POWER-TO-GAS MARKET ANALYSIS

Market Challenges And Opportunities

High cost of power-to-gas system to hinder the market pace

Despite the multiple advantages of power-to-gas system, the high cost is one of the factors impacting adoption of these systems. The end user industries in middle- and low-income countries show uncertainty towards adoption power-to-gas systems, due to their high initial cost as well as the cost of maintenance. Moreover, the lack of trained professionals to operate these systems also impacts the adoption. Thus, these factors are expected to hinder growth of the global power-to-gas market over the forecast period.

Loss of energy and low efficiency to hinder the market pace

The use of power-to-gas system also poses risk of energy loss. In the first step of electrolysis process, nearly 20 to 30% of energy is lost. After the second step in methanation, 40 to 50% of energy is lost. As a result, the loss of energy acts as a major challenge in adoption of power-to-gas systems. This factor in turn is expected to impede growth of the power-to-gas global market over the forecast period.

Market Drivers:

Growing shift to renewable energy sources to boost the market growth

Countries around the world are capitalizing on the renewable resources and are involved in major investments through R&D in order to make a significant shift toward decarbonization. As the fossil fuel reserves are limited resources, they cannot cater the ever-growing demand for energy around the world. Thus, demand for technological creativity is increasing to cater the growing need for energy. This increasing shift toward renewable energy sources is therefore expected to drive growth of the global power-to-gas market over the forecast period.

Government initiatives toward reducing emission of CO₂ to fuel the market growth

Due to the concept of carbon footprint, awareness regarding amount of carbon dioxide emitted and its impact on the environment is increasing among producers and consumers. There is a rise in emphasis on carbon footprint due to which, the demand for environmentally friendly products is increasing. As a result, the demand for power-to-gas technology is increasing all over the world to reduce the emissions of carbon dioxide. Thus, this in turn is expected to drive growth of the global power-to-gas market over the forecast period.

Market Opportunities:

Increasing demand for hydrogen is expected to create multiple growth opportunities in the global power-to-gas market over the forecast period. The momentum to reduce the greenhouse gas emissions around the world is increasing, due to which the use of hydrogen as a green transportation fuel is increasing globally. This in turn is creating opportunities for the development of a clean mobility sector. The amount of carbon dioxide emitted by the transportation sector is huge and curtailing this amount of emission, industry is widely adopting various alternatives. The use of power-to-gas technology is therefore increasing in this sector, which in turn is creating opportunities in the global market.

Increasing need for energy storage flexibility is likely to generate business opportunities in the global power-to-gas market over the forecast period. The need for transforming the energy system is increasing all over the world. The power-to-gas technology can develop sustainable, flexible, and efficient energy system. Thus, to cater the growing demand for synergic system capable of integrating the major components such as heat, gas, and electricity, the demand for power-to-gas is increasing, which is expected to drive the market growth in the near future.