Combined Heat and Power (CHP) Market Analysis APAC, Europe, North America, South America, Middle East and Africa - US, China, India, Japan, Germany - Size and Forecast 2024-2028

Combined Heat and Power Market Size 2024-2028

The combined heat and power market size is forecast to increase by USD 9.35 billion and is estimated to grow at a CAGR of 6.29% between 2023 and 2028.  The market growth analysis report underscores the pivotal role of the surging global energy consumption in driving market expansion. Factors like the electrification of heating and transport, digitalization of economies, and increasing income levels are fueling the escalating demand for energy worldwide. Notably, China and India are anticipated to make substantial contributions to this growth trajectory. However, the market faces challenges, including the high costs associated with combined heat and power units and non-economic barriers hindering the uptake of such systems. Additionally, the lack of standards in combined heat and power systems poses a significant obstacle. Navigating these challenges demands strategic initiatives aimed at addressing cost concerns, overcoming non-economic barriers, and establishing standardized practices to foster the widespread adoption of combined heat and power systems.

Concurrently, the integration of renewable heat sources and energy efficiency measures is shaping market trends. Combined heat and power integrated with smart grid technologies offer opportunities for enhanced efficiency and cost savings. This integration optimizes distributed energy resources, improves system performance, and actively manages electricity generation and consumption, fostering sustainable energy practices and driving market growth and district heating during the forecast period.

For More Highlights About this Report, Download Free Sample in a Minute 

Key Market Segments

Cogeneration technology, also known as combined heat and power (CHP), maximizes energy efficiency by simultaneously producing electricity and capturing waste heat for various applications. Heat recovery systems play a crucial role in this process, extracting and repurposing thermal energy that would otherwise go to waste. Through distributed energy generation, CHP systems provide reliable and sustainable power to localized areas. Additionally, district heating and cooling networks further optimize thermal energy utilization, reducing overall energy-consumption and greenhouse gas emissions. Embracing these energy efficiency solutions facilitates seamless integration of renewable-energy sources, driving towards a more sustainable and resilient energy future.

By Product

The natural gas segment is estimated to witness significant growth during the forecast period. Combined heat and power technology, also referred to as cogeneration, allows the simultaneous generation of electricity and useful heat from a single fuel source. In addition, natural gas is a popular choice for combined heat and power systems due to its clean-burning properties, efficiency, and availability. Furthermore, one of the key advantages of the natural gas segment in the market is its environmental friendliness due to it's positive environmental impact.

 

 

 

Get a glance at the market contribution of various segments Download the PDF Sample

Moreover, natural gas combustion emits fewer GHGs and air pollutants compared to other fossil fuels, making it a more sustainable option. In addition, the market has witnessed significant growth in recent years, and the natural gas segment is a major contributor to this expansion. Furthermore, several industries, including manufacturing, healthcare, residential buildings, and commercial sectors, are increasingly adopting natural gas combined heat and power systems to meet their energy needs. In addition, these systems offer a reliable source of electricity and provide thermal-energy for various processes, such as space heating, water heating, and industrial applications. Hence, such factors are fuelling the growth of this segment which in turn drives the market growth during the forecast period.

Market Regional Analysis

For more insights on the market share of various regions Download PDF Sample now!

APAC is estimated to contribute 52% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. One of the main factors that is contributing to the market growth in APAC is the favorable government initiatives to boost the adoption of combined heat and power. For example, since 2012, the feed-in tariff mechanism has been prevalent in Japan, wherein preferable tax treatments and certain subsidies are available for combined heat and power. In addition, as per the  NDRC Energy 565/NEA Electricity 42 policy introduced in March 2016 in China, combined heat and power for residential heating and power is exempted from the restrictions on new coal-fired power generation capacity. Therefore, such government initiatives are positively impacting the market in the region. Therefore, it is expected to drive market growth in APAC during the forecast period.

Market Dynamics and Customer Landscape

The market thrives with increasing global energy-consumption, driving the integration of renewable-energy and enhancing energy efficiency. Distributed energy-generation and thermal efficiency, facilitated by power plant technology like gas turbines and boiler systems, contribute to energy savings and sustainable practices. Heat recovery in CHP systems maximizes electricity generation while providing district heating solutions for industrial applications.

Despite challenges, including non-economic barriers, microgrid solutions are gaining traction, offering flexibility and resilience. CHP's role in sustainable energy is further underscored by its ability to optimize-energy use and reduce carbon emissions with carbon dioxide, positioning it as a key player in the transition towards a more sustainable-energy landscape.

Key Market Driver

One of the key factors driving the market growth is the increase in the consumption of energy globally. As per the IEA, as of 2017, the global economy grew at an average rate of 3.4% per year, which, in turn, increased the energy-demand. For example, global energy-demand increased by 2.1% in 2017 compared with 2016 and is further expected to rise by more than 25% by 2040. Therefore, such growth in global energy demand will be fueled by China and India, thereby contributing to more than 40% of this growth.

Moreover, factors such as the electrification of heating and transport, the rise in the number of connected devices in the residential and commercial sectors, and the digitalization of modern economies have been fuelling the electrification of the global energy system. In addition, the demand for energy-services such as air conditioning is expected to rise in households in tandem with the growth in income levels. Furthermore, the use of electric motor systems in industries has been driving the energy demand in the industrial sector. Hence, such factors are driving the market growth and forecasting during the forecast period.

Significant Market Trends

A key factor shaping the market growth is the rise in the integration of combined heat and power with smart grid technologies. The integration of combined heat and power with smart grid technologies is experiencing a significant rise in the global market. In addition, as the energy landscape undergoes significant changes, the combination of combined heat and power and smart grid technologies presents immense opportunities for improved efficiency, grid flexibility, and cost savings.

Moreover, this integration is driven by the need to optimize the utilization of distributed energy resources and improve the overall performance of energy-systems. In addition, one of the key drivers behind the increased integration of combined heat and power with smart grid technologies is the potential for improved energy-efficiency. Furthermore, by integrating combined heat and power systems with smart grids, operators can actively manage electricity generation and consumption, optimizing the operation of combined heat and power units based on real-time demand and prices. Hence, such factors are positively impacting the market. Therefore, it is expected to drive market growth and district heating during the forecast period.

Major Market Challenges

Non-economic barriers to the uptake of combined heat and power systems are one of the key challenges in the market growth. Some of the critical challenges for the uptake of fuel cell combined heat and power technology, especially from the supply chain point of view include the lack of substantial growth in the production volume of fuel cells, complex maintenance requirements and part replacement procedures, and system complexities. For example, in the ENE.FIELD project, installing fuel cells consumed one-quarter of the installation time.

Moreover, the installation of electrical connections, data communication, and other components was observed to be difficult. In addition, although the training of installers has progressed rapidly in active markets such as Germany, the lack of such training and knowledge assets can act as a barrier to the technology venturing into smaller dormant markets. Hence, such factors are negatively impacting the market. Therefore, it is expected to hinder the market during the market forecast period.

Market Customer Landscape

The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Major Companies

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

ABB Ltd: The company offers combined heat and power products such as Agenitor.

The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• ABB Ltd.
• Ameresco Inc.
• Capstone Green Energy-Corp.
• Caterpillar Inc.
• Cummins Inc.
• FuelCell EnergyInc.
• General Electric Co.
• Helec Ltd.
• HoSt Holding B.V.
• Kawasaki Heavy Industries Ltd.
• Kraft Power Corp.
• Mitsubishi Heavy Industries Ltd.
• MTT bv
• Robert Bosch GmbH
• Rolls Royce Holdings Plc
• Siemens EnergyAG
• Traton SE
• Veolia Environnement SA
• Wartsila Corp.
• 2G EnergyAG

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2023 for the following segments.

• Product Outlook 
  • Natural gas
  • Coal
  • Others
• End-user Outlook 
  • Industrial
  • Commercial
  • Residential
•  Geography Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst overview

The market is experiencing significant growth driven by factors like increasing demand for renewable energy sources and the need for resilient and reliable electric power in various sectors. Utilizing biogas, gas pretreatment, and reciprocating engines, CHP systems efficiently generate electricity while capturing and utilizing waste heat, contributing to reduced GHG emissions. These systems find applications in diverse settings such as utilities, hospitals, nursing homes, hotels, and industrial facilities. Despite challenges like lockdowns impacting discretionary spending and environmental regulatory pressures, the market continues to grow, driven by the versatility and energy efficiency of CHP technologies, particularly in commercial buildings and electric utilities. With the integration of solar panels, wind turbines, and other renewable sources, CHP systems play a crucial role in enhancing energy costs and promoting sustainable power production.

The market is flourishing with the integration of diverse energy sources, including hydrogen and biomass, catering to a wide array of consumers such as laundries, universities, schools, prisons, and private and sporting facilities. Spanning across segments like residential and commercial & industrial, CHP systems utilize steam turbines, gas turbines, and other technologies to maximize energy efficiency. They play a crucial role in ensuring a reliable electricity supply while optimizing reserve capacity and reducing reliance on traditional power plants and industrial boilers. As part of the global combined heat and power market, providers cater to the needs of small-to-medium size industrial facilities with solutions that leverage the electricity grid and promote the adoption of renewables such as solar power photovoltaics and wind energy. The market's future lies in the continued development of high-energy efficiency CHP plants and their integration with emerging technologies like electric vehicle charging stations.

Combined Heat And Power Market Scope
Report Coverage	Details
Page number	182
Base year	2023
Historic period	2018 - 2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 6.29%
Market growth 2024-2028	USD 9.35 billion
Market structure	Fragmented
YoY growth 2023-2024(%)	6.01
Regional analysis	APAC, Europe, North America, South America, and Middle East and Africa
Performing market contribution	APAC at 52%
Key countries	US, China, India, Japan, and Germany
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	ABB Ltd., Ameresco Inc., Capstone Green EnergyCorp., Caterpillar Inc., Cummins Inc., FuelCell EnergyInc., General Electric Co., Helec Ltd., HoSt Holding B.V., Kawasaki Heavy Industries Ltd., Kraft Power Corp., Mitsubishi Heavy Industries Ltd., MTT bv, Robert Bosch GmbH, Rolls Royce Holdings Plc, Siemens EnergyAG, Traton SE, Veolia Environnement SA, Wartsila Corp., and 2G EnergyAG
Market dynamics	Parent market analysis, market research and growth, market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period
Customization purview	If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

Download PDF Sample

What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the size of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across APAC, Europe, North America, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

We can help! Our analysts can customize this market research report to meet your requirements. 

Get in touch