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The CEO of Energy believes that natural gas will be on sale in the coming years

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

This is a colossal task that will require enormous sums of money, enormous political will, and technological innovation. As the planned transition takes shape, there has been much talk of a link between hydrogen and natural gas.

During a panel discussion moderated by CNBC’s Joumana Berche at the World Economic Forum in Davos, Switzerland, the CEO of the energy firm AES offered his take on how the two could potentially pair up with each other going forward.

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

“So we’re testing so you can mix it up to, say, 20% in existing turbines, and there are new turbines coming out that can burn … a much higher percentage,” Glusky said.

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

Green hydrogen, produced using electrolysis and renewable energy sources such as wind and solar, has a number of prominent supporters.

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

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

Change is on the way, but scale is key

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

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

According to the announcement, the project will include about 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 energy involved in the project, AES chief Glusky was at pains to emphasize how much work lay ahead when it came to expanding the sector as a whole.

The facility, which is planned to be built jointly with Air Products, he explained, can “only serve one percent of the US long-haul cargo fleet.” So, you have to work.

High hopes, with decisive cooperation

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

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

Broadening the discussion, Gaines also spoke about the need for collaboration in the years to come.

When it came to “the resources needed to support the green transition and the like[ly] for green hydrogen production,” she argued that it was necessary to “work closely with the 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 getting permits, and you need regulatory permits, environmental permits,” she said.

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

Why collaboration is key to the future of the hydrogen sector

Kivanch Zeimler, president of energy group Sabanci Holding, also emphasized the importance of openness to new ideas and innovation.

“We must — we must — embrace, we must welcome, we must support all technologies,” he said. This included both hydrogen and electric vehicles.

Expanding on his point, Seimler spoke of the need for cooperation, especially when it came to hydrogen.

“We need to bring all the right people to the table — academics, governments, the private sector, participants across the value chain.”

This included “electrolyzer production, membranes, green energy producers, users”.

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