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District Heating Market Size - By Source (CHP, Geothermal, Solar, Heat Only Boilers), By Application (Residential, Commercial {College/University, Office, Government/Military}, Industrial {Chemical, Refinery, Paper}) & Global Forecast, 2024 – 2032

  • Report ID: GMI1401
  • Published Date: May 2023
  • Report Format: PDF

District Heating Market Size

District Heating Market size was valued at USD 181 billion in 2023 and is anticipated to witness over 6% CAGR from 2024 to 2032. Increasing demand for renewable energy sources including biomass, solar and geothermal energy for heating applications will propel the industry growth. The district heating systems distributes heat generated in a centralized plant through district heating pipeline network to meet the building heating requirements. Low dependency on fossil fuels along with minimum impact on environment will augment the product demand. Moreover, increasing concerns toward recycling waste energy coupled with ongoing government subsidies, and incentives will complement the business scenario.
 

District Heating Market

Stringent regulatory norms to reduce carbon emissions and climate change along with continuing plans toward energy efficiency will boost the industry revenue. Ongoing government and private spending toward development of sustainable solutions coupled with promising policies toward clean energy sources will positively influence the business dynamics. In addition, the maintenance and replacement of conventional power plants with sustainable power generating systems will complement the industry outlook.

 

COVID-19 Impact

Delay in several infrastructural projects along with temporary shutdown of industrial facilities led to decline in the overall district heating market growth. The pandemic has led to a decrease in energy demand as commercial and industrial activities were temporarily shut down. This has resulted in a decline in heating demand, affecting the revenue of various companies. Moreover, decline in investments for new projects due to economic uncertainty along with supply chain disruptions due to pandemic significantly impacted the market size. However, robust investments toward renewable capacity additions along with increasing demand for heating will boost the industry potential.

 

District Heating Market Analysis 

District Heating Market Size, By Source

The Combined Heat & Power (CHP) market accounted for over USD 102 Billion in 2023, on account of its cost effectiveness and high sustainability. Increasing utilization of waste heat along with enhanced energy supply efficiency will spur the industry demand. Moreover, the increasing demand for low carbon renewable energy sources along with its low cost will enhance the market demand. Additionally, shifting trends toward sustainable electricity and heat supply in line with policy targets to meet energy efficiency will boost the adoption of cogen technology in the district heating industry.

Solar district heating market size will significantly grow during the forecst period, due to its cost competitiveness high efficiency and low environmental impact. Strict regulatory norms toward zero emission buildings in line with the adoption of energy efficient and sustainable heating sources will support the business spectrum. Additionally, the ongoing integration of these systems with other renewable technologies such as biomass boilers or geothermal heat pumps will augment the business outlook. Moreover, deployment of advanced control systems to optimize the performance and to monitor weather conditions, energy demand, and energy prices to ensure that the system is operating at maximum efficiency will impel the business spectrum.
 

Asia Pacific District Heating Market Size By Application

The residential district heating market held over USD 68 Billion revenue in 2023, owing to the robust investments across the real estate sector along with increasing adoption of small-scale systems utilizing biomass as the primary fuel. Growing urban population coupled with wide applicability of decentralized generation will positively complement the market share. For instance, as per the World Bank the urban population reached around 56% in 2022 and is anticipated to reach 70% by 2050. Moreover, the increasing investments toward development of households in rural areas along with ongoing innovations toward product design and development will foster the product demand.
 

Rapid urbanization and industrialization along with increased investment in developing new production units and facilities will increase the demand for district heating systems across commercial establishments. The government's stringent emission reduction standards for various developers and the subsequent increase in investment in effective and sustainable technology development will continue to garner the district heating market growth. In addition, the introduction of stringent building emission regulations and the continued use of environmentally friendly building construction will facilitate the penetration of our products into commercial applications.
 

 Europe District Heating Market Size,

The Europe district heating market will reach over USD 115 billion by 2032.. The European countries lead the development of DH with respect to the installation of these systems across Germany, France, Italy, and Russia when compared to another region. For instance, around 79% of the district heating consumption comes from Russia. The key reason behind the increasing demand is the rising infrastructural spending and the growing residential and service sectors. Over the years, the European market growth is on account of favorable regulatory policies and government funded programmes toward development of DH network. Along with the ongoing R&D activities and stringent regulatory framework for carbon emissions, it can be expected that the industry effectively will further grow in the region.

 

District Heating Market Share

Some of the leading companies involved in the district heating market include:

  • Vattenfall 
  • Statkraft 
  • Fortum 
  • STEAG 
  • Goteborg Energi 
  • Shinryo Corporation 
  • RWE 
  • NRG Energy 
  • Korea District Heating Corporation 
  • Ørsted 
  • Ramboll Group A/S 
  • LOGSTOR A/S 
  • Hafslund 
  • Kelag Warme GmbH 
  • Keppel DHCS Pte Ltd.

New product innovations, inorganic growth ventures, mergers, and collaborations between players across the industry has been a key inference for the expansion.
 

District Heating Industry News

  • In August 2021, Fortum established a carbon neutral district heating network in Espoo. Fortum diverted the waste heat from the data processing center to the district heating network. Its waste heat is converted into thermal power that will facilitate heat to residential areas. In addition, this project will replace the existing two CHP plants operated by Fortum, one is a combined cycle-gas turbine, and the other is a coal-burning steam turbine.
     
  • In December 2021, Vattenfall launched the pilot data project to supply sustainable computing capacity. This new project is provided with the direct use of heat, Artificial Intelligence (AI), high-performance computing applications, and operated to offer high-performance security in the district heating plant for sustainability. Vattenfall offers the structure and the cloud & heat technology and a secured space to run the operation.
     

This district heating market research report includes in-depth coverage of the industry with estimates & forecast in terms of ‘PJ’ & USD’ from 2019 to 2032 for the following segments:

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Market, By Source

  • CHP
  • Geothermal
  • Solar
  • Heat-only boilers
  • Others

Market, By Application

  • Residential
  • Commercial
    • College/University
    • Office
    • Government/Military
    • Others
  • Industrial
    • Chemical
    • Refinery
    • Paper
    • Others

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • Poland
    • Russia
    • Sweden
    • Finland
    • Italy
    • Denmark
    • UK
    • Slovakia
    • Austria
    • Czech Republic
    • France
  • Asia Pacific
    • China
    • Japan
    • South Korea
       
Authors: Ankit Gupta, Abhishek Chopra

Frequently Asked Questions (FAQ) :

The market size of district heating was worth USD 181 billion in 2023 and will reach over USD 303 billion by 2032, says this GMI report

Combined heat & power (CHP) market was valued at USD 102 billion in 2023, owing to its cost-effectiveness and high sustainability.

The Europe market size will exceed USD 115 billion by 2032, due to increasing infrastructural spending and the growing residential and service sectors.

Vattenfall, Statkraft, Fortum, STEAG, RWE, NRG Energy, Ørsted, Hafslund, Kelag Warme GmbH, and Keppel DHCS Pte Ltd are some of the major companies in the market.

District Heating Market Scope

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Premium Report Details

  • Base Year: 2023
  • Companies covered: 15
  • Tables & Figures: 731
  • Countries covered: 17
  • Pages: 250
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