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Power-to-Gas is Expected to Witness High Growth Owing to Increased Renewables Penetration

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Rajkumar cmi
Power-to-Gas is Expected to Witness High Growth Owing to Increased Renewables Penetration

Power-to-gas (P2G) refers to the conversion of surplus electricity from renewable energy sources, such as solar and wind, into a gas fuel such as methane or hydrogen. It provides a cost-effective and reliable means for storing and transporting renewable energy. P2G helps overcome issues related to intermittency of renewable energy sources and stabilizes power grids. It allows renewable electricity to be directly integrated into existing gas infrastructure for various applications across power, heating, and transportation sectors. The global Power-to-Gas Market is estimated to be valued at US$ 39.13 Bn in 2024 and is expected to exhibit a CAGR of 15% over the forecast period 2024-2031, as highlighted in a new report published by Coherent Market Insights.

Market Opportunity

Increased renewable energy penetration across major economies presents a huge market opportunity for power-to-gas technologies. Several countries have highly ambitious targets for renewable energy and many are aiming to achieve net-zero emissions by 2050 or sooner. This is expected to drive significant investments in energy storage technologies like power-to-gas to support large-scale integration of variable renewable power sources. Power-to-gas can facilitate increased renewables adoption by absorbing surplus green power and releasing it when renewable generation is low. As renewables come to dominate the power mix globally, power-to-gas is poised to play a critical role in stabilizing electricity grids and maximizing the utilization of clean energy resources.

Porter’s Analysis

Threat of new entrants: The power-to-gas market size requires high initial investments in R&D and infrastructural setup which poses significant barrier for new companies. However, the growing demand and opportunities in renewable energy sector can attract new players.

Bargaining power of buyers: The bargaining power of buyers is moderate as major customers in power-to-gas market are utilities and industrial consumers. Switching costs are relatively low.

Bargaining power of suppliers: Key raw materials include electrolyzers, fuel cells and other power-to-gas components. Established players have significant bargaining power over buyers due to specialized expertise and economies of scale.

Threat of new substitutes: Alternate renewable energy technologies can displace power-to-gas. However, its unique value in storing renewable energy provides some protection against substitution.

Competitive rivalry: The market is moderately competitive due to presence of numerous global and regional players. Companies compete based on technology innovation, service quality and geographic expansion.

SWOT Analysis

Strengths: Power-to-gas offers flexibility in utilizing surplus renewable energy and decarbonizing industries. It enables long-term energy storage at large scale.

Weaknesses: Initial setup and operating costs are high which hinders wider adoption. Complex conversion process requires further technological advances.

Opportunities: Growing focus on integrating renewables and reducing carbon footprint presents significant growth opportunities. Supportive regulations can spur infrastructure and capacity investments.

Threats: Uncertain funding landscape poses challenges. Dependency on intermittent renewable sources also impacts revenue potential of power-to-gas solutions.

Key Takeaways

The global power-to-gas market is expected to witness high growth on account of increasing importance of renewable energy integration and energy storage.

Regionally, Europe accounted for the largest market share in the base year. Countries like Germany, France, Netherlands and Denmark have established demonstration and pilot power-to-gas projects. Supportive regulatory framework focusing on decarbonization of energy and transport sectors has significantly boosted the European power-to-gas installations.

Key players operating in the power-to-gas market are Codexis Inc., Abzena, Ltd., Enantis s.r.o, GenScript Biotech Corp., Waters Corporation, PerkinElmer, Inc., Bruker Corporation, Agilent Technologies, Bio-Rad Laboratories Inc., and Thermo Fisher Scientific Inc., among others. Major players are engaged in new product launches, partnerships and geographic expansion to strengthen their position.

Get more insights on this topic: https://www.trendingwebwire.com/power-to-gas-market-size-and-opportunity-analysis/

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