ID: MRFR/E&P/0603-CR | September 2021 | Region: Global | 119 pages
A combined heat and power (MCHP) system, also known as micro generation, generates electricity and thermal energy simultaneously from a single fuel source for individual houses, residential buildings, and some commercial offices. Such a system is installed to reduce carbon emissions and fuel costs. MCHP generally operates in applications having up to 50 kW of power capacity. MCHP systems are located at or near the end-use site. MCHP systems have applications in residential and commercial sectors.
Bycapacity, the micro combined heat and power market has been segmented into up to 2 kW, 2 kW to 10 kW, and 10 kW to 50 kW. The up to 2 kW segment accounted for the largest share of 46.7% in the micro combined heat and power market. Based on prime mover, the micro combined heat and powermarket has been segmented intoStirling engine, internal combustion engine, and fuel cell.The Stirling engine segment accounted for the largest share of 46.7% of the global market. Based on application, the micro combined heat and powermarket has been segmented into residential and commercial. The residential segment accounted for the larger share of 61.3% of the global market. Based on fuel, the micro combined heat and power market has been segmented into natural gas & LPG, renewables resources, coal, and oil. The natural gas segment accounted for the largest share of 64.9% of the global market.
COVID-19 has led to severe impact across all the industries around the world. The pandemic has induced a steep decline in the global demand for MCHP systems, especially in economies with complete lockdowns. As these are used in utilities, commercial, water & wastewater treatment, and many other essential industries, manufacturers are facing supply chain disruption in the supply of MCHP systems. However, the market has witnessed a steep decline from the residential and commercial sectors due to the decline in global energy demand. Furthermore,key global companies in the MCHP market are facing a slowdown due to COVID-19 and are unable to initiate projects and execute product developments. However, as many economies have resumed economic activities, the demand for MCHP systems is expected to gradually increase by the first and second quarters of FY2021.
Cost-effective energy efficiency refers to the use of lesser energy required to perform a function with a minimum possible cost, thus, in turn, reducing energy waste and pollution.Energy efficiency has a tremendous potential to boost the country's economic growth and reduce greenhouse gas emissions. Moreover, consumers in the global market are also focusing on using efficient energy generation sources to lower energy costs and prevent pollution. The increasing demand for energy in residential and commercial sectors has increased the generation of electricity from sources such as coal, natural gas, and oil. For instance, as per the statistical data of the BP Statistical Review of World Energy Report 2020, the global amount of electricity generated using natural gas as a fuel rose to 27,004.7 Terawatt-hours (TWh) in 2019 compared to 26,652.7 TWh 2018. Moreover, as per the US Energy Information Administration (EIA), in 2018, the amount of energy consumption in the US by end-use sectors such as residential and commercial are around 15.68% and 12.38%, respectively. However, energy generation sources such as thermal power plants, solar energy, and wind energy are low compared to MCHP systems.
The governing authoritiesand companies across the world are focusing on the development of the 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 systems in the global market. However, barriers such as inter connection, old infrastructure, standby rates, and strict regulations hinder the installation of MCHP systems. 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.
Governing authorities across the world are focusing on introducing several programs, policies, and incentives for developing MCHP systems. MCHP systems offer several advantages over other power generation sources, such as thermal, nuclear, solar, and wind. MCHP systems play an essential 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 systems to provide support to the electric grid in the US. Moreover, many utilities in several countries are encouraging stakeholders and consumers to promote and install MCHP systems globally.
The up to 2 kW segment covers MCHP plants that produce power below 2 kW. The MCHP plants included in this segment have extensive applications in cogeneration. Some of the key MCHP technologies covered in this segment are reciprocating engines. Key players in the global 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 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 different 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. As per statistical data from the BP Statistical Review of World Energy 2021, electricity generation from natural gas fell 81 billion cubic meters (bcm) or 2.3% in 2020. LNG supply grew by fourbcm or 0.6% in 2020.
Coal is a combustible sedimentary rock, usually brownish or black, containing 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. As per the BP Statistical Review of World Energy Report 2021, coal as a fuel source fell by 6.2 exajoules (EJ), or 4.2%, by the end of 2020. Such factors are expected to drive the adoption of coal as a fuel in the global micro combined heat and power market. Furthermore, oil as a fuel source also includes diesel and distillate fuel oil.
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%, which is slower than the ten-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 usually uses mains gas or LPG, so itis not considered as a renewable energy source. However, due to its efficiency and productivity, it cansignificantly reduce carbon dioxide emissions and are widely considered 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. Microturbines can burn various fuels, making them useful for resource recovery applications, including landfill gas, digester gas, oil and gas field pumping, and coal mine methane use. Microturbines are available from 30 to 50 kW with integrated modular packages.
By Prime Mover:
A Stirlingengine operates via external combustion, where in 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. It operates by expanding and contracting the hot and cold gas, driving the pistonsand 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. However, the domestic systems currently available have an extremely low efficiency of between 6-8%, so there is a chance that they could increase CO2 emissions in the UK if replacing a high-efficiency condensing boiler.
Internal Combustion (IC) engines are similar to engines that are modified to run on natural gas or compression-ignition diesel. These systems mainly use spark-ignition engines to provide motive power. They 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 usually produce 1 to 2 units of heat for each unit of electricity, with the ratio of heat to power generally decreasing with size. These MCHP systems are best suited for smaller sites where the electricity demand is reduced, and the requirement for heat and hot water is high.
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 cells are characterized based on electrochemical processes, such as proton exchange membrane and solid oxide. Fuel cell MCHP systems offer better advantages in terms of less noise and emissions than the other types of technologies used in MCHP systems. They offer significantly higher electrical efficiencies (30–45%) and good transient performance, which promises the potential to deliver benefits for residential energy production. If fueled on pure hydrogen, they produce no CO2 at all. Fuel cells produce electricity through a silent electrochemical reaction, generating it considerably more efficiently than the other methods on the market currently.
The residential segment includes infrastructure that is dependent on MCHP systems for electrical energy. MicroCHP 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. However, this is all expected to change in the very near future, with many competitively priced units preparing to be released to the wholesale market.
Commercial refers to those buildings used for commercial purposes such as education facilities, government, and office buildings, hospitals & 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. As the demand for commercial buildings is growing, the commercial sector is expected to grow at a steady rate during the forecast period. But electricity consumption is estimated to have experienced a minor fall across the main components of final energy demand, declining by just 0.9% in 2020. The relative resilience of electricity usage was aided by the nature of the lockdowns, with falling power demand in industry and commercial buildings partially offset by increased domestic use by home-based workers and locked-down.
North America 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 market in the region in the last five years, which is expected to dominate the market during the forecast period. For instance, the US, California, and Alaska have witnessed 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.
The growing demand for renewable energy sources and the developments in the energy sector to reduce carbon emission drive the growth of the micro combined heat and power market in the region. Countries in Europe have adopted many strategies to reduce carbon emissions. One of the majorstrategies adopted is increasing the use of natural gas instead of coal for electricity generation. Europe, in comparison to other regions, has a lower availability of natural resources. Thus, countries in the region are adopting the latest technologies to improve production efficiency.
Countries in Asia-Pacific are developing at a rapid 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 carbondioxide producer in the world. Some of the major factors expected to drive the growth of the micro combined heat and power marketin Asia-Pacific include the growing demand for reduced carbon emissions andthe increasing need for energy efficiency.
The Middle East & Africa is one of the prominent regions for producing natural gas in the world. The growing demand for the exploration and productionof oil and gas, rising electricity demand, and the development of CHP plants drive the growth of the CHP in this region. Many regional stakeholders engaged in the business of oil & gas and power & heat generation are focusing on increasing developments in the countries across the Middle East & Africa.
South America is an ever-growing market owing to the growing number of applications of MCHP systems in commercial and other sectors in the region. The authorities and the companies in the region focus on the research & development of MCHP systems and fuel cells. Moreover, the growing production and consumption of natural gas, biomass, and oil and gas have fueled the growth of the installation of MCHP plants in the region. This has led to an increase in demand for MCHP systems in the region.
The micro combined heat and powermarketis characterized by the presence of many local, regional, and international vendors. The global market is highly competitive, with all the players continually competing to gain a larger market share.
Honda India Power Products Ltd. (HIPP) (formerly known as Honda Siel Power Products Ltd.) has been a leader in the power products industry for over three decades. It is engaged in the manufacturing and marketing of portable generators, water pumps, tillers, and general-purpose engines in India and abroad. Honda Motor Company, the parent company of Honda India Power Products Ltd,has been the world's largest motorcycle manufacturer since 1959 and the largest manufacturer of internal combustion engines measured by volume, producing more than 14 million internal combustion engines each year.
The prominent players operating in the global micro combined heat and powermarketareHonda Power (Japan), Vaillant Group (Germany), Yanmar Holdings Co. (Japan), Ceres Power Holdings Plc (UK), Qnergy (US), Aisin Corporation (Japan), BDR Thermea Group (Netherlands), Centria Plc (US), Viessmann Group (Germany), Dantherm Power (Denmark), Enginuity Power Systems (US), and Solid Power (US).
|Market Size||2028: Significant Value|
|Forecast Units||Value (USD Million)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends|
|Segments Covered||Capacity, Prime Mover, Application|
|Geographies Covered||North America, Europe, Asia-Pacific, and Rest of the World (RoW)|
|Key Vendors||Honda Power (Japan), Vaillant Group (Germany), Yanmar Holdings Co. Ltd. (Japan), Ceres Power Holdings PLC (U.K), Qnergy (U.S.), Aisin Group (Japan), BDR Thermea Group (U.K), Centrica plc (U.K), Mondragon Corporation (Spain), Viessmann Group (Germany), Dantherm Power (Denmark), Nucusa Energy (U.S.), and Solid Power (U.S.).|
|Key Market Opportunities||New product launches and R&D Amongst major key Players|
|Key Market Drivers||Increased focus on advanced methods of power generation|
Frequently Asked Questions (FAQ) :
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.
The worldwide MCPH market is expected to thrive at about 15.5% 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.
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.
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.