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The Combined Heat & Power (CHP) market accounted for USD 98 billion revenue in 2022, 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.
The residential district heating market held over USD 65 billion revenue in 2022, 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.
The Europe district heating market will reach 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.