Power-to-Gas Market Size (2023-2028):

The Global Power-to-Gas Market is expected to grow with a CAGR of 10.2% during the forecast period. The market was valued at USD 33.39 billion in 2022 and is anticipated to reach a valuation of USD 60.77 billion by 2028 between 2023-2028.

Market Overview:

Power-to-gas is a type of energy conversion technology that utilizes surplus electricity generated by renewable energy sources like solar and wind to produce hydrogen or methane, which can be stored for later use. The process of producing these storable forms of energy involves a process called electrolysis, which splits water molecules into hydrogen and oxygen. This technology is particularly useful for balancing the electricity grid during high renewable energy generation and low demand. The hydrogen or methane produced through this process can be used for transportation or heating or fed into the natural gas grid as a low-carbon alternative to traditional fossil fuels.

Market Drivers:

The rise in renewable energy from wind and solar power has produced excess electricity during low demand or high generation. This has significantly impacted the power-to-gas market as more renewable energy is integrated into the grid. Power-to-gas technology is a solution to store and use this excess energy by converting it into hydrogen or methane. The technology has the potential to create a reliable and stable energy supply and provides an essential element to the transition towards sustainable energy. Despite high capital costs, limited infrastructure, and regulatory barriers, the power-to-gas market is expected to grow significantly with increasing demand for renewable energy.

The demand for renewable energy sources like solar and wind power is increasing, leading to a greater need for energy storage solutions that can balance the grid during high energy production and low demand. Power-to-gas technology is emerging as a practical solution for storing excess renewable energy such as hydrogen or methane, allowing it to be used later. As a result, power-to-gas is becoming an important player in the energy market by providing a more stable and adaptable energy supply. As renewable energy continues to grow, the demand for energy storage solutions such as power-to-gas is only expected to increase.

The power-to-gas market is driven by the shift towards cleaner energy sources and the need for low-carbon fuels. Power-to-gas technology produces hydrogen or methane, which can be utilized as alternative fuels for transportation and heating. With increasing concerns over greenhouse gas emissions and climate change, the demand for low-carbon fuels is growing rapidly. Power-to-gas technology is vital in providing a sustainable and eco-friendly energy solution that can help reduce carbon emissions. As more countries adopt ambitious renewable energy goals and stricter emissions regulations, the power-to-gas market is expected to expand as a viable low-carbon energy source.

Market Restraints:

One of the challenges facing the power-to-gas market is the limited infrastructure for storing and distributing hydrogen or methane, which may limit the market for these fuels. While the technology for producing these fuels has advanced significantly, the infrastructure for storage and distribution is still in the early stages of development. This may limit the availability and accessibility of low-carbon fuels produced through power-to-gas technology, hindering the market's growth. However, efforts are underway to develop this infrastructure, which could lead to increased adoption of power-to-gas technology and low-carbon fuels.

Power-to-gas technology faces competition from other energy storage solutions, particularly batteries. As battery technology improves and becomes more cost-effective, it may become a more attractive option for storing excess energy generated by renewable sources. In addition, batteries have a higher round-trip efficiency than power-to-gas technology, meaning less energy is lost during storage and retrieval. However, power-to-gas still offers unique advantages, such as storing energy for longer periods of time and producing low-carbon fuels. Therefore, the battery competition may impact the power-to-gas market's growth in some regions.

Market Opportunities: 

The power-to-gas technology can produce hydrogen, which has the potential to be utilized as fuel for hydrogen fuel cells in various applications, such as transportation. The rising need for eco-friendly and sustainable energy solutions and the growing interest in hydrogen fuel cell technology can offer new opportunities for power-to-gas technology. However, to further promote hydrogen as a fuel, comprehensive hydrogen fueling infrastructure needs to be developed, which can enhance the market for power-to-gas technology.

Power-to-gas technology offers opportunities for producing low-carbon or carbon-neutral fuels when combined with Carbon Capture and Storage (CCS) technology. As there is an increasing demand to reduce carbon emissions and achieve carbon neutrality, the market for power-to-gas technology is expected to grow in producing low-carbon fuels. In addition, as CCS technology continues to develop, it presents a promising future for power-to-gas technology to provide sustainable and eco-friendly energy solutions that can help combat climate change.

Impact of COVID-19 on the power-to-gas market: 

The COVID-19 pandemic has impacted the power-to-gas market in various ways. The decrease in energy demand caused by the pandemic has slowed the adoption and growth of power-to-gas technology. Additionally, supply chain disruptions and construction restrictions have delayed the implementation of power-to-gas projects. However, the pandemic has also highlighted the need for reliable and sustainable energy solutions, increasing the demand for renewable energy sources and energy storage solutions like power-to-gas. The shift towards remote work has also created opportunities for expanding the power-to-gas market in developing virtual power plants and energy trading platforms. Overall, the pandemic has presented challenges for the power-to-gas market and opportunities for innovation and growth in the renewable energy sector.

POWER-TO-GAS MARKET REPORT COVERAGE:

Market Segmentation: 

Power-to-Gas Market - By Technology:

• Electrolysis
• Methanation

Electrolysis is the dominant technology in the power-to-gas market. The hydrogen produced can be used as a fuel for various applications such as transportation, power generation, and industrial processes.

Power-to-Gas Market - By Capacity:

• Less than 100 kW
• 100–999 kW
• 1000 kW and Above 

1000 kW is dominating the market because larger power-to-gas systems are more suitable for commercial and industrial applications where higher volumes of hydrogen are required.

Power-to-Gas Market - By Application:

• Energy storage
• Grid balancing
• Renewable energy integration

Energy storage is dominating the power-to-gas market because energy storage is becoming increasingly important as renewable energy sources such as solar and wind become more prevalent. These energy sources are intermittent, meaning they do not produce a constant energy supply and therefore require energy storage to ensure a steady electricity supply.

Market Regional Analysis: 

The Global Power-to-Gas Market Report includes the segmentation of regions:

• North America
• Europe
• Asia-pacific
• Middle-east and Africa
• South America

Europe dominates the power-to-gas market due to its ambitious renewable energy targets, strong policies supporting renewable energy development, and well-developed natural gas infrastructure. North America also has a significant market due to its abundant natural gas resources, government policies promoting renewable energy, and growing demand for low-carbon fuels. Asia-Pacific is expected to grow rapidly due to increasing government support for renewable energy and the potential to reduce dependence on fossil fuels. Middle-east and Africa, and South America are currently smaller markets. Still, they are expected to grow due to the increasing demand for low-carbon energy and the availability of renewable energy resources. Power-to-gas technology could be a key solution to storing excess renewable energy and reducing dependence on fossil fuels in these regions.

Market Key Players:

1. Siemens AG
2. Hydrogenics Corporation
3. ITM Power
4. McPhy Energy S.A.
5. Audi AG
6. MAN Energy Solutions SE
7. Uniper SE
8. Electrochaea GmbH
9. Enbridge Inc.
10. Green Hydrogen Systems A/S
11. Air Liquide

Market Key Developments: 

• In May 2021, Siemens Energy announced that it had successfully commissioned its first industrial-scale power-to-x pilot plant in Germany. The plant uses renewable electricity to produce hydrogen for various applications.
• In January 2021, Air Liquide announced that it had started constructing a new 20 MW electrolyzer plant in Canada, producing low-carbon hydrogen for the transportation sector using power-to-gas technology.