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Combined Heat and Power Market/ CHP Market Research Report Information Report By Fuel (Natural Gas, Coal, Biomass and Others), By Technology, (Combined Cycle, Steam Turbine, Gas Turbine and Others), By Type (Large Scale and Small Scale), By Application (Residential, Commercial and Industrial) and By Regions - Global Forecast to 2032

ID: MRFR/E&P/2970-HCR | 188 Pages | Author: Priya Nagrale| May 2024

Global Combined Heat and Power Market Overview 

The Combined Heat and Power Market size was valued at USD 30.40 Billion in 2023. The Combined Heat and Power industry is projected to grow from USD 32.19 Billion in 2024 to USD 52.68 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.30% during the forecast period (2024 - 2032).Increased power reliability and the need for energy efficiency are expected to drive the global Combined Heat and Power systems market demand. The process of generating heat and electricity together is called combined heat and power generation, which is also termed cogeneration. The process is carried out by burning several fuels like natural gas, biofuels and oil.

Global Combined Heat and Power Market Overview1

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

A combined Heat and Power system 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. The major driving factors for the growth of the combined heat and power market 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 and reduces manufacturing process costs by reducing costs and lessening energy consumption. With this, the presence of prominent companies in the said market segment that provide CHP technology boosts the market growth.

Combined Heat and Power Market Trends

  • Reinforcement of Energy-producing plants and the increasing inclination towards smart heating systems is a major trend shaping the market's growth.

The combined heat and power market is said to have improved and evolved at a rapid pace as a result of the renovation and retrofitting of existing power-generating plants, as well as the decrease in prices brought about by the increased output of hydrocarbons. Additionally, higher energy efficiency, less fuel consumption, and improved ease of operation all contribute to the overall growth and development of the said market segment.

With this, the increasing demand for gas-fired systems derived from low fossil fuel wastes, in conjunction with the growing customer preference for clean energy, will surely be the driving force behind the development of combined heat and power systems installation. The growth of the said market will be aided by the substitution of conventional energy-producing systems with cogeneration units that are operating at excellent efficiency. One of the examples here is the new Remote Asset Monitoring (RAM) software that was introduced by MWM, a producer of gas engines and generator sets, in February 2021. This program was designed to monitor the functions of the combined heat and power systems and the distributed energy generation sites in real time. The newly developed digital condition monitoring solution helps to receive early warnings about any malfunctioning, which allows them to limit the likelihood of experiencing serious harm.

Combined Heat and Power Market Segment Insights

The Combined Heat and Power Market is primarily segmented on the basis of fuel type, technology and application. 

Combined Heat and Power Market Fuel Type Insights

On the basis of fuel type, the combined heat and power market is segmented into natural gas, coal, biomass, and others. Out of which the natural gas segmentation is the major market share holder in terms of value. Constant financing from private and public entities and government initiatives aimed at reducing the overall expenses associated with installation and operation are crucial factors that encourage the implementation of natural gas power plant projects.

Apart from this, the biomass segment is also set to hold a considerable trajectory of growth due to its reduced GHG emissions, extended operational life, diversified functioning capabilities, and enhanced safety characteristics. Additionally, the said segment outlook is significantly affected by key attributes such as newly constructed facilities powered by wood and agricultural fuels, established market acceptance, high calorific value, streamlined operations, and significant energy generation.

Combined Heat and Power Market Technology Insights

The combined heat and power market when segmented based on technology, is further sub-segmented into combined cycle, steam turbine, gas turbine and reciprocating engines. Among these, the combined cycle or CHP systems are said to earn the major market share. Combined cycle systems, which utilize waste heat accumulated in exhaust gases to generate additional electricity, reduce energy losses in power facilities. 

Combined Heat and Power Market Application Insights - 

The market for combined heat and power systems when segmented by application, is further divided into utilities, residential and commercial & industrial applications. Out of these, the Commercial & Industrial segment earns a major market share while the residential segment is estimated to have a high CAGR during the forecast period.

Combined Heat and Power Market Regional Insights 

The Combined Heat and Power Market is primarily studied across four prominent regions namely North America, Europe, Asia-Pacific and the Rest of the World.

Europe is said to have the largest market share among all the regions which is accounted for a valuation of USD 7.12 billion in 2021 and growing at the fastest growth rate. The increasing regional energy (heating) and cooling system demand in response to fluctuating climatic conditions in the entire European region, as well as ongoing technological advancements, deduced from fuel adaptability, are the key factors bolstering the geographical perspective of the CHP market.

North America stands second in terms of market share in the said market segment's global outlook, following Europe. It is anticipated that the combined heat and power market in North America will generate revenue of USD 2.5 billion by the year 2030. As a consequence of the stringent carbon emission objectives established by governments throughout the region, these nations are transitioning from coal-powered power plants to cleaner fuels to increase their energy mix. 

A combination of growing energy demand and the widespread adoption of gas-based technologies in the North American region is hastening the transformation of the business environment. Furthermore, the advancement of the combined heat and power (CHP) market in the region will be stimulated as a result of the increased demand for energy-efficient and dependable space heating technologies caused by extreme climatic conditions in Canada and a few U.S. states, including Alaska.

The Asia-Pacific region held a substantial market share in 2021. In addition to Australia and Japan, the region also encompasses China, South Korea, and India. Increasing market demand for renewable fuel energy, coupled with rapid industrialization and urbanization, will stimulate the growth of the market in the APAC region, resulting in the construction of new CHP systems in emerging economies. 

The Asia-Pacific region is recognized as the foremost consumer of energy, with technological advancements, power generation projects, and infrastructure expansions in China and India driving the region's development. These nations have enormous potential for the combined heat and power market as a result of their recent transition from coal-fired to gas-fired power generation and their accelerated economic expansion. Investments in sizable new coal-fired and gas-fired cogeneration facilities, in addition to the region's rising electricity demand, are anticipated to fuel expansion. With this, the combined heat and power system installations are backed by the governments of the region via a range of policies and research and development endeavours. Additionally, carbon emission reduction standards that are stringent and decentralized power generation will stimulate market expansion.

Combined Heat and Power Market Key Players & Competitive Insights 

The level of consolidation in the market for combined heat and power installations is moderate. Manufacturers are placing emphasis on establishing critical agreements and partnerships in order to participate in innovative initiatives and introduce technologically advanced products to the market. Furthermore, the industry has witnessed numerous small and medium-sized system integrators and major global and regional players implement novel strategies. 

Key Companies in the Combined Heat and Power Market 

  • 2G Energy Services

  • Aegis Energy Services Inc.

  • Bosch, Centrica

  • Mitsubishi Power 

  • Clarke Energy Inc.

  • Cummins Inc.

  • Doosan Fuel Cell America Inc.

  • Elite Energy Systems

  • General Electric

  • Kawasaki

  • Siemens

  • Veolia

  • Viessmann Werke

  • Wartsila

Recent Developments in the Combined Heat and Power Market 

July 2021 - 

In July 2021, Capstone Green Energy signed a contract for a period of ten years for the setup and operation of 1.2 MWs of micro-turbines in New York City. 

February 2021 -

In February 2021, Siemens and Guangdong Energy Group signed a partnership agreement to produce and operate F-class gas turbine island equipment for the China Zhaoqing Dinghu Combined Heat and Power (CHP) generation project.

February 2021 -

In February 2021, Wartsila and Kraftwerke Mainz-Wiesbaden entered into a contractual arrangement wherein Wartsila would provide a 100 MW combined heat and power (CHP) facility to supply the Mainz district heating network, which serves as a supply for the surplus combined heat produced during power generation, and which would reach nearly 40,000 contemporary single-family residences.

Combined Heat and Power Market Segmentation

Combined Heat and Power Type Outlook

  • Large scale

  • small scale

Combined Heat and Power Fuel Outlook

  • Natural gas

  • coal

  • biomass

  • others

Combined Heat and Power Technology Outlook

Combined Heat and Power Application Outlook

  • Residential

  • commercial

  • industrial

Combined Heat and Power Region Outlook

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • Rest of Europe

  • Asia-Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Australia

    • Rest of Asia-Pacific

  • Rest of the World

    • Middle East

    • Africa

    • Latin America

Report Attribute/Metric Details
Market Size 2023 USD 30.40 Billion
Market Size 2024 USD 32.19 Billion
Market Size 2032 USD 52.68 Billion
CAGR  6.30% CAGR (2024-2032)
Base Year 2023
Forecast Period 2024-2032
Historical Data 2019 & 2022
Forecast Units  Value (USD Million)
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 Need for energy efficiency Increasing use of government incentives to promote cogeneration

Frequently Asked Questions (FAQ) :

6.30% CAGR is expected for the market between 2024 and 2032.

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.

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.

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.

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