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, Slovakia, Austria, Czech Republic, France, China, Japan, South Korea), Price Trends, Competitive Market Share & Forecast, 2018 – 2024

Industry Trends

District Heating Market size was valued over USD 180 billion in 2017 and is anticipated to exceed an annual installation of 19,000 PJ by 2024.
 

Denmark District Heating Market Size, By Source, 2017 & 2024 (USD Billion)

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Global district heating market is set to witness growth on account of stringent legislative directives to reduce GHG emissions along with growing concerns over recycling of waste energies. In 2015, the U.S. EPA imposed a standard for carbon pollution under the Clean Air Act toward monitoring and control of sulphur & carbon emissions across the country. These regulations will compel the consumers to move toward an energy efficient alternative. According to a government agency, traditional boilers emit over 260 kg of CO₂ per kWh using natural gas as fuel whereas the CHP based district heating produces approximately 100 kg of CO₂ per kWh on the same fuel.
 

Rapid industrialization and urbanization in conjunction with rising global energy demand will drive the global market size. As per United Nations’ 2017 statistics, the urban population constituted over 55% of the world’s population and is predicted to reach 68% by 2050. Lower thermal losses, better quality of air and sustainability, are some of the key advantages possessed by DH systems which makes product adoption preferable over available alternatives.
 

Technological advancement, reduced prices, government subsidies and growing focus toward waste to energy will augment the global market size. For instance, the UK government, in 2015 introduced the Heat Networks Investment Program (HNIP) to provide fiscal support to over 200 district heating networks across Wales and England with a funding of over USD 300 million by 2020. In addition, the ability of district heating systems to offer relatively lower operational costs while providing higher efficiency and better capacity utilization will significantly strengthen their demand across the industry landscape.

District Heating Market, By Source

CHP district heating market is set to expand over 4% by 2024. Feasible operation costs, effective distribution networks and low CO₂ emissions are some of the factors that will drive the industry. Improved production capabilities and higher operational efficiency may further complement the industry growth. In 2017, Noeul Green Energy constructed a 20 MW fuel cell park in South Korea with an aim to cater to the district heating demand of the commercial and industrial consumers.
 

Geothermal source, in 2017 held over 5% of the global district heating market share. Cost competitiveness, economic feasibility, and modest reliability on fossil fuel is set to drive the industry. In 2017, Enel Green Power announced the installation of geothermal based DH system to serve the industrial consumers across Italy.
 

District Heating Market, By Application

Residential district heating market is set to witness a growth of over 4% by 2024. More than 500 district heating systems are installed in France, accounting more than 60% share for residential application. In 2014, Denmark government had introduced the Heating Supply Act, under which it has been made mandatory to substitute the traditional electric heating system with new district heating systems in new infrastructures and buildings. According to Danish Energy Agency, more than 63% of the residential consumers employed district heating in Denmark in 2017.
 

Industrial district heating market is projected to grow on account of minimal conveyance losses and operational safety related to gas leakage. As per the EU, more than 30% of the total Finland’s industrial thermal demand for space heating was derived from district heating from the period of 2010 to 2015.
 

District Heating Market, By Region

The U.S. accounted for more than 90% of the North America market share in 2017. Substantial growth is anticipated across the country on account of increasing demand for heating, government initiatives to promote green & efficient technologies and stiff laws to reduce CO₂ emissions. The federal government’s target to enhance the CHP installations will further drive the district heating market growth.
 

France market is anticipated to grow over 2% by 2024. Regulatory measures toward the adoption of energy efficient solutions with an objective to minimize carbon footprint will drive the industry growth. In August 2015, the Government of France introduced the Energy Transition for Green Growth Act to reduce GHG emissions by 40% till 2030 from the 1990 levels, and 30% reduction in fossil fuel consumption by 2030 as compared to 2012 levels.
 

Competitive Market Share

Key participants of the district heating market include Fortum, Statkraft, Logstor, Shinryo Corporation, Dong Energy, Ramboll, STEAG, NRG Energy, Goteborg Energi, Vattenfall, KDHC, RWE AGKeppel DHCS, Kelag Warme and Hafslund.
 

The foundation stone of an added multi-fuel CHP plant was established in June 2016, by Fortum in Zabrze, Poland to increase the existing capacity to 145 mega Watt and serve the consumers across Bytom and Zabrze.
 

District Heating Industry Background
 

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The district heating system generates thermal energy from one source and supply it to multiple consumers across commercial, industrial and residential buildings. The energy is primarily produced through sources including geothermal, CHP solar. CHP is combined with the existing heating systems for an improved operational efficiency, flexibility, reliability and ecological benefits. The district heating market is further expected to be driven by the energy efficiency & conservation initiatives led by different governments globally, along with the favorable policies and regulations for the espousal of sustainable options in energy.

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