Combined Heat and Power (CHP) Market Analysis

Combined Heat and Power Market Analysis

Natural gas fuel segment in the combined heat and power market is anticipated to reach USD 11.5 billion by 2028. Natural gas is the most preferred fuel in the CHP technology. Its price is expected to gain competence compared to other alternatives on account of its high efficiency, increased production across the globe, and significantly low carbon emissions. Governments across the globe are trying to increase the share of cleaner fuels in their energy mix, which in turn, will impel the demand for natural gas over the coming years. In addition, stringent governmental regulations and targets for carbon emission will oblige policymakers to introduce cleaner fuels including natural gas, which in turn, will propel the share of natural gas as a fuel in the market.
 

Lower emission rates along with cost competitiveness compared to its counterparts will stimulate the acceptance of this technology. The soaring adoption of gas technologies across developed economies impelled by the rising concerns pertaining to the rapid depletion of conventional resources will drive the industry landscape. Additionally, the rising global energy demand will force regulators to enhance the production of natural gas, which in turn, will proliferate the market expansion.
 

The combined heat and power market share from commercial sector is poised to showcase a substantial gains during the forecast period. This growth is attributed to the ongoing fund inflows by respective governments for the development of various commercial establishments including offices, educational institutes, hospitals, and others. District heating or cooling is also gaining wide recognition across developed countries due to increasing space heating/cooling demand together with the technology’s high energy efficiency, reliability & lower overall costs, in turn, complementing CHP technology penetration. Moreover, ongoing investments in green buildings owing to strict building emission norms will further impel commercial segment growth in the coming years.
 

The CHP market for 1 kW – 0.5 MW capacity segment is estimated to attain a 9.7% growth rate till 2028. Low-capacity systems are primarily deployed coupled with biomass fuel across small residential and commercial establishments including restaurants, small-scale industries, and office buildings, amongst others. High energy efficiency and low operating costs are a few factors that complement the adoption of low-capacity CHP systems across different establishments.
 

Furthermore, the expanding residential and commercial sectors coupled with an increasing demand for reliable & uninterrupted electricity supply have eventually influenced the industry growth. Ongoing technological advancements including co-generation and tri-generation technologies further provide ample support to cater to heating & cooling demands in the industry landscape.
 

The steam turbines technology in the combined heat and power market is slated to witness considerable growth during the forecast timeframe, attributed to its high reliability, smooth operations, and a very long operational life compared to other alternatives. These units are usually available in the range of 0.5 MW to several hundred MW and thus can be used for applications ranging from small industries to utilities. Additionally, the requirement of low mass flow rates, lower vibrations, high power-to-weight ratio, and high thermal efficiency compared to other alternatives are a few key advantages offered by steam turbines, making them suitable for use in combined heat & power systems.
 

The North America combined heat and power market is expected to register USD 2.4 billion revenue through 2028. Governments across the region have set strict carbon emission targets owing to which these countries are reducing their reliance on coal-powered power plants and introducing cleaner fuels to their energy mix.
 

A burgeoning energy demand along with the deployment of gas-based technology across these countries will accelerate the business landscape. In addition, extreme climatic conditions across Canada and a few U.S. states including Alaska will fuel the demand for energy-efficient & reliable space heating technologies, which in turn, will spur the CHP market progression in the region.