Power-to-methane (P2M) processes, by converting electricity from renewable energy to H₂ and then into other high value-added and energy-intense chemicals in the presence of active catalysts, have become an effective solution for energy storage. However, the fluctuating electricity from intermittent renewable energy leads to a dynamic composition of reactants for downstream methanation, which requires an excellent heterogeneous catalyst to withstand the harsh conditions. Based on these findings, the objective of this review is to classify the fundamentals and status of CO/CO₂ methanation and identify the pathways in the presence of various catalysts for methane production. In addition, this review sheds insight into the future development and challenges of CO₂ or CO methanation, including the deactivation mechanisms and catalyst performance under dynamically harsh conditions. Finally, we elaborated on the advantages and development prospects of P2M, and then we summarized the current stage and ongoing industrialization projects of P2M.