Power-To-Gas Market (By Technology: Electrolysis, Methanation; By End User: Commercial, Utilities, Industrial; By Capacity: Less than 100 kW, 100–999 kW, 1000 kW and Above) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2023-2032


The global power-to-gas market size accounted for USD 32.1 million in 2022 and is projected to hit around USD 80.01 million by 2032, growing at a CAGR of 10.1% during the forecast period from 2023 to 2032.

Power-To-Gas Market Size 2023 To 2032

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Key Takeaways

  • By technology, the electrolysis segment is expected to have the largest market share from 2023 to 2032.
  • In 2022, By end user, the utility segment is expected to have the biggest market share, in terms of revenue.
  • In 2022, By geography, the Europe region held the highest revenue share.

A technique known as "power-to-gas" converts electrical energy into methane or hydrogen syngas (synthetic gas). The hydrogen produced by the power-to-gas industry is used by other businesses as a chemical or fuel. Energy from renewable resources like wind and solar is stored in power-to-gas systems and used for a variety of uses. These systems utilize stored energy for transportation, heating, and industrial applications. The power-to-gas industry's operations are a positive step toward combining renewable resources with electricity-generating sources.

Growth in the demand for renewable hydrogen, which may lower carbon emissions in a range of different industries, is predicted to be the main factor driving the market's expansion. The primary element fueling the industry's expansion is the decline in the cost of electrolyzing technology. According to the International Energy Agency, electrolyze stacks represent between 50 and 60 percent of the capital investment. The remaining 40 to 50 percent of the investment is made up of components for the plant, power electronics, and gas conditioning. Global demand for power will increase due to population and economic expansion.

Growth Factors

The rise in the effective use of renewable energy sources and the joint management of power and gas networks are two important factors that are anticipated to promote the growth of the power-to-gas market over the forecast period.

  • The growing demand for electricity.
  • Increasing demand from the transportation sector.

Power-To-Gas Market Scope

Report Coverage Details
Market Size in 2023 USD 33.74 million 
Market Size by 2032 USD 80.01 million
Growth Rate from 2023 to 2032 CAGR of 10.1%
Base Year 2022
Forecast Period 2023 to 2032
Segments Covered
  • By Technology
  • By End User
  • By Capacity
Regions Covered
  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • Middle East & Africa

Power-To-Gas Market Dynamics

Key Market Drivers

  • Increasing demand for renewable hydrogen - The market is anticipated to rise as a result of the rising demand for renewable hydrogen, which has the ability to decarbonize numerous industries. The market is expanding as a result of the electrolyze technology's declining cost. According to the International Energy Agency, the electrolyze stacks account for between 50% and 60% of the capital expenditure, with the remaining costs being covered by things like power electronics, gas-conditioning, and plant components. By 2021, it is anticipated that high-temperature electrolysis prices will have decreased by 80%. Important players are also concentrating on developing modular renewable methane production. For instance, APA Group received a US $1.1 million grant from the Australian Renewable Energy Agency to construct a renewable methane production demonstration facility.
  • Increasing demand for electricity - The demographic and economic expansion of nations around the world is predicted to lead to an increase in the demand for electricity on a global scale. Companies are looking for ways to generate energy that is more affordable and efficient. Additionally, they are looking for ways to generate electricity that doesn't harm the environment. With the help of power-to-gas technology, renewable energy sources like solar and wind can be successfully integrated and stored for a long time. Since there are no toxic gases released, the electricity-to-gas technique has no negative effects on the environment.
  • Growing environmental concerns - The industry is expected to grow during the forecast period as a result of escalating environmental concerns. The government's increased efforts to lower the number of greenhouse gases produced by conventional vehicles are a factor in the system's rising demand. It is anticipated that the recent drop in the cost of renewable energy generation from sources like wind and solar will increase demand for power to the gas system. The governments of North America, Europe, and Asian nations are offering a variety of subsidies and incentives, such as tax breaks and unique advantages when registering new cars, to stimulate the sales of electric vehicles. To reduce CO2 emissions and improve air quality, the public sector is spending extensively on electrifying public transportation and increasing the manufacturing of electric buses. Therefore, the government's upcoming measures will undoubtedly benefit power to gas systems. In addition, the power utilities are working with producers of electric vehicles, which is another element contributing to the expansion of the power to the gas industry. 

Key Market Challenges

  • Price fluctuations for natural gas - The crude oil price cycle is a trend that the swings in natural gas prices have obliquely followed. LNG import costs considerably increased following the global financial collapse in 2009. But a few years later, prices fell sharply because of failing worldwide economic conditions. With the quick switch to the preference and adoption of gas as a fuel, the dependency on natural gas is growing. The likelihood of using natural gas as a fuel is anticipated to increase during the projected period due to the low natural gas costs at the moment. However, over time, this reliance on natural gas will cause its prices to rise due to the increasing demand, which would limit the market's ability to grow.

Key Market Opportunities

  • Rising green hydrogen infrastructure - It is anticipated that rising initiatives to build green hydrogen infrastructure in developing economies will soon open up significant potential for businesses in the power to the gas sector.

Technology Insights

On the basis of technology, the electrolysis segment is expected to have the largest market share in the coming years period, this segment has dominated the market in the past with the maximum share in terms of revenue and it will continue to grow well in the coming years. The segment is growing as a result of rising demand for energy and fossil fuels, more public awareness of greenhouse emissions, and increased market penetration.

Power-To-Gas Market Share, By Technology, 2022 (%)

Because of the increased usage of renewable energy sources to cut down on carbon emissions, the market is growing. Additionally, one of the elements propelling the growth of this market is the increasing need for fuel cells in electric vehicles. Since hydrogen produces fuel cells more efficiently and with fewer emissions, it is now used more frequently in their manufacture.

End User Insights

On the basis of end-user, the utility segment is expected to have the highest market share in the last year, in terms of revenue. The utility sector is expanding as gas and electric utilities aim to produce hydrogen more effectively by combining intermittent renewable energy sources and preserving the flexibility of the power grid. These are the main factors fueling the utilities segment's expansion in the global market during the course of the projection.

Due to the increasing desire of industries for cleaner forms of energy in order to lessen their dependence on fossil fuel-based power generation, the industrial segment is anticipated to experience considerable expansion over the course of the forecast period. In order to become less carbon-intensive and more energy-efficient in the future, industries are also spending money on research and development.

Regional Insights

On the basis of geography, the Europe region has held the highest revenue share in 2022. Some European nations, like Germany and Denmark, are in the midst of significant development of renewable electricity production, and it is anticipated that this will happen to a greater extent throughout Europe throughout the projected period. Low spot prices of electricity are anticipated to result from high power generation from intermittent sources. Additionally, it presents a chance for the creation of adaptable electro-intensive processes. Due to a number of programs and goals for integrating renewable electricity in Europe, power-to-gas has been technically validated at the pilot scale. In order to cut carbon emissions, the European energy sector is going through a significant transformation. The need for power-to-gas technology is anticipated to rise as a result of political RES integration and carbon reduction goals. 

To create a sustainable future in the power-to-gas market, the region has implemented some of the highest environmental standards and aggressive climate policies in the world. The maintenance of environmental pollution, and climate change and reducing greenhouse gas emissions through effective renewable energy systems are top priorities.

The government policies of various countries are expected to cause the power-to-gas market in Asia Pacific to grow significantly. In addition, it is projected that the region's economic recovery from the COVID-19 epidemic will further fuel the rise of the power-to-gas business in the ensuing years.

Recent Developments

  • In February 2022 – Mitsubishi Power and HydrogenPro have a purchase agreement in place for a substantial electrolyzer system. Through electrolysis, the HydrogenPro electrolyzer system will create green hydrogen and oxygen using wind and solar energy.

Power-To-Gas Market Companies

  • Hydrogenics
  • ITM Power
  • McPhy Energy
  • Fuelcell Energy
  • Nel Hydrogen
  • ThyssenKrupp
  • Electrochaea
  • Carbotech
  • Power-to-gas Hungary
  • Aquahydrex
  • Ineratec
  • Exytron
  • GreenHydrogen
  • Hitachi Zosen Inova Etogas
  • Siemens
  • MAN Energy Solutions
  • Uniper
  • Micropyros
  • Socalgas

Segments Covered in the Report

By Technology

  • Electrolysis
  • Methanation

By End User

  • Commercial
  • Utilities
  • Industrial

By Capacity

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

By Geography

  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • Middle East & Africa (MEA)

Frequently Asked Questions

What is the power-to-gas market size?
The global power-to-gas market size was estimated at USD 32.1 million in 2022 and it is expected to reach around USD 80.01 million by 2032.
What will be the CAGR of global power-to-gas market?
The global power-to-gas market is poised to grow at a CAGR of 10.1% from 2023 to 2032.
Who are the prominent players operating in the power-to-gas market?
The major players operating in the power-to-gas market are Hydrogenics, ITM Power, McPhy Energy, Fuelcell Energy, Nel Hydrogen, ThyssenKrupp, Electrochaea, Carbotech, Power-to-gas Hungary, Aquahydrex, Ineratec, Exytron, GreenHydrogen, Hitachi Zosen Inova Etogas, Siemens, MAN Energy Solutions, Uniper, Micropyros, Socalgas.
Which are the driving factors of the power-to-gas market?
The driving factors of the power-to-gas market are the increasing demand for renewable hydrogen, increasing demand for electricity and growing environmental concerns.
Which region will lead the global power-to-gas market?
Europe region will lead the global power-to-gas market during the forecast period 2023 to 2032.

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