Power-to-gas (P2G) technology facilitates the storage of surplus renewable electric power in the form of hydrogen or methane. Hydrogen produced through water electrolysis using renewable energy can be further processed to synthetic natural gas through methanation and injected directly into the existing natural gas grid or used as vehicle fuel. The growing interest in renewable energy sources among businesses and consumers alike has boosted demand for large-scale energy storage technologies like power-to-gas. P2G systems help balance the intermittency associated with solar and wind power generation by converting surplus renewable electricity into energy-dense gas fuels that can be stored and transported via existing natural gas networks.
The global power-to-gas market is estimated to be valued at US$ 33.96 billion in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
The global power-to-gas market is driven by the growing interest in renewable energy sources, as referenced in the heading. Government incentives and policies promoting renewable power coupled with the ability of P2G technology to address the intermittency challenges of solar and wind are fueling widespread adoption. Power-to-gas systems help maximize the utilization of renewable assets by converting excess electricity into storable energy carriers. They enable effective large-scale seasonal storage of renewable energy in the form of hydrogen or methane. The potential of P2G to decarbonize other hard-to-abate sectors such as transportation, heating, and industry through green fuels is encouraging significant investments in this area. However, high installation costs and technical complexities continue to limit mainstream commercialization of power-to-gas systems. Ongoing technology advancements to reduce costs and improve overall efficiency will be critical for future market growth.
The power-to-gas market can be segmented based on technology into electrolysis and methanation. Among these, the electrolysis segment currently accounts for more than 65% share of the overall market and is expected to continue dominating over the forecast period. This is because electrolysis is an established technology for producing clean hydrogen through the breakdown of water into hydrogen and oxygen.
Political: Governments across various countries are increasingly supporting the development and adoption of power-to-gas facilities through favorable regulations and monetary incentives. This is being done to reduce dependence on imported fuels and achieve environmental targets.
Economic: The declining costs of renewable power generation and energy storage technologies are making power-to-gas economically viable for utilities, industries and commercial facilities to balance their energy needs.
Social: Issues like climate change and energy security are influencing both private and public organizations to incorporate greener technologies. Power-to-gas can aid the transition to cleaner energy through flexible storage of renewable power.
Technological: Advancements are ongoing to improve the efficiency and lower the capital expenditure of electrolyzers and methanation units. Projects are also exploring integrated solutions coupling these with renewable power plants.
The Global Power-To-Gas Market Size is expected to witness high growth over the forecast period due to supportive policies and increasing investments to balance intermittent renewable sources. Regionally, Europe accounts for the largest share currently due to favorable government initiatives and Early commercialization of projects in countries such as Germany. North America is also emerging as a major market driven by the development of hydrogen infrastructure.
Key players operating in the power-to-gas market are Kimberly-Clark Corporation, Essity AB, Georgia-Pacific LLC, Asia Pulp and Paper Group, Procter & Gamble Co., Sofidel Group, CMPC Tissue S.A., WEPA Hygieneprodukte GmbH, MetsÃ¤ Group, Cascades Inc.
The deployment of power-to-gas facilities is gaining momentum in various end-use industries including utilities, transportation and resource exploration, to enable cost-effective long-term storage of renewable energy. Companies are forming strategic partnerships to advance integrated solutions combining renewable power generation with storage and distribution infrastructure for clean fuels.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it