Home Energy And Power Power-to-X Market Size, Share & Analysis by 2032

Power-to-X market

Power-to-X market Size, Share & Trends Analysis Report By Technology (Power-to-H2, Power-to-CO/Syngas/Formic Acid, Power-to-NH3, Power-to-Methane, Power-to-Methanol, Power-to-H2O2), By End-Use (Transportation, Agriculture, Manufacturing, Industry, Residential) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Report Code: SREP56205DR
Study Period 2020-2032 CAGR 12.0%
Historical Period 2020-2022 Forecast Period 2024-2032
Base Year 2023 Base Year Market Size USD 316.2 million
Forecast Year 2032 Forecast Year Market Size USD 877.0 million
Largest Market Europe Fastest Growing Market The Middle East and Africa
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Market Overview

The global Power-to-X market size was valued at USD 316.2 million in 2023 and is projected to reach USD 877.0 million by 2032, registering a CAGR of 12.0% during the forecast period (2024-2032). The critical driver of Power-to-X market growth is the need to combat climate change by lowering greenhouse gas (GHG) emissions.

Power-to-X (PtX) refers to technologies transforming electrical power into various energy or products. This concept is critical to the transition to renewable energy since it allows for storing and using excess electricity generated by renewable sources such as wind and solar. PtX technologies assist in balancing supply and demand by converting electricity into diverse energy carriers such as hydrogen, synthetic fuels, and chemicals. They also facilitate decarbonization and incorporate renewable energy into many industries.

The need to store extra solar and wind energy and balance power grids are critical drivers of market revenue growth. Furthermore, transitioning to a carbon-free energy economy through waste energy, excess power, and captured carbon dioxide will boost demand for power-to-x and market revenue growth. However, global power-to-x market growth is significantly impeded by adverse constraints such as very low selectivity to desired products, low efficiency, and high overpotentials.

Furthermore, the emphasis on developing power-to-x technology, which will primarily require a reduction in initial investment as well as an increase in process efficiencies, particularly in electrolysis, resulting in a decrease in the actual high production costs of fuels and chemicals generated using this technology, is expected to continue to open up lucrative business opportunities for major players and new entrants in the global market.

Highlights

  • Power-to-H2 dominates the market by technology.
  • Transportation influenced the market by end-use.

Market Dynamics

Global Power-to-X Market Drivers:

Increasing Renewable Energy Penetration

The growth of renewable energy sources, such as wind and solar, is causing considerable times of excess electricity output. Power-to-X (PtX) technology can transform excess electricity into various storable and transportable energy sources, including hydrogen, synthetic fuels, and chemicals. This capability contributes to grid balancing, curtailment reduction, and increased renewable energy consumption. By transforming intermittent renewable energy into a more stable form, PtX technologies facilitate the integration of growing renewables into the energy system.

In addition, with the rapid expansion of renewable energy generation, Germany has faced issues such as surplus electricity and curtailment. Germany has invested extensively in PtX research and development, with several pilot projects and commercial installations. In 2023, the German government announced a €270 million funding initiative to boost hydrogen generation in poor countries.

ARGE Netz, MAN Energy Solutions, and Vattenfall have announced plans to establish a large-scale power-to-gas plant at an industrial park in Brunsbüttel, northern Germany. The facility will manufacture green hydrogen and synthetic gases (SNG) using electricity provided by local solar and wind power plants. It is believed that green hydrogen will help with cross-sector decarbonization. It could be utilized as fuel for buses or ships, as well as in gas power plants and other industrial applications. The partnership aims to create a one-of-a-kind power-to-gas hub for cross-sector decarbonization in northern Germany.

Thus, the growing use of renewable energy in nations such as Germany highlights the significance of Power-to-X technologies. PtX contributes to increased renewable energy use, reduced curtailment, and improved grid stability by converting surplus electricity into storable and adaptable energy forms.

Global Power-to-X Market Restraints:

Regulatory and Policy Uncertainty

The regulatory environment for Power-to-X (PtX) technologies is still evolving, producing uncertainties that may impede investment and development. Clear and stable regulatory frameworks are critical to fostering market confidence and long-term planning. Corporations may only participate in PtX projects with uniform norms and regulations due to perceived risks and uncertainties about future profits. The European Commission issued its hydrogen strategy in 2020, aiming to increase hydrogen use in industry and transportation while encouraging renewable hydrogen production. However, the regulatory landscape is still growing, and complete and consistent regulations are required to accomplish these objectives fully.

Despite the lofty goals, the absence of a fully formed regulatory framework generates uncertainty for investors. Companies require long-term policy support and incentive assurance before allocating significant resources to PtX investments. For example, regulatory clarity on hydrogen blending into natural gas grids, green hydrogen certification, and cross-border hydrogen trading is still in progress.

Moreover, to capitalize on developing PtX prospects, developers must overcome hurdles provided by complex interdependencies, changing technologies, new regulations, and uncertain market situations. The difficulties are reflected in the timetable projections for PtX projects, which vary from seven to nine years from preliminary feasibility studies to beneficial operations. These extended timescales increase financial and schedule risks, causing market uncertainty.

Global Power-to-X Market Opportunity:

Transportation Sector Transformation

PtX technologies provide sustainable alternatives to traditional fossil fuels, making them a game changer in transportation. Green hydrogen and synthetic fuels created via PtX methods can considerably cut emissions from heavy-duty transit, aviation, and shipping, aiding worldwide efforts to combat climate change and satisfy environmental goals.

Furthermore, the EU agreed in April 2023 to phase out free emission permits for the aviation sector, with complete auctions beginning in 2026. The EU ETS incentivizes airlines to adopt SAF by assigning them zero emissions, which decreases their reported emissions and the allowances they must purchase. Airlines such as KLM, Lufthansa, and British Airways have begun using SAF-powered flights to promote sustainability. In August 2023, HCS Group and Lufthansa Group established an agreement to manufacture and supply SAF by 2026. The SAF will be manufactured using agricultural and forestry waste biomass at the HCS Group's Speyer, Germany.

Moreover, the widespread usage of SAFs made using PtX technologies can significantly reduce greenhouse gas emissions from the aviation sector. The International Air Transport Association (IATA) estimates that SAFs have the potential to reduce aviation emissions by up to 80% compared to traditional jet fuel. Governments and international organizations promote using SAFs through regulatory measures and incentives. The European Union's Renewable Energy Directive requires that 14% of the energy utilized in transportation come from renewable sources by 2030, creating a favorable policy environment for SAF implementation.

Regional Analysis

Europe Dominates the Global Market

The global Power-to-X market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa and Latin America.

Europe is the most significant global Power-to-X market shareholder and is estimated to grow at a CAGR of 11.9% over the forecast period. Supportive laws and regulations in Europe are critical for accelerating the implementation of power-to-X technology. For example, the European Union's Clean Energy Package includes provisions aimed explicitly at power-to-X implementation and support mechanisms for renewable hydrogen and synthetic fuel production. These regulations foster a favorable market environment, encourage investment, and drive innovation in European power-to-X technology.

Additionally, the UK's objective for increased offshore wind generation and geographical and network constraints allows for capturing and using wasted or curtailed renewable electricity when demand is low. Power-to-X offers options to transform this energy into low-carbon fuels and goods that can be utilized domestically or exported to global markets, contributing to the decarbonization of existing and future markets. Unlocking this potential will necessitate a better understanding of the constraints associated with connecting hydrogen supply and demand and the financial incentives or support required to build this emerging market.

The Middle East and Africa are anticipated to exhibit a CAGR of 12.2% over the forecast period. The MEA region is also seeing increased interest in the hydrogen economy. Embracing power-to-X technology can help build a hydrogen economy, create economic possibilities, boost regional cooperation, and contribute to long-term development goals. By November 2022, the UAE had six hydrogen projects under development, with a total investment of USD 1.66 billion. With these projects, the UAE will be able to supply 25% of the world's low-carbon hydrogen by 2030.

Furthermore, in January 2023, Masdar began constructing projects in Abu Dhabi to generate 500,000 tonnes of green hydrogen annually. In January 2021, the country established the Abu Dhabi Hydrogen Alliance, which includes ADQ, Mubadala Investment Company, ADNOC, and the Ministry of Energy and Infrastructure. In recent years, the UAE has made significant investments in renewable energy projects and investigated the potential of power-to-X technology.

Asia-Pacific is expected to remain among the most appealing marketplaces, accounting for most of the market's revenue share during the forecast decade. Asia-Pacific is expected to be the most promising segment during the projected time. China dominates the Asia-Pacific green hydrogen market. China dominates the global green hydrogen market, accounting for one-third of production (20 million tons). As the region's industrialization, urbanization, and support for renewable energy sources expand, so does demand for power-to-x technologies. These are some of the primary drivers of the Asia-Pacific industry's growth.

Moreover, North America needs a sustainable power supply with its increasing power use in the transportation sector. The power can be obtained by converting and transferring power. The new rural energy program in the United States includes agricultural products that generate at least 50% of their gross income from farming operations. This covers power generation within the enclosed circuit of electrical and hydrogen energy.

Report Scope

Report Metric Details
Segmentations
By Technology
  1. Power-to-H2
  2. Power-to-CO/Syngas/Formic Acid
  3. Power-to-NH3
  4. Power-to-Methane
  5. Power-to-Methanol
  6. Power-to-H2O2
By End-Use
  1. Transportation
  2. Agriculture
  3. Manufacturing
  4. Industry
  5. Residential
Company Profiles Air Liquide Linde Siemens Energy Mitsubishi Hitachi Power Systems HPEM2GAS Thyssenkrupp IRENA Neles Neles (Valmet Oyj) Weidmüller Copenhagen Infrastructure Partners Alfa Laval
Geographies Covered
North America U.S. Canada
Europe U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
APAC China Korea Japan India Australia Singapore Taiwan South East Asia Rest of Asia-Pacific
Middle East and Africa UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
LATAM Brazil Mexico Argentina Chile Colombia Rest of LATAM
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
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Segmental Analysis

The global Power-to-X market is segmented based on technology and end-use.

The market is further segmented by technology into Power-to-H2, Power-to-CO/Syngas/Formic Acid, Power-to-NH3, Power-to-Methane, Power-to-Methanol, and Power-to-H2O2.

The power-to-H2 sector had the most significant revenue share (almost 45%) in 2023 and is expected to stay dominant throughout the projection period. Power-to-H2 technology uses renewable electricity to manufacture hydrogen through electrolysis. This process converts water molecules to hydrogen and oxygen, producing green hydrogen if the electrical source is renewable.

Additionally, hydrogen generated by power-to-H2 can be utilized as a clean fuel in various applications, including transportation and industrial processes. By replacing fossil fuels with hydrogen, greenhouse gas emissions can be significantly decreased, resulting in the decarbonization of industries that are difficult to electrify directly, such as heavy-duty transportation, aircraft, and industrial heating.

The power-to-methanol segment is expected to increase significantly during the projection period. Methanol produced using power-to-X operations provides a pathway for decarbonizing the transportation industry. Using renewable electricity to manufacture methanol can considerably decrease or eliminate carbon emissions associated with traditional methanol production from fossil fuels.

Furthermore, methanol can be used as a handy hydrogen transporter, storing hydrogen without the complications of handling and storing pure hydrogen. In November 2022, the world's first commercial-scale CO2-to-methanol facility began production in Anyang, Henan Province, China. This plant can collect 160,000 tons of CO2 emissions each year, equivalent to taking almost 60,000 cars off the road.

The market can be further bifurcated by end-use into Transportation, Agriculture, Manufacturing, Industry, and Residential.

The transportation category generated the most revenue, accounting for more than 40%. Power-to-X offers a diverse energy transition pathway for the transportation sector. While battery electric vehicles (EVs) are becoming increasingly popular, power-to-X technologies provide an option for applications where batteries may not be the best choice due to considerations such as energy density, weight, or recharge time. Power-to-X helps to decarbonize transportation in a balanced and complete way by providing numerous solutions.

Consequently, hydrogen-powered fuel cell vehicles (FCVs), such as the Toyota Mirai and Hyundai Nexo, are already on the road and use green hydrogen produced using PtX technologies. The aviation industry is also looking at synthetic fuels; for example, Lufthansa has undertaken successful test flights with PtX-derived synthetic kerosene. The transportation sector emits around 24% of global CO2, with road transportation accounting for 71.7%. Hydrogen can be utilized to power fuel cell engines or internal combustion engines.

The residential category is expected to see significant expansion in the coming years. This segment's rise can be ascribed to the sector's emphasis on data governance. The power-to-X tool displays a company's data assets and locations, whereas data governance identifies data owners and consumers. It helps people manage their data.

As a result, many data users know who to contact when they have a data query. As data quantities have increased, power-to-X has emerged as a vital tool in the portfolio of data governance capabilities. The corporate structure provided by data governance also encourages teamwork and communication among data users across departments to synthesize all technical and commercial information about an organization's data assets. For example, the H21 project is a series of gas industry efforts in the United Kingdom to repurpose the current gas grid to carry 100% hydrogen.

Market Size By Technology

Market Size By Technology
  • Power-to-H2
  • Power-to-CO/Syngas/Formic Acid
  • Power-to-NH3
  • Power-to-Methane
  • Power-to-Methanol
  • Power-to-H2O2
  • Recent Developments

    • April 2024- Air Liquide expanded its biomethane capacity in the U.S. with two new production units.
    • May 2024- Linde signed an agreement to supply industrial gases to the world's first large-scale green steel plant.
    • May 2024- Siemens Electricity and Denmark's state-owned Energinet announced a framework agreement for EUR 1.4 billion (DKK 10.5 billion) to rebuild Denmark's electricity infrastructure. Energinet has chosen Siemens Energy to deliver transformers and switchgear for high-voltage substations to expand the country's power infrastructure, accelerating the green energy transition.
    • April 2024- H2Carrier planned Power-to-X synthesis of hydrogen and ammonia in Norway.

    Top Key Players

    Power-to-X market Share of Key Players

    Power-to-X market Share of Key Players
    Air Liquide Linde Siemens Energy Mitsubishi Hitachi Power Systems HPEM2GAS Thyssenkrupp IRENA Neles Neles (Valmet Oyj) Weidmüller Copenhagen Infrastructure Partners Alfa Laval Others

    Frequently Asked Questions (FAQs)

    How big is the Power-to-X Market?
    The global Power-to-X market size was valued at USD 316.2 million in 2023 and is projected to reach USD 877.0 million by 2032, registering a CAGR of 12.0% during the forecast period (2024-2032).
    Europe region dominates the Power-to-X Market.
    The prominent players in the market include Air Liquide , Linde , Siemens Energy , Mitsubishi Hitachi Power Systems , HPEM2GAS , Thyssenkrupp , IRENA , Neles , Neles (Valmet Oyj) , Weidmüller , Copenhagen Infrastructure Partners , Alfa Laval.
    The Increasing Renewable Energy Penetration drive the market growth.
    The market is segmented by technology and end use.


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