Power-to-Gas Market Analysis and Forecast to 2031: By Technology (Electrolysis, Methanation), Capacity (Less than 100 kW, 100–999 kW, 1000 kW and Above), Application (Residential, Commercial, Utility), and Region

Power-to-Gas Market Analysis and Forecast to 2031: By Technology (Electrolysis, Methanation), Capacity (Less than 100 kW, 100–999 kW, 1000 kW and Above), Application (Residential, Commercial, Utility), and Region

The global power-to-gas market was valued at US$ 30.3 billion in 2021 and it is anticipated to grow up to US$ 84.4 billion by 2031, at a CAGR of 10.8% during the forecast period.


Power-to-gas is a technology that converts electrical energy into methane or hydrogen syngas (synthetic gas). The hydrogen turning out in the power-to-gas industry is then utilized as a chemical in industries or fuel. The power-to-gas systems reserve excessive energy from renewable resources such as wind and solar energy and utilize it for several operations. These systems are stored for transportation, heat supply, and industrial purposes. The work of the power-to-gas industry is a constructive step in combining renewable resources with power generation sources. Further, the converted hydrogen and methane can be converted back into electricity, as they can be used as a backup power source.

Market Drivers and Trends

The power-to-gas technology offers several benefits over current energy storage technologies, including longer discharge times and higher power storage capacity. Hydrogen can also be injected directly into natural gas grids. However, due to safety and technical concerns, hydrogen injection is subject to regulations and varies from country to country.


Secondly, due to the falling costs of renewable energy technologies, including solar and wind, energy storage technologies such as power-to-gas technology are becoming increasingly attractive. The installed capacity of commercial electrolyzer systems has been increasing steadily over the past few years. There are only a few commercially viable water electrolysis technologies, and the two most widely used technologies are alkaline water electrolysis and proton exchange membrane electrolysis.


Thus, due to several benefits of power-to-gas technology boosts the market growth.

Market Restraints and Challenges

The energy resulting from power-to-gas technology is of a high value. Synthetic gas can store energy over long periods and transport well. At the same time, synthetic fuels have significant disadvantages. Many energy is lost during electrolysis, methanation, and storage, meaning producing them requires large amounts of renewable energy. After electrolysis, only about 67% to 81% of the energy remains, and after the additional step of methanation, only about 54% to 65% is left, according to the article published by Clean Energy Wire in June 2018. Synthetic fuels are laborious and will always be more costly and less efficient than direct electricity use. In addition, The high cost of power-to-gas technology means it's not expected to compete with fossil gas without government support and regulation, such as quotas for the share of synthetic gas in the national energy mix or a higher price on CO₂ (carbon dioxide) emissions. Therefore, power-to-gas technology's low efficiency and energy loss, regardless of all its major benefits, might act as a restraining factor for the power-to-gas market.

Global Power-to-Gas Market Segmental Overview

The report analyses the global power-to-gas market based on technology, capacity, application, and region.

Global Power-to-Gas Market by Technology

Based on technology, it is bifurcated into electrolysis and methanation. The electrolysis segment is expected to have the largest power-to-gas market share in 2021 due to its dynamic operations and the ability to effectively integrate electricity from fluctuating renewable energy sources such as wind and solar. The increase in awareness among the people regarding greenhouse gases and increasing demand for energy and fossil fuels have driven the growth of the electrolysis process in the power to gas market. Due to multiple benefits, the electrolysis segment is expected to receive the main market attraction resulting in market growth.

Global Power-to-Gas Market by Capacity

Based on capacity, it is segmented into less than 100 kW, 100–999 kW, and 1000 kW and above. The 1000 kW and above segment is expected to dominate the market during the forecast period because of the growing commercialization and implementation of several MW-size projects of power to gas technologies and demand from utilities and industrial applications. Above 1000KW capacity of power to gas, technology is used in large-scale utilities or industries, which are heavy electricity consumers. The need for power for manufacturing in various chemical and automotive industries has led to the search for an efficient alternative to providing a clean energy source for sustainability. Due to the abovementioned factors, the 1000 kW and above segment are expected to dominate the market during the forecast period.

Global Power-to-Gas Market by Application

Based on application, it is segmented into residential, commercial, and utility. The utility is expected to be the largest segment in the power-to-gas market in 2021. The utility segment is growing as power and gas utilities are looking to effectively produce hydrogen by integrating intermittent renewable power sources and have the flexibility of power system operations. Thus, the utility segment will likely hold a major market share in 2021.

Geographical Analysis of Global Power-to-Gas Market

Region-wise, it is studied across North America, Europe, Asia Pacific, and the Rest of the World. The Europe market is expected to hold the majority of the market share in 2021. This is because power-to-gas technology is expected to significantly stabilize the region’s energy supply and offset fluctuating power generation from renewable energy sources. A country such as Germany has seen a rising demand for power-to-gas technology, with the growing need for hydrogen from chemical, industrial and fuel cell transportation demand in the country. This, in turn, boosts the demand for power-to-gas in the Europe region.

Major Players in the Global Power-to-Gas Market COVID-19 Impact

In 2020, the COVID-19 pandemic had a negative impact on the power-to-gas market. There is a significant drop in demand for global gas. Chemical production, transportation, and industrial production industries were hampered for around four to six months due to the COVID-19 pandemic. The current expansion plans for electrolysis and methanation have been delayed by a minimum of one year. In the long term, the pandemic may benefit the power-to-gas market. Global governments are expected to focus on green gas and the reduction of harmful emissions into the environment.


However, in 2021, after the global vaccination, governments of various countries have taken initiatives to increase the investment in renewable energy-related industries, especially solar and wind power systems. An increase in investment is mostly to improve the national energy security during the pandemic and other crises. The activities mentioned above and changes in policies due to the COVID-19 pandemic positively impact the market's development during the forecast period.

Recent Developments

• January 2022, Energie 360°has partnered with Electrochaea GmbH to step up the development of the power-to-gas technology concept. Power-to-gas is a versatile technology that makes it possible to store surplus power from wind and solar parks in the natural gas network. This innovative technology makes an important contribution to solving the energy storage problem. The partnership will solidify Energie 360°’s position as a leading partner in environmentally sustainable energy solutions.
• December 2021, Air Products had awarded thyssenkrupp a contract to supply a more than two-gigawatt electrolysis plant for the green hydrogen projects at NEOM in Saudi Arabia. Under this contract, thyssenkrupp will engineer, procure and fabricate the plant based on their large-scale 20-megawatt alkaline water electrolysis module. Upon commissioning, the project partners, NEOM, ACWA Power, and Air Products (NEOM Green Hydrogen Company), will operate the facility to produce hydrogen to be synthesized into carbon-free ammonia for export exclusively by Air Products to global markets.
• June 2021, Baker Hughes had invested in Electrochaea. Through its investment, Baker Hughes enhanced its broader carbon capture and utilization portfolio and provided an integrated solution for customers across the carbon dioxide (CO₂) value chain to enable the production of low carbon synthetic natural gas from captured CO₂ and green hydrogen, helping meet the demand for cleaner fuels to advance the energy transition.

Frequently Asked Questions
Q1. How big is the power-to-gas market?Ans. The global power-to-gas market size was US$ 30.3 billion in 2021 and is anticipated to reach US$ 84.4 billion in 2031, growing at a rate of 10.8% from 2022 to 2031.
Q2. What is the power-to-gas market growth rate?Ans. The growth rate of the power-to-gas market is 10.8% from 2022 to 2031.
Q3. Which Ans. Europe holds a major market share of the power-to-gas market in 2021.
Q4. Which segment accounted for the largest power-to-gas market share?Ans. Based on technology, it is bifurcated into electrolysis and methanation. The electrolysis segment is expected to have the largest power-to-gas market share in 2021.
Q5. Who are the key players in the power-to-gas market?Ans. The global power-to-gas market report includes players such as
Q6. What are the factors driving the power-to-gas market growth?Ans. The major factor driving the growth of the market is several benefits of power-to-gas technology.
Q7. What are the key growth strategies of power-to-gas market players?Ans. The key growth strategies of power-to-gas market players are product launch, partnerships, and government initiatives.
Q8. Which Ans. The Europe region will provide more business opportunities for the power-to-gas market during the forecast period.

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