Power To Gas Market Size, Share, Trends, Growth & Forecast 2034

Power To Gas Industry Perspective:

What will be the size of the global power to gas market during the forecast period?

The global power to gas market size was worth around USD 46.29 million in 2024 and is predicted to grow to around USD 147.59 million by 2034, with a compound annual growth rate (CAGR) of roughly 13.75% between 2025 and 2034.

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Key Insights:

• As per the analysis shared by our research analyst, the global power to gas market is estimated to grow annually at a CAGR of around 13.75% over the forecast period (2025-2034)
• In terms of revenue, the global power to gas market size was valued at around USD 46.29 million in 2024 and is projected to reach USD 147.59 million by 2034.
• The power to gas market is projected to grow at a significant rate due to the rising demand for decarbonization in fuel-powered industries such as transportation and heavy industries.
• Based on the technology, the electrolysis segment is growing at a high rate and will continue to dominate the global market, as per industry projections
• Based on the end-user, the utilities segment is anticipated to command the largest market share
• Based on the capacity, the 1000 kW and above segment is projected to lead the industry growth trends
• Based on region, Europe is projected to dominate the global market during the forecast period

Power To Gas Market: Overview

Power-to-gas (P2G) is a process that converts surplus renewable electricity into gaseous fuels, such as methane or hydrogen. P2G is carried out through gas conversion and electrolysis processes. Power-to-gas is used for facilitating energy storage, thus supporting the integration of renewable energy into existing gas networks. Power-to-gas allows decarbonization of sectors that rely on fossil fuels. The demand for power-to-gas is driven by growing demand for reducing the environmental impact of the excessive use of fossil fuels worldwide.

In addition, a surge in hydrogen demand, along with the greater need for decarbonizing thriving industries such as transportation, will further promote market expansion in the long run. The industry may face growth challenges due to the high cost of power-to-gas conversion and the novelty of the process. Additionally, an unreliable renewable energy supply and low performance efficiency of the process may limit market expansion during the projection period.

Power To Gas Market: Dynamics

Growth Drivers

Why will the growing demand for decarbonization of fuel-powered sectors influence growth in power to gas market?

The global power to gas market is expected to be led by the rising demand for decarbonization in fuel-powered industries such as transportation and heavy industries. These sectors, along with aviation and shipping, are some of the largest fuel consumers and also result in severe environmental pollution. According to the International Energy Agency (IEA), aviation accounts for nearly 2.5% of the global energy-associated carbon dioxide emissions. In recent years, fuel consumption and pollution related to this sector have intensified. This, in turn, has resulted in a greater need to implement decarbonization initiatives. Power-to-gas is an effective means of achieving decarbonization, as the process involves the use of extra renewable energy to produce essential fuels such as hydrogen.

Expansion of the renewable sector to benefit players operating in the P2G sector.

Renewable energy is one of the fastest-growing markets as global energy demand continues to accelerate at an unprecedented rate. In 2024, global energy demand increased by 2.2% as reported by the IEA. Factors such as rapid population growth, industrialization, and urbanization are driving increased energy demand. Conventional energy generation methods are insufficient to meet global energy demand, necessitating greater investment in the renewable energy sector.

In 2025, more than 65.1 GW of new solar photovoltaic (PV) was installed across Europe, as per SolarPower Europe. The excess energy generated by renewable energy infrastructure can be stored as a fuel for further application using power-to-gas processes.

Restraints

Why will cost emerge as the most significant growth barrier in the power to gas market?

The global power to gas market is anticipated to be restricted due to the high cost of investment required to install, operate, and maintain the associated infrastructure. The majority of expenses are related to the use of high-performance electrolyzers, compression units, methanation systems, and storage solutions. For instance, the average cost of producing hydrogen using power-to-gas systems can range between USD 2.2 and USD 6.1 per Kg.

In addition, industry research suggests that the market has not achieved significant adoption across commercial segments, which further limits the industry’s overall revenue and poses a significant threat to the returns anticipated by the market players.

Opportunities

Growing use of green hydrogen across industries to promote market growth trends

The global power to gas industry is expected to generate growth opportunities due to the rising use of green hydrogen worldwide. Green hydrogen, in the last few years, has emerged as a highly effective and potentially clean alternative to pollution-causing fuel. It is widely preferred in heavy industries. In 2023, demand for clean, low-emission hydrogen increased by more than 9.9% as compared with 2022. Power-to-gas is used to produce clean, green hydrogen via electrolysis and next-generation electrolyzer technologies. As global dependence on traditional fuel reduces and shifts toward clean hydrogen, it will promote the expansion of the P2G market.

Which are the prominent government policies favoring the power to gas market?

Favorable government policies, such as financial incentives and tax subsidies for clean energy, along with renewed energy targets and emphasis on the adoption of hydrogen as an essential fuel, will work in favor of the global power-to-gas market players in the coming years. Regional governments are pushing for innovation in sustainable energy technologies and encouraging rapid incorporation across industries.

For instance, in November 2025, the Indian government announced the launch of a new INR 100 crore project to encourage innovation in green hydrogen technology. The initiative will aim to provide INR 5 crore to each chosen green hydrogen project.

Challenges

Lack of infrastructure and alternate technology availability will challenge industry growth trends

The global power to gas market is anticipated to be challenged by the lack of sufficient infrastructure supporting power-to-gas implementation. Limited availability of robust storage facilities and hydrogen pipelines will constrain the industry’s expansion trends. In addition, the growing availability of cost-effective alternatives, such as direct electrification and pumped-hydro storage, may affect business decisions in the long run.

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Power To Gas Market: Report Scope

Power To Gas Market: Segmentation

The global power to gas market is segmented based on technology, end-user, capacity, and region.

Why will methanation continue to lead the power to gas market during the projection period?

Based on technology, the global market divisions are methanation and electrolysis. In 2024, the highest growth was listed in the electrolysis segment, accounting for nearly 75% of the global revenue. The segment is projected to achieve a CAGR exceeding 12% over the forecast period, driven by the widespread adoption of electrolysis in power-to-gas processes. Moreover, advancements in electrolysis technology will aid segmental expansion in the coming years.

Which end-user segment will emerge as the most significant in the power to gas industry in the coming years?

Based on end-user, the global power to gas industry is segmented into utilities, commercial, and industrial. The industry was dominated by the utilities segment in 2024, leading up to 46.05% of global revenue. The segment is projected to deliver a CAGR of 13.02% over the forecast period, driven by growing demand for green hydrogen and rising investments in storage expansion in the utilities sector.

Why will 1000 kW and above continue to deliver improved CAGR in the power to gas market in the coming years?

Based on capacity, the global market is fragmented into 1000 kW and above, 100-999 kW, and less than 100 kW. The 1000 kW and above segment accounted for over 49.5% of global revenue in 2024. It is projected to deliver a CAGR of 11.07% during the projection period since it is a preferred capacity in heavy industries, especially the utilities segment. Moreover, the extension of storage capacity will enable market participants to keep pace with the growing surplus of renewable energy.

Power To Gas Market: Regional Analysis

Which factors help Europe dominate the power to gas market during the forecast period?

The global power to gas market is anticipated to be dominated by Europe during the projection period. In 2024, the region accounted for over 46.05% of the global revenue. It is projected to deliver a CAGR of over 7.9% over the projection period. Germany, the UK, and Spain are anticipated to emerge as leading countries in the regional market. Europe is one of the leading nations in terms of renewable energy production and integration into existing utility infrastructure. Favorable government policies and shifting demand toward clean energy sources will promote regional expansion across Europe during the projection period.

Why will Asia-Pacific emerge as the fastest-growing region in the power to gas industry in the coming years?

Asia-Pacific is set to emerge as the fastest-growing market with a CAGR of 8.5% over the coming years. The growing regional energy demand across emerging nations such as China and India will promote improved CAGR in the Asia-Pacific.

In addition, in recent years, green hydrogen production across the Asia-Pacific has increased further, thereby amplifying demand for power-to-gas processes. The introduction of new hydrogen production roadmaps, along with growing regional advancements in electrolysis technologies, will further promote improved growth in the Asia-Pacific.

Power To Gas Market: Competitive Analysis

The global power to gas market is led by players like:

• McPhy Energy
• Siemens Energy
• Engie
• ITM Power
• MAN Energy Solutions
• Equinor
• Thyssenkrupp
• ExxonMobil
• Linde
• Nel ASA
• TotalEnergies
• Plug Power
• Shell
• Air Liquide
• Uniper

What are the key trends in the Power To Gas Market?

Modular electrolyzers

A promising trend in the power to gas industry is the growing development and application of modular electrolyzers. These designs meet the modern requirement for flexible and versatile electrolyzers, thereby supporting market growth at a considerable rate.

Focus on methanation

Although the electrolysis-based P2G procedure is expected to continue dominating the market, ongoing advancements in methanation procedures may also help the market deliver significant revenue in the long run. Synthetic methane is gaining high popularity across end-user segments, driving investments in methane procedures.

The global power to gas market is segmented as follows:

By Technology

• Methanation
• Electrolysis

By End-User

• Utilities
• Commercial
• Industrial

By Capacity

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

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa