Owing to increasing demands for clean energy, caused by global warming, renewable energy sources have attracted significant attention. However, these sources can affect the reliability of electrical grids owing to their intermittency. Power-to-gas technology is expected to help address this issue. In this study, the CO2 methanation process, which yields synthetic natural gas (SNG) via the synthesis of CO2 and H-2 through proton exchange membrane (PEM) water electrolysis using surplus electricity generated from renewable energy, was evaluated and optimized based on techno-economic analyses. Requirements for the introduction of SNG produced through CO2 methanation in domestic natural gas markets are presented by considering various scenarios. Results indicate that, even if the electricity costs, including system marginal price and renewable energy costs, are minimal, the costs for PEM water electrolysis and CO2 methanation must be reduced by similar to$550/kW and 25%, respectively, relative to current levels for the viable introduction of SNG in domestic markets. (C) 2021 Hydrogen Energy Publications LLC. Published by Elsevier Ltd. All rights reserved.