It is expected that the Combined Heat and Power Market will gain worth USD 51.26 billion in 2030 and a CAGR of 6.83% from the 27.74 billion USD in 2021.
The process of generating heat and electricity together is called combined heat and power generation. The process is carried out by burning several fuels like natural gas, biofuels and oil. Combined Heat and Power Market is a system which can recover lost energy by using waste heat. It provides heat to the power plant or the buildings connected to the power plant through a steam pipe network. These are some of the major factors which drive the market. The factors include growth in the deployment of technologies needed for energy efficiency and the growing use of government incentives that can promote market growth in future. People prefer technology over conventional electricity generation methods. The system is in demand as it consumes less fuel to produce energy. It reduces manufacturing process costs by reducing costs and lessens energy consumption. The presence of prominent companies that provide CHP technology boosts the market growth.
The prominent key players in the combined heat and power (CHP) market outlook are the following:
The COVID-19 pandemic is drastically impacted the demand for energy from the residential, commercial, and industrial sectors. Worldwide, the majority of the countries like the US, UK, China, and India have imposed lockdown restrictions, halting various industrial projects, and shutting down manufacturing operations, results in disruptions of supply chains and business operations lead to a decline in the energy demand. According to the report of the International Energy Agency (IEA), globally, the energy demand is decreased by 6% in 2020, which is approximately seven times the decline during the global recession of 2008. Moreover, there has been a decline in energy in the US by 9% and European region by 11%.
The combined heat and power (CHP) market is severely impacted. Moreover, most of the CHP manufacturers and suppliers are facing challenges due to supply chain disruptions, lack of workers, production halts, and cash flow constraints. Hence the COVID-19 pandemic results in a large number of financial losses for the market. However, the demand for CHP is rapidly increased by the lifting of lockdowns by the governments. It is expected to grow at a significant rate in the coming years.
The combined heat and power (CHP) has various advantages like reducing the manufacturing process costs by reducing redundant energy consumption. By utilizing the waste resources, energy can be resourced. The deployment of combined heat and power (CHP) technologies, growing the use of government incentives for promoting cogeneration, and the need for energy efficiency are the factors driving the growth of the global combined heat and power market. Governments related to different regions are promoting combined heat and power (CHP) technology through various favorable long-term policies and financial incentives which boost the combined heat and power (CHP) market growth during the assessment period. Moreover, the presence of a large number of companies that provide CHP installation services is accelerating the growth of the market.
High initial capital costs are required for the installation of combined heat and power (CHP) plant. This CHP plant requires additional equipment like absorption chillers, heat exchangers, boilers, and other equipment. The price of the CHP plant is equal to 240% of the cost of a power generation plant with the same capacity and prime mover which is hindering the market growth. Due to the complex assembly of the system that includes different components. The maintenance of these components required high efficiency which increases the overall cost of the system. The Combined Heat and Power (CHP) is used in only a need of both electricity and hot water on site is restricting the growth of the market.
Growing power reliability and saving money are boosting market growth.
Growing demand for renewable power generation like solar and wind energy acts as the challenge of the market growth. Stringent rules for emission in North America and Europe have spurred the installation of CHP systems for gaining energy efficiency and lower emissions leads to the rapid growth of renewable energy.
The global market has been divided into segments based on the type, fuel, technology, application, and region.
Based on Type
The global market based on type is bifurcated into large scale and small scale. Among them, large-scale CHPs are adopted by industries and small-scale CHPs in both residential and commercial areas.
Based on Fuel
The global market based on fuel is classified into a few types such as natural gas, coal, biomass, and others. Out of these segments, the natural gas segment is the fastest-growing segment due to the increasing share of natural gas in the energy mix in the Asia-Pacific region, majorly in China. The shale gas boom In the US contributed to the rise in the natural gas-fired power generation in North America which propels the market growth in this region. When compared to other fuels natural gas is cheaper.
Based on Technology
By technology, the global market is categorized into few types as a combined cycle, steam turbine, gas turbine, and others.
Based on Application
The global market by application is trifurcated into residential, commercial, and industrial. Out of these segments, the industrial segment is dominating the largest market share due to the rising need for power.
Based on Region
Region-wise, the global combined heat, and power (CHP) market are divided into four main geographies such as Europe, North America, Asia-Pacific, and the Rest of the World. Among them, Europe is holding the largest market share due to the presence of the largest cogeneration power plants in the world and is expected to continue its dominance in the review period.
Geographically, the combined heat and power market based on regions is classified into four major regions like Europe, Asia-Pacific, North America, and the Rest of the World. Due to the presence of the largest cogeneration power plants in the world, Europe is dominating the largest combined heat and power (CHP) market share. Availability of natural gas in Europe is very easy which makes installation easier and cost-effective. Due to the innovations and manufacturing centers in Germany, the Netherlands, and the U.K, Europe is considered to be a global leader in the micro-CHP engine which is boosting the demand for CHP installations in emerging countries like Belgium, Germany, Italy, and the Netherlands.
Apart from this, increasing demand for small-scale CHPs in Japan along with their growing installation across diverse industries is spurring the demand for the combined heat and power (CHP) in this region. For the development of green technology, the Japanese government provides subsidies. The demand for small-scale CHPs for both residential and commercial purposes leads to an increase in the market’s growth in this region. The growing installation of CHP systems in developing nations like India, South Korea, and China will raise the demand for large-scale CHP systems during the review period.
This global combined heat and power (CHP) market research includes the Market Overview, COVID-19 analysis, Market Dynamics, Study Objectives, Segment Overview, Regional Analysis, Competitive Landscape, Recent developments, Segmentation Table, and FAQs. The market scenario includes the combined heat and power (CHP) market drivers, restraints, challenges, and opportunities. The CHP market forecast segments are the type, fuel, technology, application, and region.
The combined heat and power market trends have been segmented globally based on the type, fuel, technology, application, and region.
Large scale and small scale.
Natural gas, coal, biomass, and others.
Steam turbine, combined cycle, gas turbine, and others.
Residential, commercial, and industrial.
Asia-Pacific, Europe, North America, and the rest of the world are the four main geographies included in the combined heat and power market.
|Market Size||2030: USD 51.26 billion|
|CAGR||6.83% CAGR (2022-2030)|
|Historical Data||2019 & 2020|
|Forecast Units||Value (USD Billion)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends|
|Segments Covered||Fuel, Technology, Type and Application|
|Geographies Covered||North America, Europe, Asia-Pacific, and Rest of the World (RoW)|
|Key Vendors||MAN Diesel & Turbo SE (Germany), Caterpillar Inc.(U.S.), Mitsubishi heavy Industries ltd.(Japan), General Electric (U.S.), Cummins(U.S.), Bosch Thermotechnology Ltd.( U.K),ABB Limited(Switzerland ), ENER-G Rudox (U.S.), Veolia (France )|
|Key Market Opportunities||Increased power reliability and save money|
|Key Market Drivers||
Frequently Asked Questions (FAQ) :
The technology is effective in industries that require both electricity and hot water on site. It is supposed to influence the growth of the market greatly.
6.83% CAGR is expected for the market between 2017 and 2023
The technology-based segments of the market are - combined cycle, gas turbine, steam turbine, and others.
The easy availability of natural gas makes the installation of CHP cost-effective. This, in turn, is expected to lead the expansion of the market in Europe.
Mitsubishi Heavy Industries Ltd.(Japan), Bosch Thermotechnology Ltd. (U.K), and ABB Limited(Switzerland) are few of the key players from Europe and Asia Pacific.