ID: MRFR/E&P/0603-CR | 132 Pages | Published By Anshula Mandaokar on April 2022
The global Micro Combined Heat and Power Market is expected to reach USD 3,870 Million by 2030 and register a CAGR of 13.5% during the forecast period of 2022 to 2030
2022 - 2030
The global micro combined heat and power market is expected to reach USD 3,870 million by 2030 and register a CAGR of 13.5% during the forecast period of 2022 to 2030.
The global MCHP market is expected to grow substantially during the forecast period owing to the growing need for cost-efficient and competitive energy systems and a high focus on carbon reduction from power generating systems. High focus on carbon reduction from power generating systems is projected to drive industry growth.
Moreover, support from the government through incentives and subsidies is expected to create an opportunity for the players operating in the global micro combined heat and power market. However, challenges in implementing MCHP market projects due to lack of infrastructure are expected to restrain the growth of the global micro combined heat and power market during the forecast period.
The electricity demand has decreased considerably due to the pandemic, leading to a decreased demand from the commercial sector. As most countries were under lockdown, economic activities have come to a standstill, and only essential industries are operating, leading to a substantial decline in demand for electricity. Many countries worldwide were under lockdown in April 2020, and according to statistical data from the International Energy Agency (IEA), countries in full lockdown saw an average energy demand decline of 25%, while countries in partial lockdown witnessed an energy demand decline of 18%. The preliminary analysis of statistical data displays an increase in the share of renewable energy in the global energy mix. In contrast, the demand for electricity sources such as gas, coal, and nuclear has declined.
However, many countries have reopened part of their economies in the Q3-Q4 of FY2020, which is likely to positively impact the global energy & power industry.
MCHP systems are an integral part of energy systems and microgrids. An MCHP market system improves energy efficiency, facilitates the integration of renewable energy sources, reduces carbon emissions, lowers operating costs, and improves the reliability of critical infrastructure and the electric power system. Moreover, by generating heat and power simultaneously, MCHP can reduce carbon emissions by up to 30% compared to the separate means of conventional generation, which deploys boilers and power stations. For instance, as per Cogen Europe, MCHP, as an integral part of the entire CHP system, is likely to achieve carbon neutrality in Europe by 2050. Moreover, focusing on cogeneration for thermally generated heat and power in all sectors will maximize energy efficiency and integrate the European energy system at the lowest cost. All these factors are likely to drive the global micro combined heat and power market.
The governing authorities and companies across the world are focusing on the development of the installation of MCHP systems across the globe. Additionally, the high energy efficiency, high power to heat ratio, and low operation and maintenance costs also triggered the growth of the MCHP market. However, barriers such as interconnection, old infrastructure, standby rates, and strict regulations hinder the installation of MCHP systems in the global market. Interconnection refers to the process of the connection of MCHP systems to the transmission and distribution network grid. The unavailability of the proper interconnection standard makes the interconnection process very expensive and cumbersome. Furthermore, other permits and regulations, such as air emissions regulations, buildings permit, noise regulations, and carbon regulations, also hinder the growth of the MCHP market as it increases the overall project cost of the MCHP systems.
Governing authorities across the world are focusing on introducing out several programs, policies, and incentives for the development of MCHP systems. MCHP systems offer several advantages over other power generation sources, such as thermal, nuclear, solar, and wind. MCHP systems play an important role in meeting the demands of the electric and thermal loads of consumers. According to the US DOE, the Office of Energy Efficiency & Renewable Energy (US) announced an investment of USD 10 million in research and development for MCHP market systems to provide support to the electric grid in the US.
The up to 2 kW segment refers to MCHP plants that produce power below 2 KW. MCHP plants included in this segment have extensive applications in cogeneration. Some of the key MCHP market technologies covered in this segment are reciprocating engines. Key players in the global micro combined heat and power market have developed an MCHP plant that can be powered by various types of fuels, such as natural gas and biomass.
The 2 KW–10 KW segment refers to the MCHP plants with capacities between 2 kW and 10 kW. These plants use various types of technologies, such as turbines, reciprocating fuel cells. MCHP plants included in this segment have applications in power generation, cogeneration, and trigeneration. For instance, in the US, the base electrical load for the average home is approximately 2 kW, while the peak electrical demand is slightly over 4 kW.
The 10 KW–50 KW segment refers to MCHP plants that produce power between 10 KW and 50 KW. MCHPs included in this segment have extensive applications in cogeneration. These MCHP plants are generally used for electric and heat generation in commercial and residential areas. The different types of MCHP market technologies included in this segment are gas turbines, reciprocating engines, and steam turbines.
Natural gas is a naturally occurring fossil fuel found beneath the surface of the earth at varying depths. It primarily consists of methane with varying compositions of alkanes. The emissions produced from natural gas are lower as compared to other fossil fuels, including coal. Moreover, the rising environmental concerns over carbon emissions lead to the increasing adoption of natural gas as a fuel source to reduce the overall carbon footprint.
Coal is a combustible sedimentary rock that is usually brownish or black and contains high amounts of carbon and hydrocarbons. Different types of coal are classified based on the different levels of carbon, hydrogen, and oxygen in them. Coal as a fuel is the cheapest source of energy. It also provides a stable source of energy for power generation.
Renewable energy, often referred to as clean energy, comes from natural sources or processes that are constantly replenished. For example, sunlight or wind keep shining and blowing, even if their availability depends on time and weather. Renewable energy (including
biofuels but excluding hydro) rose by 9.7%, slower than the 10-year average (13.4% p.a.), but the increment in energy terms (2.9 EJ) was similar to increases seen in 2017, 2018, and 2019.
A micro-CHP boiler typically uses mains gas or LPG, so they are not considered a renewable energy source. However, due to their efficiency and productivity, they can significantly lower carbon dioxide emissions and are widely considered to be the future of domestic carbon emission depletion. They may in the future be able to utilize bio-oils, fuel cells, or other renewable energy sources. However, at present, the technologies that are currently ready for market deployment have been developed to use mains natural gas.
A Stirling engine operates via external combustion, all its heat flows in and out through the engine wall. The engine encloses a fixed quantity of permanently gaseous fluid such as helium or air. This operates by expanding and contracting the hot and cold gas, driving the pistons creating a mechanical cycle. There are two pistons involved: a 'Displacer piston' and a 'Working piston'. Performance and reliability are generally higher than internal combustion engines.
Internal Combustion (IC) engines are similar to vehicle engines modified to run on natural gas or compression-ignition diesel. These systems offer a mid-range performance of 20-40% electrical efficiency, but 1kW domestic models can only operate at a fixed output rather than following the demand of the property. The heat produced is usually hot water rather than steam. They generally produce 1 to 2 units of heat for each unit of electricity, with the ratio of heat to power generally decreasing with size.
Fuel cells use the electrochemical process, which converts the chemical energy stored in a fuel cell into electricity and water. The technology involved in fuel cells is entirely different from the others as electricity is generated without fuel combustion. The efficiency of fuel cells in MCHP systems is generally more than 80%. Fuel cell MCHP systems offer better advantages in terms of less noise and emissions than the other types of technologies used in MCHP market systems.
The residential segment includes infrastructure that is dependent on MCHP systems for electrical energy. Micro CHP for the residential is a relatively new technology. Until 2006, the economic viability of the available 'domestic' unit's payback period rendered the micro-CHP technology unfit for domestic use. The segment of micro combined heat and power market is further segmented into space heating/cooling, water heating, cooking, lighting, EV charging, and others.
Commercial refers to those buildings used for commercial purposes such as education facilities, government and office buildings, hospitals and medical centers, and hotels. The commercial segment includes infrastructures that are dependent on electricity and thermal energy. MCHP systems are utilized in commercial buildings for meeting the requirements of electrical loads. The commercial segment of micro combined heat and power market is categorized into educational institute, office buildings, healthcare buildings, others.
The global micro combined heat and power market has been segmented, on the basis of region, into North America, Europe, Asia-Pacific, Middle East & Africa, and South America.
North America comprises the US, Canada, and Mexico. It is one of the most prominent regions in the combined heat and power market, owing to an increase in the development of renewable energy sources and government initiatives to promote generating electricity via cogeneration or CHP. The commercial end users have been dominating the micro combined heat and power (MCHP) market in the region in the last five years, which is expected to dominate the micro combined heat and power market during the forecast period. For instance, in the US, California and Alaska have substantial installations of MCHP, which are expected to grow during the forecast period, primarily due to the rising demand for heat and power in the region.
Countries in Asia-Pacific are developing at a very fast rate in terms of manufacturing output and services offered. However, the growth has also increased the emission rates, and countries such as China and India are among the highest carbon-dioxide producer in the world. Some of the major factors expected to drive the growth of the micro combined heat and power (MCHP) market in Asia-Pacific include the growing demand for reduced carbon emissions and the increasing need for energy efficiency.
The global micro combined heat and power market is characterized by the presence of many local, regional, and global vendors. The market is highly competitive, with all the players continually competing to gain a larger market share. High competition, rapid advances in technology, frequent changes in government policies, and stringent environmental regulations are critical factors that could restrain the micro combined heat and power market growth. The vendors compete in terms of cost, product quality, reliability, and aftermarket services.
The prominent players in the global micro combined heat and power market are Honda India Power Products Ltd. (Japan), Vaillant Group (Germany), Yanmar Holdings Co. (Japan), Ceres Power Holdings Plc (UK), Qnergy (US), Aisin Corporation (Japan), BDR Thermea Group (Europe), Centrica Plc (Canada), Viessmann Group (Germany), Dantherm Power (Europe), Enginuity Power Systems (US), and Solid Power (US) among others.
The study covers the existing short-term and long-term market effects, helping decision-makers draft short-term and long-term plans for businesses by region. The report covers major regions in North America, Europe, Asia-Pacific, Middle East & Africa, and South America. The report analyzes market drivers, restraints, opportunities, challenges, Porter's Five Forces, value chain, and impact of COVID-19 on the micro combined heat and power market.
Global Micro Combined Heat and Power Market Overview by Capacity
Global Micro Combined Heat and Power Market Overview by Fuel
Global Micro Combined Heat and Power Market Overview by Prime Mover
Global Micro Combined Heat and Power Market Overview by Application
Global MCHP Market, by Region
|Market Size||2030: USD 3,870 Million|
|Historical Data||2019 & 2020|
|Forecast Units||Value (USD Million)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends|
|Segments Covered||Capacity, Fuel, Prime Mover, Application, and Region|
|Geographies Covered||North America, Europe, Asia-Pacific, Middle East & Africa, South America|
|Key Vendors||Honda India Power Products Ltd. (Japan), Vaillant Group (Germany), Yanmar Holdings Co. (Japan), Ceres Power Holdings Plc (UK), Qnergy (US), Aisin Corporation (Japan), BDR Thermea Group (Europe), Centrica Plc (Canada), Viessmann Group (Germany), Dantherm Power (Europe), Enginuity Power Systems (US), and Solid Power (US)|
|Key Market Opportunities||• Support from governments through incentives and subsidies|
|Key Market Drivers||• Need for cost-efficient and competitive energy systems • High focus on carbon reduction from power generating systems|
The worldwide MCPH market is expected to thrive at about 13.5% CAGR through the review period. It is because of the high rate of adoption MCPH to settle the surge in industrial and domestic heat and electricity requirements.
Vaillant Group (Germany), Honda Power (Japan), Ceres Power Holdings PLC (U.K), Yanmar Holdings Co. Ltd. (Japan), Aisin Group (Japan), Qnergy (U.S.), Centrica plc (U.K), and BDR Thermea Group (U.K) are some potential key players of the global MCHP market.
Internal combustion engine, Rankine cycle engine, PEMFC, SOFC, and stirling engine are technologies that are deployed in MCPH. All these technologies enable about 80% utilization of fuel to meet the rising thermal and electricity demands. The stirling engine technology is observed to hold high traction.
MCHP are observed as an effective solution to the surging residential and non-residential thermal demands. Industrial heat power requirements are increasing. Meanwhile, the need to reduce carbon footprint is significant. Thus, MCPH are adopted across different sectors. In addition, residential applications of MCPH is also noted to increase due to the increase in the expansion of the global population base. These are identified as potential growth inducers of the MCPH market.
The next-generation power solution that is a small size cogeneration plant, is defined as micro combined heat and power (MCHP). They are used to generate and supply heat and electricity with a high degree of productivity and minimal carbon efficacy.