The energy CEO believes that natural gas will be available in the coming years

AES boss says we need natural gas for the next 20 years

From the United States to the European Union, major economies around the world are laying out plans to move away from fossil fuels in favor of low-carbon and zero-carbon technologies.

It is a colossal task that will require vast amounts of money, political will and technological innovation. As the proposed transition takes shape, much has been said about the relationship between hydrogen and natural gas.

During a panel discussion moderated by CNBC’s Joumanna Bercetche at the World Economic Forum in Davos, Switzerland, the energy company’s CEO AES offered his opinion on how the two could potentially be dovetailed in the future.

“I’m very confident to say that we need natural gas for the next 20 years,” said Andrés Gluski, speaking on Wednesday. “Well what we can do today is… start mixing it with green hydrogen,” he added.

“So we’re doing tests that you can mix it up to say 20% into existing turbines, and new turbines are coming out that can burn … much higher percentages,” Gluski said.

“But it’s hard to imagine that in the next 10 years you’ll have enough green hydrogen to replace it.”

Green hydrogen is made through electrolysis and renewable energies like wind and solar, and has some high-profile backers.

Among them was Chancellor Olaf Scholz, who described it as “one of the most important technologies for a climate-neutral world” and “the key to decarbonizing our economies”.

While some are excited about the potential of green hydrogen, it still accounts for a tiny fraction of the world’s hydrogen production. Today, the vast majority is fossil fuel based, a fact at odds with the net zero goals.

Change on the way, but scale is key

The planet’s green hydrogen sector may still be in a relatively early stage of development, but a number of important deals related to the technology have been completed in recent years.

In December 2022, for example, AES and Air products said they plan to invest about $4 billion to develop a “mega-scale green hydrogen production facility” in Texas.

According to the announcement, the project will involve around 1.4 gigawatts of wind and solar and will be capable of producing more than 200 tons of hydrogen per day.

Despite the significant amount of money and renewable energy involved in the project, AES chief Gluski struggled to highlight how much work lies ahead of scaling the sector as a whole.

The facility planned with Air Products, he explained, could only serve “one percent of the US long-haul truck fleet.” Then work is announced.

High hopes, with crucial cooperation

Appearing alongside Gluski at the World Economic Forum was Elizabeth Gaines, a non-executive director of the mining giant Fortescue Metals Group.

“We see green hydrogen as probably the most important role in the energy transition,” she said.

Expanding on the discussion, Gaines also addressed the need for collaboration in the years to come.

When it comes to “the resources needed to support the green transition and things like that[ly] to produce green hydrogen,” she argued, “there is a need to work closely with government and regulators.”

“I mean, it’s one thing to say, we need more lithium, we need more copper, but you can’t do that without the permits, and you need the regulatory permits, the environmental permits,” she said.

“You know, these things take time and we don’t want that to be the bottleneck in the energy transition, much like the skills and resources we need.”

Why collaboration is key to hydrogen sector prospects

Kivanc Zaimler, President of the Energy Group at Sabanci Holding, also emphasized the importance of being open to new ideas and innovations.

“We have to – we have to – embrace all technologies, we have to welcome them, we have to support them,” he said. These included both hydrogen and electric vehicles.

In addition, Zaimler spoke of the need for cooperation, especially on the subject of hydrogen.

“We need to bring the right people around the table – academics, governments, private sectors, actors along the entire value chain.”

This included “the manufacture of the electrolyser, the membranes, the green energy producers, the users”. The energy CEO believes that natural gas will be available in the coming years

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