure change. And that infrastructure change requires one-off significant costs, including the grid investment. Grid investments should be almost as high as generation investments, and they're nowhere near at the moment. Otherwise, you just won't be able to dispatch the renewables. But secondly, we have a whole infrastructure, whether it's EV charging, steel manufacture, cement manufacture, shipping, aviation. All of these industrial sectors will have to transition. And their transition will require extensive rebuilding of infrastructure, which will cost the world, I mean, the estimates are, let's say, four to five trillion a year. instead of today on green energy, we spend two trillion a year. And that's politically expedient to say that's not our problem. We've delayed that. We're not going to do all this because it's too expensive and we have a cost of living crisis. So that for me is the big concern. And how can you get through this one-off infrastructure transition change and still keep that political will to transition the economy to a new energy system? From where I'm sitting, I think it's very much up to political will and rules and regulations and law. So my question would be, which stakeholders have not made the journey here? Well, I think so. We are in a global economic system. And in a global economic system, for your economies to thrive, they need to be competitive. So if you're competing against China and America and Europe, and you still need to have competitive industries in order to compete in the global world, you have to make sure that you manage those costs. And so it can be political will, but it's how do you do this and stay competitive? Because you can have all the political will and say, we're going to spend all this money on our economy. But if it doesn remain globally competitive then that going to be a problem So it how you manage that transition pace in order not to become uncompetitive And it not about the core cost of renewables It about the transition infrastructure cost. And I do see a lot of politicians today are getting concerned about that issue. And so whether it's political will or it's just the reality of staying globally competitive that I think is really bothering them. Yeah. However, you are the vice chairman of a company who actually shows the world how to do better. Yes. I'm not saying they shouldn't. I'm just saying this is the dilemma they face. Yeah. And we need to talk now about Örsted, the company where you are wise chair and you came in as a CEO briefly. So Örsted, for our listeners, is often held up as a textbook case, actually, from one of Europe's most coal-intensive utilities to a company where 99% of energy generation is from renewables and emissions are down about 98% versus the old baseline. So what do you do better? I think so. Allstead was a real pioneer. So in 2008, they decided to move to renewables. In 2017, they made the big step of selling their oil and gas production and changed their name to Allstead from Dong. And what they did really, really well is that they were able to lead the offshore wind industry. So offshore wind costs came down three quarters from 2013 and 2023. So they kind of caught this declining costs. The projects that they bid, the projects they built got cheaper. So when they delivered them, they were delivering a better return. Interest rates were low. They leveraged up their position. They borrowed and they sold down part of their asset to investors and pension funds and they got really good returns so they had a business model which was on declining costs was on low interest rates that really really was very effective it was quite extraordinary what they achieved and you know at one point they were market cap in the end of 2020 was higher than bp so you know they really kind of demonstrated what you can achieve economic conditions were very strong for them yeah so but they were also extraordinarily capable in what they did and they got a lot of support from from the danish government and so i you know it has been an amazing story um now the world changed a bit since 2023 we'll perhaps talk about that in a minute so so it was about you know catching that wave at the right moment and and really doubling down on it and everyone all the oil companies tried to follow them because they saw this and they just none of them were able to to match the the performance that that horse has created and you know today you know an offshore wind project in europe is more or less the same cost to build as the wholesale price electricity so it's not subsidized it was subsidized between 2013 and let's say 2020 it was quite heavily subsidized to get the industry moving it's now not subsidized. To a large extent, it's not subsidized. So, you know, I think it's a great story of a company taking the right choice for the environment, but also picking up an investment cycle that was extraordinarily strong. We will go later a bit deeper into what leadership means. But the leadership at Oersted at the time to take this massive risk to say we will change from one way to the other was a radical step. So what kind of leadership does it take to do that? Yeah, it takes it takes leaders that are bold. It takes leaders. I think the leaders still need to manage risks. So, you know, I think it's not just, you know, just go for it and hope it will be fine. It's understanding the environment you work in, understanding your core capabilities, making sure that you are clearly, you know, the number one in this particular technology or industrial sector in the world. and and so it's that i think part of the problem for other companies particularly offshore wind sector is they've dabbled in it they've kind of done a bit but it's not their core so for all what was so powerful is they made it their core and they became really good at it so that's it's you know that is that's kind of leadership that you know you you go both both feet first into something but i don't think it's and i you know we might touch on that it's not reckless you have to i see a lot of people that are trying to unlock some very big particularly renewable fuel projects without really understanding the complexity of what they want to build and i don't think that's helpful because it you know when that project fails then everyone says well hydrogen is no good anymore as an example and and i think there's there's something about going in with your eyes open but making sure you're better than anyone else and if the world wants a commodity like offshore wind and you're better than anyone else you will make a good return because you will leave that industry and you you you mentioned which i think is probably one of the most important topics complexity. How do you manage the complexity today? I'm going to give a bit of a longer answer. What happened when I joined the board is, in 2023, we started to see problems in our US projects. Supply chain had tightened, inflation started hitting, and we had a situation with the regulatory complexity of the US that the projects became more expensive, instead of less expensive, and as a result, not executable. And we had to terminate this project called Ocean with one, led to a $4 billion write-off. Because everything had been getting cheaper, they were committing early, they were going ahead because it was always successful to do that before when costs were coming down but at this moment costs were going up and they committed too early the project wasn't executable and they had to terminate it so what it taught us and i was drafted in at that point from the board to be the coo because of understanding that industries go through cycles understanding commitment control risk management so this is a little bit to what i said about go in with your eyes open understand the risks understand the world can change and so that an ability to manage your risk and to make decisions in a very kind of staged way is so important for these enormous infrastructure projects and I think also learned that lesson that moment and I did something to change the operating model of how they deliver projects to actually make it more resilient how did you but these are really big projects how did I do that I was the COO and I had a mandate to change the project operating model. So I put a team together of some very young, high potential individuals and worked with them on quite clearly defining a better accountability and how they were delivering projects. Stronger focus on the supply chain and dealing with our suppliers. But most importantly, this stage gate commitment control and risk management to make sure that when they took decisions and said, we're going to start to invest now and award a big contract, everything, all lights were green. Because if you don't do that and the project becomes non-executable, it's very, very expensive to extract yourself. So we put that in place now. So Orsted's much more resilient. It still has a massive US portfolio issue in terms of finishing the projects being built there. But we might talk about that because that's the latest issue that Orsted has really navigated well, but actually has tarnished its impeccable story up to 2023 in how the US has become very difficult for them to execute their offshore wind projects. You said at the beginning that Ørsted enjoyed when they changed the support of the Danish government. Is that still the case? Yeah, so Ørsted is 50.1% owned by the Danish government. And the Danish government is one of the most enlightened governments in Europe. And actually, it's one of the best societies I've seen in Europe. So there's something very special about how the Danes manage their country and their industries. and they have supported Orsted through this journey. And I alluded to the fact that the US projects had become an issue, but we had particularly two projects, Sunrise and Revolution, that we are building. Revolution is kind of 85% finished now and Sunrise is about 40%. But because of the US project, because of the stop work order that went on Equinor's project, Sunrise, we couldn't sell down and we couldn't project finance. And so the credit agency said, you need to reduce your debt. We had 100% stake in Sunrise. And we were continuing to build this project. And as I say, it's very hard to stop and then pay off all the vendors. So we had to raise capital. We had to raise $9 billion in an equity raise. That meant the Danish government had to come up with $4.5 billion. And they did. They supported us. And we're now in a much stronger credit position. Allstead is delivering all these projects. We have to get through a stop work order we have on our revolution project in the US. But generally, it's in a much stronger place. And thanks to the Danish government supporting us through what has been a difficult few months for Allstead. Because we talk now about the Danish government, do you think it needs a multi-stakeholder approach to get things really done? Yeah. Yeah. No, I think particularly these new industries, particularly offshore wind is extraordinarily capital intensive. And the timelines for the revenue stream are 35 years and more. So to invest in these things, you need a very strong regulatory support. And I said, the electricity can be delivered at competitive prices. But in order to invest, let's say Hornsea 3 in the UK, it's eight billion pounds to build. It's three gigawatts when it's actually fully where the wind's blowing. It's the same as the very large nuclear plants being built in the UK. But, you know, eight billion pounds is a lot for a company, even of horseback size to invest in. And the only way you can invest in that in that way is to have a line of sight to your revenue stream. You can't go on a kind of merchant basis and say, I hope it could be OK. That's too high a risk to take. And so, you know, the CFD frameworks that the UK offers, this is Contract for Difference, where they offer a 15-year fixed amount for the electricity, is the kind of incentive that creates a bankable project. And continental Europe has kind of woken up to the fact that actually asking people to build offshore wind farms and just expose them to the merchant market is not enough. They have to provide some stability. So Denmark's changing, Netherlands are changing, Germany's looking to address it as well. because the merchant market for electricity is not yet in a mature place where you can get long-term PPAs of the size that you'll need to build these very large projects. Yeah, that was very insightful. Still, if we talk about the transformation, we also have to talk about carbon capture. Yes. Because it becomes more and more important. And I read that the IPCC suggests we may need to remove up to 10 billion tons of CO2 annually by 2050 to reach net zero. From your point of view, how likely is that to happen? Well, unfortunately, it's unlikely. I've been quite heavily involved in CCS projects, particularly in my time in Shell. but also in Orsted. So Orsted is doing, I think, something remarkable at the moment. They have two gigawatts of biofuel energy in Denmark in nine plants. On two of those plants, they're installing carbon capture projects. And the CO2 will then be liquefied and injected in Norway in the Northern Lights project. It's an amazing chain. and it means that this biofuel project will be actually negative co2 so the biofuel grows capture the biofuel make electricity but then sequester all the co2 so yeah that's that's uh i think kind of groundbreaking in its concept it's a negative co2 and we you know we get really good co2 credits from both from the danish government and from microsoft who who are buying those credits. So you can make an economic project out of that. But it needed Danish government support, and it needed a company like Microsoft that was looking for this kind of quality of credit in order to make it work. And without a global CO2 price, it's going to be hard to see the amount of CCS that we need. In my kind of experience, you need probably 150 to 200 euros per tonne kind of CO2 price to make carbon capture and storage more ubiquitous which is the kind of economic signal you need for meeting the ambitions the 10 gigatons you talked about But I don see any global intent to introduce a global CO2 price. In Europe, you've got reasonable CO2 prices. They need to probably double in order to make CCS more ubiquitous. But we're starting on that journey, And there are more projects now than there were, but not nearly enough. Andy, OK, I wanted to go actually with you into the global CO2 price. But before, you said at the beginning, you liquidize the CO2 and you ship it with the Northern Lights. Can you just go a little deeper into that? All right. So I was involved when I was in Shell in the Northern Lights project. So it's a project that Norwegian government with the support of Equinor has put together, which essentially takes an old platform and reservoir offshore in Norway. And so allows you then to dispose of the CO2 back in the reservoirs offshore. But to get it there, you either need a gas pipeline or you need to get it. And the choice they've taken is to you can actually liquefy CO2 quite easily. But you liquify the CO2 and then inject it offshore into the reservoir and it will stay there. You can obviously transport CO2 in a liquid CO2 ship under a chilled condition and some pressure. CO2 becomes a liquid. So that's the way of transporting. It's quite an expensive route. Most other CCS projects use compressed CO2, which you then inject back into the reservoir. but it's finding the right reservoirs that have the capacity to take the CO2 and linking them up to the sources of CO2, which is one of the big challenges. And you found one 2.6 kilometers below the seabed in Norway. Is that right? Yeah, I don't know exactly its depth, but it's, yeah. But I mean, look, I think the North Sea is an amazing sink for CO2. There are a lot of opportunities. We were just about to start building a CCS project when I was in Shell in Peterhead in northern Scotland, which would capture the CO2 from a gas-powered power plant and inject it into the abandoned GoldenEye project just offshore. The pipeline was in place. Everything was in place. The government had offered us a subsidy. And suddenly, just before we started building, the government said, no, there's no subsidy for you. And so we had to abandon it. And, you know, that for me, that type of flip flop in a government support is so damaging because it costs us a lot of money and we didn't obviously do the project. So it was wasted effort. So those are the kind of things that need to be put in place. It's a bit like offshore wind. How do you get us down the cost curve? How do we get the acceleration of that? You will need regulatory support. But if you look at the I know the UK quite well, because I'm a UK citizen. But the issue in the UK now is you have a government that's promising low electricity prices. And it is doing some CCS projects, track one CCS projects are going ahead. But it will increase electricity prices and then they get accused of not meeting their electoral mandate. And so, you know, they kind of have their hands tied a bit on the pace that they can go because of the general public and political willingness to pay what it will take to accelerate some of these technologies. And listening to your Shell and Ørsted example, how do you maintain purpose under such a pressure? Yeah, so I, you know, I think I've been amazed by the people of Ørsted. They are so dedicated their mission, a mission to make a world entirely run on green energy. And I think that drives and it drives the traction of the great talent. So I think it's a deep-rooted conviction and purpose. And there's a lot of evidence that purpose-driven companies do better than ones that are just purely there for economic gain. But all companies have cultures. And I find this whole issue of company culture a fascinating area. So this very strong culture of doing something to save the climate is very deeply rooted in Orsted. Shell had a deep culture of community and care and people development, which was also quite strong, I found. So it's about understanding and developing culture. Changing culture in a company is much more difficult, changing strategy. And so it's how do you consistently build the purpose and culture that you're looking for, particularly if you have an ambition to bring on green energy, to have an impact in the world that you can be really proud of? Well, we do know that you have led some of the world's largest and most complex energy projects. So the Pearl GTL project involving no less than 54,000 workers. Tell us about it. Well, yeah, I mean, that was the most we had. Probably 150,000 people came through the project one stage, but the most we had working at one point was 54,000. It was a project, you know, I was given the task of bringing Shell into Qatar and applying some specific technology called gas liquid technology. It's actually based on a German Fischer-Shopps process. so it was a way of taking natural gas which the categories have abundant natural gas and turn into very high quality lubricants and clean liquid fuels so this project was extraordinarily complex and and we negotiated um our entry to the country and the gafferies basically said no we you know we we want you to build a really big one so we ended up building project that cost us $18 billion to build. It was 100% Shell investment. So at that point, Shell was actually kind of risking its existence on this project being a success. Even a company the size of Shell actually needed this to work. And there were three and a half thousand patents on this project, unique Shell patents. So setting about how we're going to deliver this highly complex project requiring an enormous amount of manpower, of materials from right around the world, from a kind of global supply chain right around the world, was quite an interesting challenge. But we fundamentally did it by building strong teamwork. Strong teamwork, obviously in the Shell team, but also with all the companies that worked with us, all the contractors and we unified those teams around the concept of care and safety for people so no one actually would say i don't want to care for people i don't want them to be safe so it actually really bound us how we were going to put welfare systems in place put safety management systems in place that actually meant that we really valued every person that came onto our site and we broke safety records global safety records we had much higher quality than any other project that was being built at the time and much higher productivity because actually we became quite people-centric care-centric and it was an amazing experience so i kind of i really took a lot out of that in terms of what you can get back if you really care for people and i think it was only fair then that you have been awarded an ove for your contributions is that right? Well, me and the team. So yes, I played a role in that. But yeah, it was just great. So when you lead those massive projects, I read that you have a degree in engineering. How did that shape your approach? Well, you know, I think as an engineer, I think as an engineer, always an engineer, you know, so being fascinated in and what will it take to build something and applying your kind of engineering insights to it making decision engineering decisions on what couldn't shouldn't work i think is is very rewarding so as you might imagine you know 2000 this is between 2004 and and what 2006 we started building 2011 we finished you know going on site and seeing this enormous engineering marvel take shape yeah it was probably the the most amazing experience in in my life you did this massive massive project you got awarded and yet you move to another company and you move to portugal to do the energy transition at gulp yeah pourquoi well look i i i retired from shell 2019 I was 57 so I was still not you know still quite young but I had some medical issues and I decided to take it easier and then you know someone rings said look we have a position as a CEO in a European country and you say I'm not really interested in that and then they say it's in Portugal you say okay I'm really interested in that so I had been retired from Shell for about a year and I came to Gulp and one of the reasons I was attracted to come to Gulp which is a basically it's an oil and gas company with some renewables but the mandate was it was the end of 2020 the mandate was to transition this company to to become a green energy new energy renewable energy company and so that was kind of exciting uh you know for following in the sort of all-star footsteps and i think portugal obviously the biggest energy company is edp i mean gulp is the third largest company in portugal so it's quite a big company still but you know we then charted out how we were building renewable portfolio how we would get some greenfield project green fuel projects and hydrogen projects we also got a joint venture with northville Northvolt, the battery manufacturer, which subsequently unfortunately failed to do a lithium conversion facility. So we did a whole number of things to start building this renewable portfolio. And that was very exciting. The people in Portugal were amazing. They are such, such good leaders, engineers, very hardworking. And today, I mean, Galb is building, almost finished 100 megawatt electrolyzer and, you know, a very large kind of renewable aviation fuel project, HVO project. So, you know, we made some progress. Unfortunately, the company has shifted a bit back to oil and gas since I've left there. But it was amazing how, again, back to your point about purpose, how you could align people around this vision to work on new projects that will really have an impact to save the climate that really motivated people to actually do extraordinary things. So it was a great experience. Yeah. So how do you align people behind the vision? Well, I mean, we came up with a purpose. It was let's regenerate the future together. you know I think aligning I think people buy into the mission what you've got to do is get the most out of people and so it was a lot about unlocking the potential of the of the Portuguese talent which means empowering people giving them a purpose delegating authorities allowing them to take on accountability and I think people thrive in their environment and I you know I I think Northern Europe, probably companies have better empowerment processes. I mean, you see it in Orsted, you see it in other companies. But bringing that into Gulp, which was kind of new to Gulp, to empower people to make decisions, was kind of unleashed this latent potential that was in the people of Gulp. It was a great experience. I said at the beginning that you have become known for three things, and one of them is developing talent. Is that something that just happened, something you cultivated? What happened? Because we do know that one of the talents is now Shell's current CEO. So talk us through that a bit. You know, my theory of when you're a leader in a company, you can make the company financially stronger. You can build good high return assets and all that stuff. But the most important thing you leave behind is the people are developing the talent, either recruiting the right talent or developing the right talent with the company in order for that company to be stronger when you leave it than when you arrive in it. And so that for me is one of the most crucial roles of leaders. And so, you know, the story of, well, so when I was in 1999, he was 25, I was 37 and I was his boss. well I was running quite a big team and he came and he offered his resignation I said well why are you resigning he said I'm going to get an MBA in Harvard I said what I didn't know how good this guy was at that point and I soon found out how good he was and convinced him to say and over the next 20 years I worked with him in many locations and then I was very delighted for him to take over for me when I left Sharlan in 2019. So one of the reasons I left then was to give him an opportunity to shine further. And, you know, when he became CEO, that was a very proud moment. But, you know, I kind of, that probably is one of the proudest things I've ever done is to be part of his development. But you know I always think you got to look for talent in their mid in any company because they can be hidden And once you discover them you expose them you broaden them you accelerate them so that by the time they 50 they can take on senior leadership roles Too often, companies sit on their talent and don't unlock the potential that they have within. And I'm a great believer in those processes. really identifying the people that can make a difference and you know also giving them the sense of their role to do something special and to have an impact i mean while actually he had an interview from the times that he said he said oh i don't impress my mentor he saw more in me than i saw in myself so that's something i think i always kind of think about that you know you can sometimes see talented people they don't recognize they've got and so you just have to provide the opportunity for them to to unlock that potential yeah and when that happens to you this is a great moment for the mentor and for the mentee isn't it yeah yeah yeah yeah if you look at today's uncertainty and in the middle of transformation and even we want to go from short-term thinking to long-term thinking but then we kind of don't do we need different kind of leaders now do we need the same leaders what are what are the core qualities i you know i skills are transferable so you know i i was predominantly fossil fuel i'm now predominantly new energies sometimes there's a belief that somehow you know someone worked in fossil fuel they're tainted and therefore they can't be a benefit in the new energy system and that's wrong. I think that the skill sets are extraordinarily transferable and actually essential that we learn the lessons that we've learned in fossil fuels and apply them to new energies. You know I think leadership in any sector is all about how do you get the most out of the organizations you're working for. How do you create that inspiring vision of a future? I think undoubtedly it's easier to create a compelling purpose around saving the climate than it is necessarily just to get a good return. And it's actually interesting talking a bit about Shell. Shell under Ben van Burden, and it was what the capital markets wanted, was very focused on transitioning the company to be a lot lower CO2 company. Now, the capital markets changed. We also saw Shell move away from that mandate to transition past. and just saw a lot of people i mean it was it was kind of easy for the company to change its strategy but it's much more difficult to explain to the people what they had been personally convinced about in their role in helping shell transition wasn't today the focus and i you know i think that's so it's about how do you so when you want a company to change convincing everyone aligning them, empowering them to make a difference is crucial. Changing course is really tricky, particularly if you're going from a transition kind of strategy to one that is more back to the fossil fuels. And I think Shell has struggled in the last few years to actually capture that and convince everyone. I think they probably are there now. and we see BP go through that same storyline now I think with the new chair and the new CEO actually obviously focusing more on returns so it's a lot about it's a lot about you know obviously creating that vision unlocking the talent empowering people to make a difference and letting them there's something about giving people a mandate to think out of the box so often I say to young people it's not what you're asked to do that will define you you have to do that excellently anyway it's what you do you're not asked to do in order to deliver something extra you know take on a a new opportunity perhaps it's a green opportunity to make a difference so it's empowering people to take that risk I think is so important in those environments I agree with you and when you when you take that risk how do you find support we talk a lot about obstacles but how do you find support at that moment yeah I think you you know when you're delivering anything large and it was a bit kind of going back to my own memories of of getting into Qatar and and designing and building the project it's so much about broadening your team It's about communicating. It's about being open. It's about keeping everyone, you know, how people think information is power. No, it's about allowing everyone to understand what mission they're on. And I think there's something about being very open about what isn't working well. So one of the things on that Pearl GTL project was all of the CEOs of all the contractors building this project global ceos i'd bring in that six times i don't explain to them exactly what was happening the project what was going well what wasn't going so well um and they became a team so it went from a transactional relationship where you know i was the client there was a contractual i paid them so they were part of the team that were going to do this amazing thing so it's how do you create that sense of belonging to a team in as wide a group of people as you can in order to achieve your target. So I think that's such an important part of delivering extraordinary things. Andy, from what I hear, you seem to inspire a lot of people, but what about yourself? What's your compass? What inspires you? Well, you know, so I'm more driven by, you know, can I have an impact? Then, you know, am I going to create X multiples for some kind of business? can I help talent that's you know and my impact in the moment is how can I help drive an energy transition how can I you know I'm kind of long time retired from a kind of full-time job but still yeah I've got a lot of energy to to have some kind of impact and so you know I think we all we all have uh different things to bring to the table I I lived in eight countries so I kind of have a global kind of sense of, you know, the different cultures, global perspective. And I think obviously having time in fossil fuels, having time now in renewable energy, I kind of get also a sense of that spectrum of different ways to deliver energy. I think energy is the lifeblood of the world, right? So energy, you know, you look in history, it's only when energy became more accessible did the global economies grow. So it is such an important part of our world to make sure that energy is affordable, accessible, most important, sustainable is one of the most crucial challenges world faces. So can I have an impact on that? Can I provide my experience, which I've been so lucky to develop over the decades, to bring it to bear on how we could better create a better energy system of future generations? That's what drives me. You just mentioned in your answer to just en passant saying that you lived in eight different countries. Yes. So from what I understood, you are married and you got four children. How does that work? How do you bring it all together? Well, it only works because I've got an amazing partner, really. who's carried the family through all this journey. And I've lived in eight countries, yeah, for three years or more in each one. And we had four children, each born in a different country. We have four grandchildren now. So, you know, it's been a very rich and rewarding experience in terms of the family. But it's been one where we have moved a lot, which means I have an extraordinary wife that has just done such an amazing job in supporting me through that journey. 40 years I've been married. Congratulations. Also, of course, we have to mention that you had a heart problem, which is probably a given with your lifestyle. How did you deal with it? Well, interesting. Yeah, I had five heart bypasses in 2014, so it's now... almost 16 years ago. And I, you know, I have to say anyone that has had heart surgery and I didn't suffer heart attack, I was lucky enough to spot that I was not feeling great and, you know, I was checked up and they said that week they operated. And it wasn't because I smoked or it wasn't because of high cholesterol, it was because of stress. So, you know, I've told all sorts of wonderful things about what I've done, but I just don't manage stress very well. Perhaps I take things too personally. So as a result, you know, I had to have this major heart surgery, which is one of the reasons. I stayed on for five years in Shell before I retired, but I knew I couldn't do it forever. It was quite intense. But it really grounds you, gosh. You know, when you have something like that and you almost die, you realize actually what's important. At that point, certainly family and friends are much, much more important than work. And I think it grounds you. It makes you much more humble. And I got enormous support. I got enormous support from my boss, who was Ben Thunberg and CEO of Shell at the time, who I'd just competed. He had competed me to become the CEO of Shell. So in some ways, I was kind of going through a bit of a disappointment, not getting that job. But he supported me through it. And within eight weeks, I was fully back to work. So, you know, it's quite a, it's an amazing bit of medical technology to be able to do that and to be back to work, you know, relatively quickly. Andy, we started with the macro level and I would like to close it also on the macro level. Where do we go from here? Yeah, I mentioned something earlier about energy being the lifeblood of the world. And I, you know, I think if you look at history, you look at the last 200 years, our global economy has grown 100 times. energy demand has gone up 300 times. And for the 1800 years before that, almost nothing happened. So energy is so important for the world. And, you know, as we did mention data centers there, you know, knowledge is also energy. So it's going to be essential that we create a sustainable energy system. And everyone thinks in decades. And, you know, I think we should think in centuries about what this looks like, we will ultimately have to retool the energy system of the world. We have the ingredients. We have renewable energy in abundance that can power the world. We do need to electrify. We need EVs. We need heat pumps. And we need to decarbonise the hard-to-abate sectors. I think we'll get there. I don't think we'll get there fast enough to limit global warming to, let's say, anything below 2C. It's going to be, I guess, at best in the low 2 point somethings. And that will require a joined up global drive. It'll be a re-skilling. You know, IEA talked about 30 million additional people are needed in new energies. We're going to have to rebuild a global consensus. and the energy institute i awarded the president's award to secretary john kerry last year as president that's just such a great moment i mean he with obama brought a global consensus together on what needs to be done in paris in 2015 we need somehow to get back on tripe and create a global consensus because we don't we're not going to move fast enough and we're going to see a significant and climate change and weather effects. And a lot of people will suffer. So we can't afford that. So, yeah, we all need to do what we can to drive the individual technologies, but also, I think, to create that consensus all over again. COP in Brazil, I have to say, was disappointing in its output. And, you know, I think that process was, you know, one of our big hopes for a global consensus, and we're struggling. So we can all do our part, but I think we do need to see that change happen. I'm concerned that change will only happen when it becomes so desperate for people. There are no other alternatives. But that is possibly going to be too late for a lot of people. So, you know, what can I do? What can you do? What can we all do? You do a great job in your podcast and getting the message across and trying to spread. what has been successful things that have been done, but we just need to accelerate all those things. I'm so happy you said something, but what I really rarely hear from a leader, you said we should think in centuries. It was wonderful. It was a great hour. And I wish you absolutely all the best for whatever comes next or where you're now and what it takes. and I hope our listeners can take a lot away with them. Thank you very much. Thank you. Thank you for the conversation. Thank you for listening to Der große Neustadt with Sibylle Baden. Join us again when we next explore the people and the ideas reshaping our world. 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