Energy CEO thinks natural gas will be around for years to come

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

This is a huge undertaking that requires huge sums of money, great political will and technological innovation. As the planned transition takes shape, much is being said about the relationship between hydrogen and natural gas.

During a panel discussion moderated by CNBC reporter Joumanna Bercetche at the World Economic Forum in Davos, Switzerland, the CEO of the energy firm AES offered his take on how the two could potentially move forward with each other.

“I feel very confident in saying that we need natural gas for the next 20 years,” said Andres Glusky, speaking Wednesday. “Now, what we can do today … is start mixing it with green hydrogen,” he said.

“So we’re doing tests in existing turbines where you can mix up to, say, 20%, and new turbines are coming out that are capable of burning … higher percentages,” Glusky said.

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

Green hydrogen, produced using electrolysis and renewable sources such as wind and solar, has some high-profile supporters.

These include German Chancellor Olaf Scholz, who called it “one of the most important technologies for a climate-neutral world” and “the key to decarbonising our economies”.

While some are excited about the potential of green hydrogen, it still represents a small fraction of global hydrogen production. Today, the vast majority are based on fossil fuels, which is at odds with net zero goals.

Change along 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 major deals involving the technology have taken place in recent years.

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

According to the announcement, the project will combine approximately 1.4 gigawatts of wind and solar power and will be able to produce more than 200 metric tons of hydrogen each day.

Despite the significant amount of money and renewable resources involved in the project, NPP chief Gluski was at pains to emphasize how much work remains to be done when it comes to expanding the sector as a whole.

The planned facility with Air Products, he explained, “could only serve one percent of the U.S. long-haul freighter fleet.” Then the work to be done.

High expectations, cooperation is important

Elizabeth Gaines, non-executive director of the mining giant, spoke with Glusky at the World Economic Forum. Fortescue Metals Group.

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

Expanding on the discussions, Gaines also spoke about the need for cooperation in the coming years.

It’s about “the resources needed to support the green transition and so on[ly] for green hydrogen production,” he argued, “there is a need to work closely with the government and regulators.”

“I mean, we need more lithium, we need more copper, but you can’t do that without approval, and you need regulatory approvals, environmental approvals,” he said.

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

Why is cooperation key to the prospects of the hydrogen sector?

Kivanch Zaimler, the president of Sabancı Holding’s energy group, also emphasized the importance of being open to new ideas and innovations.

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

Expanding his opinion, Zaimler spoke about the need for cooperation, especially when it comes to hydrogen.

“We need to bring all the right people around the table – academics, governments, the private sector, all the players in the value chain.”

This includes “production of electrolyser, membranes, green energy producers, users”.

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