Power To Gas Market Analysis Europe, North America, APAC, South America, Middle East and Africa - US, Germany, China, France, Japan - Size and Forecast 2024-2028

Power To Gas Market Size 2024-2028 

The power to gas market size is forecast to increase by USD 21.7 million, at a CAGR of 10.01% between 2023 and 2028. The market is experiencing significant growth due to cross-sectoral strategies aimed at integrating renewable electricity into the power grid. One key trend is the increasing adoption of electrolysis technologies to produce environmentally friendly hydrogen gas from renewable sources. This synthetic hydrogen can be used as a sustainable mobility solution, replacing traditional liquid fuels and chemicals in various industries. The electrolysis process, which converts water into hydrogen and oxygen using electricity, is becoming increasingly efficient and cost-effective. As the world moves towards sustainable development objectives, the demand for hydrogen and synthesis gas derived from renewable electricity is expected to increase. This shift in the energy landscape presents both opportunities and challenges for market participants.

What will be the Size of the Market During the Forecast Period?

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The market represents a significant advancement in the energy sector, focusing on the conversion of renewable energy sources into synthetic gas. This process involves the production of hydrogen gas through the electrolysis of water using renewable electricity. The resulting hydrogen can be utilized as an energy carrier for various applications, including transportation, heat supply, and industrial purposes. The market encompasses the production of synthetic gas from renewable resources such as wind energy and solar energy. This alternative approach to energy production offers numerous benefits, including the reduction of carbon emissions and the mitigation of pollution caused by fossil fuels.

Moreover, synthetic gas, which can be produced as methane or hydrogen, serves as a clean fuel that complements the electricity grid and contributes to improved air quality regulations. The electrolysis process is a crucial component of the market, converting water into hydrogen gas using renewable electricity. This process results in green hydrogen, which is produced entirely from renewable sources, and synthetic hydrogen, which can be produced from a combination of renewable and non-renewable sources. The synthesis gas, which is primarily composed of carbon dioxide and hydrogen, can be further processed into liquid fuels, chemicals, and other industrial applications. The market holds immense potential for the transportation sector, as hydrogen gas can be used as a clean fuel for fuel cell electric vehicles (FCEVs).

Furthermore, the production of synthetic gas from renewable resources can help industries achieve carbon neutrality and meet sustainability targets. In conclusion, the market represents a promising development in the energy sector, focusing on the conversion of renewable energy sources into synthetic gas. This approach offers numerous benefits, including the reduction of carbon emissions, the mitigation of pollution, and the provision of clean fuel for various applications. The electrolysis process, which is a crucial component of the market, enables the production of green and synthetic hydrogen, providing a versatile energy carrier for the electricity grid and contributing to improved air quality regulations.

Market Segmentation

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• End-user
  • Power to hydrogen
  • Power to methane
• Geography
  • Europe
    • Germany
    • France
  • North America
    • US
  • APAC
    • China
    • Japan
  • South America
  • Middle East and Africa

By End-user Insights

The power to hydrogen segment is estimated to witness significant growth during the forecast period. Power-to-gas (PtG) technology is an innovative approach to energy storage and utilization that converts excess renewable electricity, primarily from solar power generation, into hydrogen gas. This hydrogen can then be used as a clean energy source for various applications, including industrial production, chemical manufacturing, and even residential heating. The global hydrogen production is expected to increase significantly due to the growing adoption of PtG technology. Utility companies and industrial establishments are investing in PtG infrastructure to store excess renewable energy and ensure energy security. Solar panels generate electricity during peak sunlight hours, which is then used to produce hydrogen through electrolysis.

Furthermore, the resulting hydrogen can be injected into the natural gas grid or used as a fuel for transportation. The core of a PtG system is a proton exchange membrane (PEM) electrolyzer, which converts electrical energy into chemical energy. This stored chemical energy can be released as needed, providing a flexible and efficient energy storage solution. Financial institutions and infrastructure companies are also investing in PtG technology to support the global transition to renewable energy. The food and beverage industry is also exploring the use of PtG technology for the production of hydrogen as a feedstock for the synthesis of various chemicals and fuels.

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The power to hydrogen segment accounted for USD 16.90 million in 2018 and showed a gradual increase during the forecast period.

Regional Insights

North America is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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Another region offering significant growth opportunities to companies is Europe. In Europe, countries such as the United Kingdom, Germany, France, and Italy hold a significant share of the market. The Organization for Economic Cooperation and Development (OECD) and non-OECD European countries benefit from a reliable electricity grid, minimizing power outages. The automotive and energy industries in Europe exhibit a strong demand for high-power supply solutions. The presence of natural gas reserves in certain European regions plays a crucial role in the expansion of the market. European investments in the upstream sector have been substantial, driving market growth.

Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Market Driver

An increase in the supply of natural gas is the key driver of the market. The global natural gas market has witnessed significant growth in recent years, driven by the increase in unconventional resources such as tight gas, coalbed methane, and shale gas. According to the International Energy Agency (IEA), natural gas consumption is projected to rise from 3,630 billion cubic meters (bcm) in 2016 to 4,000 bcm by 2022. In the US, the successful extraction of shale oil and gas since 2008 has led to a rise in the country's natural gas production, which is expected to account for approximately 40% of the global natural gas output during the forecast period.

Moreover, the shift towards renewable resources for Power to Gas applications, such as methane and hydrogen derived from wind energy and solar energy, is gaining momentum. Synthetic gas derived from renewable resources is increasingly being used for transportation, heat supply, and industrial purposes, reducing carbon emissions and pollution. Power to Gas technology offers an effective solution for energy storage and grid stability, making it a promising alternative to traditional fossil fuels. In summary, the global natural gas market is experiencing growth due to the increase in unconventional resources and the shift towards renewable resources for Power to Gas applications. The US is a significant contributor to this trend, with its natural gas production expected to remain a major player in the global market. Power to Gas technology offers numerous benefits, including reduced carbon emissions, improved grid stability, and the potential for renewable energy storage.

Market Trends

An increase in number of CNG vehicles is the upcoming trend in the market. The market is witnessing significant growth due to cross-sectoral strategies focusing on the utilization of excess renewable electricity. Electrolysis technologies, a crucial component of this market, facilitate the conversion of hydrogen gas from water using sustainable energy sources. This process aligns with sustainable development objectives, as hydrogen gas can be used as a clean alternative for liquid fuels and chemicals, reducing greenhouse gas emissions. The electrolysis process plays a pivotal role in the production of synthetic hydrogen and synthesis gas, which are essential for various industries. The integration of hydrogen production with the electrical grid enhances grid stability and reliability.

Furthermore, the adoption of hydrogen as a sustainable mobility solution is increasing, with the development of fuel cell electric vehicles and buses. The market is expected to expand significantly due to the increasing focus on renewable energy and the need for eco-friendly solutions. According to industry reports, the market is projected to grow at a steady pace, reaching substantial value by 2025. The collaboration of key industry players, including biomethane producers, automotive suppliers, grid operators, and lightweight alloy component manufacturers, is further fueling the market's growth. This partnership is aimed at promoting the use of CNG as a viable alternative to traditional fossil fuels, thereby reducing carbon emissions and contributing to a cleaner environment.

Market Challenge

Volatility in natural gas prices is a key challenge affecting the market growth. The natural gas industry encompasses an intricate value chain, including production, distribution, and consumption. Predicting precise prices in this sector is a complex task due to its volatility. Natural gas prices have seen considerable fluctuations over the last decade, making it an unstable commodity. This instability can be attributed to the crude oil price cycle, which has influenced natural gas prices. Following the global financial crisis in 2009, LNG import prices experienced a substantial increase. However, a few years later, prices dropped due to weak economic conditions. The demand for natural gas is escalating as more industries and consumers shift towards it as a fuel source.

Green hydrogen, produced through the process of electrolysis using water, is gaining popularity as an alternative to natural gas in various sectors, including industrial, commercial, and utilities. Two common methods for hydrogen production are alkaline water electrolysis and Proton Exchange Membrane (PEM) technology. Green hydrogen offers several advantages, such as reduced greenhouse gas emissions, making it an attractive energy storage solution for the energy grid. The integration of green hydrogen into the energy sector can help stabilize natural gas prices by providing an alternative fuel source. Methanation, the process of converting hydrogen and carbon dioxide into methane, is another application for green hydrogen that can help reduce the reliance on natural gas.

Exclusive Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Electrochaea GmbH - The company offers power to gas that includes a patented biocatalyst to convert low-cost and stranded electricity and carbon dioxide into pipeline-grade renewable gas.

The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• AEG Power Solutions BV
• E.ON SE
• Electrochaea GmbH
• ENGIE SA
• ENTSOG AISBL
• EXYTRON GmbH
• Hitachi Zosen Inova AG
• INERATEC
• ITM Power PLC
• MAN Energy Solutions SE
• McPhy Energy SA
• MicroPyros BioEnerTec GmbH
• Nel ASA
•  Power-to-Gas Hungary Kft.
• Siemens AG
• Solarplaza
• Sunfire GmbH
• thyssenkrupp AG
• Uniper SE
• ZSW

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Research Analyst Overview

The market is a growing sector that focuses on the conversion of renewable energy sources, such as wind and solar, into synthetic gas, primarily methane and hydrogen. This process, also known as power-to-gas or power-to-X, plays a crucial role in decarbonizing various sectors, including transportation, heat supply, and industrial purposes. By utilizing excess renewable energy, power-to-gas contributes to energy storage and grid stability. Methane production through methanation is one of the processes used in the market. It involves the reaction of carbon dioxide and hydrogen, derived from renewable sources, in the presence of a catalyst. Hydrogen production through electrolysis, using renewable electricity, is another significant process.

Furthermore, the resulting hydrogen can be used as a clean fuel for transportation, as well as in industrial processes, chemicals, and power generation. The market also focuses on reducing carbon emissions and pollution by transitioning away from fossil fuels. Green hydrogen, produced from renewable electricity, is an environmental-friendly alternative to traditional hydrogen, which is often derived from natural gas and contributes to greenhouse gas emissions. The electrolysis process, using technologies like alkaline water electrolysis and PEM technology, is essential in hydrogen production. The market is cross-sectoral, with applications in utilities, commercial, and industrial establishments, as well as infrastructure companies.

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market  and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behaviour
• Growth of the market across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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