The European Union has proposed a target of 32% renewable energy in the EU’s overall energy mix by 2050. Therefore, efficient use of renewable energy resources is one challenge, as they are influenced by fluctuating environmental conditions. Consequent-ly, suitable energy storage and conversion tech-niques are required. The conversion of electricity to hydrogen as an energy carrier (Power-to-Gas) might contribute to solving the issue. The produced hydro-gen could be stored in porous formations in the un-derground and withdrawn at times of high energy demand. In addition, the concept of underground bio-methanation is arising, which uses the metabo-lism of subsurface bacteria to convert hydrogen with added carbon dioxide to methane. By using carbon dioxide captured from power plants or carbon-rich industries, a reduced carbon circle could be established.To investigate the potential of underground meth-anation, the current state of the art in terms of labo-ratory investigations and pilot tests is summarized in this article, and the microbial potential in the underground is demonstrated. Based on the find-ings, criteria for underground bio-methanation and its potential in a circular economy are concluded. Besides, the research projects related to hydrogen storage and the experience from town gas storage sites were analyzed, because some sites showed ex-tensive microbial activity during storage operations. In addition to the literature review, simulation stud-ies are considered. As the bio-methanation process itself was already studied over the years during the development of aboveground bio-reactors, the un-derground methanation is compared to engineered bio-methanation reactors.Until recently underground bio-methanation was only observed as a side-effect during hydrogen-rich gas storage operations, but may be interesting for the development of a designed underground bio-re-actor system in porous underground structures. The advantage compared to the engineered bio-methan-ation reactors is its enormous reactor volume com-bined with a possibility for large-scale storage, which are both stated to be critical aspects in the Power-to-Gas process chain. Critical factors for the underground bio-methanation are the presence and growth of the microbial population, which are sensi-tive to the reservoir conditions. High salinity brine and high temperatures can reduce the metabolism of the methanogenic microorganisms and thereby the conversion of hydrogen to methane. The behavior and the population kinetics of methanogens in a two-phase saturated porous media are not yet fully understood. Therefore, no efficiency factor or meth-ane production rates can be concluded currently. Nevertheless, experiments on a laboratory scale show a well-working conversion process in porous media. The potential of underground bio-methana-tion systems was estimated without clear efficiency factors, but based on the above findings.