District Heating Market Size By Source (CHP, Geothermal, Solar, Heat Only Boilers), By Application (Residential, Commercial/Institutional (College/University, Office, Government/Military), Industrial (Chemical, Refinery, Paper)), Industry Analysis Report, Regional Outlook (U.S., Canada, Germany, Poland, Russia, Sweden, Finland, Italy, Denmark, UK, China, Japan, South Korea), Price Trends, Competitive Market Share & Forecast, 2017 – 2024

Industry Trends

District Heating Market size for 2016 was valued over USD 200 billion and is set to exceed 17 thousand PJ by 2024.
 

Europe District Heating Market Size, By Source, 2016

 

Directives to monitor carbon emissions coupled with growing concerns toward recycling waste energies will stimulate the global district heating market size. In 2015, the U.S. Environmental Protection Agency released a Carbon Pollution Standard under the Clean Air Act to monitor and check carbon and Sulphur emissions across the region. As per European Union, conventional boilers produce over 260 kg CO₂ per kWh operating on natural gas whereas district heating from CHP sources emits only 100 kg CO₂ per kWh working on the same fuel.
 

Rising energy demand along with rapid urbanization and industrialization will boost the global district heating market growth. Improved air quality, low heat loses and sustainable energy usage are some of the advantages of these systems over other available alternatives. As per the United Nations, 54% of the world population moved to urban areas which is projected to surge to 66% by 2050.
 

Ease of parity with various heat sources including CHP and geothermal will foster the district heating market share. Increasing use of waste as fuel coupled with government subsidies and power taxes will further complement the industry growth. These initiatives will help the operators to effectively run the system at higher capacity by limiting the overall operational cost. In 2015, the UK government introduced Heat Networks Investments Program to support 200 new district heating networks in England and Wales with a total funding of USD 372 million by 2020.
 

District Heating Market, By Source

CHP district heating market size is projected to witness growth over 3% by 2024. Low carbon emissions, feasible operating costs and convenient distribution networks are some of the key features which makes it preferable among other counterparts. Improved generation efficiency with high production capabilities may further boost the industry size. In 2017, Noeul Green Energy completed the development of a 20 MW CHP plant with a view to provide district heat to industrial and commercial consumers
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Geothermal source accounted for over 6% of the global market share in 2016. Economic feasibility, cost competitiveness and low dependency on conventional fuel may further stimulate the industry landscape. In 2017, Italy based Enel Green Power announced the development of geothermal based district heating system in Tuscany to serve the nearby industrial consumers.

District Heating Market, By Application

Residential district heating market is anticipated to grow over 3% by 2024. France has over 500 of these systems from which residential accounts for over 60% of the total installation. In 2014, the government of Denmark had amended the Heating Supply Act under a mandate to replace conventional electric heating structures with advance DH systems in new buildings. As per Danish Energy Agency, over 63% of all residential houses were connected to these systems in 2014.
 

Industrial district heating market for 2016 was valued over USD 60 billion. Low transmission losses and gas leak safety are some of the key factors which will boost the product demand. In 2015, the European Union reported that over 30% of Finland’s total industrial heating was derived from these systems in the last five-year period.

District Heating Market, By Region

U.S. district heating market size for 2016 was valued over USD 20 billion and is predicted to witness strong growth owing to rising heating demand across residential and industrial consumers. The Federal Government target to increase CHP, stringent regulations to reduce carbon emissions and favorable state incentives to stimulate the business growth.
 

Stringent government norms towards building energy efficiency through deployment of sustainable technologies will positively drive the Russia market. Rising need to renovate and modernize existing heating systems to reduce the energy loss will further complement the business landscape. The country, with respect to its 1990 scenario, adopted a domestic GHG emissions target to curb up to 75% carbon emission level by 2020.
 

China market in 2016 accounted for over 10% of the global industry share. The Ministry of Housing and Urban-Rural Development plan to enlarge the indoor heating zone including upper belt of Southern China, where the temperature fall below 5⁰C in humid and cold winter days. In 2016, World bank approved USD 100 million loan towards the development of clean heating project in Hebai province of China.

Competitive Market Share

Notable companies operating in the district heating industry include Statkraft, Shinryo Corporation, Ramboll, Goteborg Energi, STEAG, NRG Energy, Dong Energy, Vattenfall, Logstor, KDHC, Keppel DHCS, RWE AG, Kelag Warme, Hafslund ASA and Fortum.
 

In June 2016, Fortum established the foundation stone to build its new multifuel CHP plant in Zabrze to increase its heat generation capacity to 145 MW and deliver to households in Zabrze and Bytom cities of Poland.
 

District Heating Industry Background
 

These systems involve heat supply from single generating source to a large group of residential, commercial and industrial buildings. The heat is generated mainly through combined heat and power (CHP), geothermal and other sources. CHP is integrated with available energy systems to deliver improved energy efficiency, reliability, flexibility, safety of operations and environmental benefits. Favorable government policies to encourage adoption of sustainable energy along with growing measures towards energy conservation will positively drive the district heating market growth.
 

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