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

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From the US to the European Union, major economies around the globe are laying out plans to maneuver away from fossil fuels in favor of low and zero-carbon technologies.

It is a colossal task that can require massive sums of cash, huge political will and technological innovation. Because the planned transition takes shape, there’s been a number of talk concerning the relationship between hydrogen and natural gas.

During a panel discussion moderated by CNBC’s Joumanna Bercetche on the World Economic Forum in Davos, Switzerland, the CEO of energy firm AES offered up his tackle how the 2 could potentially dovetail with each other going forward.   

“I feel very confident in saying that, for the subsequent 20 years, we want natural gas,” Andrés Gluski, who was speaking Wednesday, said. “Now, what we will begin to do today is … begin to mix it with green hydrogen,” he added.

“So we’re running tests which you can mix it as much as, say 20%, in existing turbines, and latest turbines are coming out that may burn … much higher percentages,” Gluski said.

“Nevertheless it’s just difficult to see that you’ll have enough green hydrogen to substitute it like, in the subsequent 10 years.”

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Produced using electrolysis and renewables like wind and solar, green hydrogen has some high-profile backers.

These include German Chancellor Olaf Scholz, who has called it “probably the most essential technologies for a climate-neutral world” and “the important thing to decarbonizing our economies.”

While some are hugely enthusiastic about green hydrogen’s potential it still represents a tiny proportion of world hydrogen production. Today, the overwhelming majority is predicated on fossil fuels, a fact at odds with net-zero goals.

Change on the way in which, but scale is vital

The planet’s green hydrogen sector should be in a comparatively early stage of development, but various major deals related to the technology have been struck in recent times.

In December 2022, for instance, AES and Air Products said they planned to take a position roughly $4 billion to develop a “mega-scale green hydrogen production facility” positioned in Texas.

In response to the announcement, the project will incorporate around 1.4 gigawatts of wind and solar and find a way to supply greater than 200 metric tons of hydrogen daily.

Despite the numerous sum of money and renewables involved within the project, AES chief Gluski was at pains to spotlight how much work lay ahead when it got here to scaling up the sector as a complete.

The power being planned with Air Products, he explained, could only “supply point one percent of the U.S. long haul trucking fleet.” Work to be done, then.

High hopes, with collaboration crucial  

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

“We see green hydrogen as playing probably crucial role within the energy transition,” she said.

Broadening the discussion, Gaines also spoke to the necessity for collaboration within the years ahead.

When it got here to “the resources which can be needed to support the green transition, and similar[ly] to the production of green hydrogen,” she argued there was a necessity “to work closely with government and regulators.”

“I mean, it’s one thing to say we want more lithium, we want more copper, but you may’t do this without getting the approvals, and you would like the regulatory approvals, the environmental approvals,” she said.

“You understand, these items do take time, and we would not want that to be the bottleneck within the energy transition, just like the abilities and resources that we want.”

Why cooperation is key to the hydrogen sector's prospects

Kivanc Zaimler, energy group president at Sabanci Holding, also stressed the importance of being open to latest ideas and innovations.

“We now have to — we want to — embrace, we’ve got to welcome, we’ve got to support all of the technologies,” he said. These included each hydrogen and electric vehicles.

Expanding on his point, Zaimler spoke of the necessity for cooperation, especially when it got here to hydrogen.

“We now have to bring all the correct people across the table — academicians, governments, private sectors, players around your complete value chain.”

This included, “the manufacturing of the electrolyzer, the membranes, the green energy producers, the users.”  

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