District Heating Market by Technology and Geography - Forecast and Analysis 2021-2025

The district heating market share is expected to increase by USD 21.67 billion from 2020 to 2025, and the market's growth momentum will accelerate at a CAGR of 3%.

This district heating market research report provides valuable insights on the post COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers district heating market segmentations by technology (fossil fuels and renewables) and geography (Europe, APAC, North America, MEA, and South America). The district heating market report also offers information on several market vendors, including Alfa Laval AB, Danfoss AS, Fortum Oyj, John Wood Group Plc, Korea District Heating Corp., NRG Energy Inc., Ramboll Group AS, Statkraft AS, Vattenfall AB, and Xylem Inc. among others.

What will the District Heating Market Size be During the Forecast Period?

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District Heating Market: Key Drivers, Trends, and Challenges

Based on our research output, there has been a negative impact on the market growth during and post COVID-19 era. The implementation of district heating in smart cities is notably driving the district heating market growth, although factors such as competition from fuel-cell-based micro-chp may impede market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the district heating industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.

Key District Heating Market Driver

One of the key factors driving the district heating market is the implementation of district heating in smart cities. Smart cities emphasize highly on information and communication technology (ICT) to provide real-time responses to the activities along with improving the quality of lifestyle of the citizens. Multiple countries across the world are focusing on developing smart cities and are investing heavily in these projects. Through smart cities, the stakeholder can manage the resources more efficiently. Even though developments are taking place rapidly in the smart cities project, a few challenges such as an increase in population, global warming, and rising demand for resources still need to be addressed. The district heating network, along with district cooling, remains a crucial infrastructure for the decarbonization of cities. When compared with the individual systems for heating, the district heating networks provide several advantages such as cost-efficiency and fewer emissions. For instance, high-capacity chillers or boilers can perform more efficiently when placed at centralized locations. Waste heat recovery, when combined with smart sensors, can be improved at the central plants. The usage of renewable energy sources such as solar thermal energy, biomass, or geothermal can be implemented to produce clean energy, thereby reducing the carbon footprint in smart cities. The online access to the buildings of smart cities will assist in making optimal designs for the district heating network, which will help the smart cities in achieving their GHG emissions and other norms

Key District Heating Market Trend

Another key factor driving the district heating market growth is the increasing use of biomass district heating. The electricity and heat generation industry is the leading industry for CO2 emissions across the world, as a major part of the fuels used in heat generation is based on fossil fuels. However, in efforts to decrease the environmental impact and increase energy security, wood pellets are being used as a viable alternative fuel in district heating centers. Wood pellets are a form of biomass fuel that can be sourced locally, thereby reducing the need for importing fossil fuels, and they also encourage local investment. Wood pellets are being used in district heating systems where the building density is high, and a single boiler generates the heat, which is transferred through a heat network to cater to several buildings. A well-designed district heating system can reach efficiencies of up to 90%. It is also cost-effective and does not require individual boilers at usage areas; only a meter and an interface control system are installed in the end-users' premises.District heating also allows higher economies of scale in producing heat and uses better technologies to produce heat efficiently. Strict building regulations regarding emissions and heat generated at a central location limit expensive upgrades. They also enable a high level of emission reduction and help create a safer living and working environment. The district heating centers are switching to biomass boilers due to the emission regulations.Another reason for this switch is the implementation of a carbon tax policy by several governments in countries such as the US, the UK, Ireland, Canada, and Australia. 

Key District Heating Market Challenge

Competition from fuel-cell-based micro-CHP is one of the key challenges hindering the district heating market growth. The search for more sustainable and reliable energy sources to bridge the transition toward a sustainable energy infrastructure has intensified in recent years. Fuel-cell-based micro-CHP has emerged as one of the most promising innovations for the same purpose. The below illustration demonstrates the comparison of the final energy efficiency achieved using a separate thermal and heat power generator and fuel cells:It can be observed from the illustration that fuel cells offer high efficiency, and as a result, consume less fuel. Moreover, as there is no combustion involved, fuel cells have lesser emissions. The fuel-cell-based micro-CHP can have a system efficiency of up to 95% and electricity efficiency up to 60%, which is higher when compared with other technologies. Generally, in fuel-cell-based micro-CHP, power is supplied through the grid, and the necessary heat is either generated using a boiler at the place of consumption or is supplied over a centralized heat network. The generation of heat and power at a centralized location and their supply to households is less efficient as the technology used itself is inefficient, in addition to which a small percentage is lost in transmission, thereby reducing the overall efficiency. The fuel cells are being used in commercial and institutional buildings where the demand for thermal energy and electricity is high. Thermal energy is used for space heating or water heating purposes. Due to its widespread usage, many governments are also pushing fuel cell adoption.

This district heating market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2021-2025.

Parent Market Analysis

Technavio categorizes the global district heating market as a part of the global utilities market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the district heating market during the forecast period.

Who are the Major District Heating Market Vendors?

The report analyzes the market's competitive landscape and offers information on several market vendors, including:

 

• Alfa Laval AB
• Danfoss AS
• Fortum Oyj
• John Wood Group Plc
• Korea District Heating Corp.
• NRG Energy Inc.
• Ramboll Group AS
• Statkraft AS
• Vattenfall AB
• Xylem Inc.

 

This statistical study of the district heating market encompasses successful business strategies deployed by the key vendors. The district heating market is fragmented and the vendors are deploying growth strategies such as organic and inorganic strategies to compete in the market.

Product Insights and News

• Alfa Laval AB - The company offers plate heat exchangers namely AlfaNova, AlfaQ and other products. 

To make the most of the opportunities and recover from post COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.

The district heating market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.

District Heating Market Value Chain Analysis

Our report provides extensive information on the value chain analysis for the district heating market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.

The value chain of utilities market includes the following core components:

• Project planning
• Manufacturing
• Installation
• Grid connection
• Operation and maintenance
• De-commissioning
• Supporting processes

The report has further elucidated on other innovative approaches being followed by manufacturers to ensure a sustainable market presence.

 

Which are the Key Regions for District Heating Market?

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74% of the market's growth will originate from Europe during the forecast period. Russian Federation, Poland, Germany, and Denmark are the key markets for district heating market in Europe. Market growth in this region will be slower than the growth of the market in North America regions.

Increasing construction of smart cities and ZEBs, along with the growing number of policies and mandates for the use of renewable sources such as biomass and solar will facilitate the district heating market growth in Europe over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.

 

What are the Revenue-generating Technology Segments in the District Heating Market?

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The district heating market share growth by the fossil fuels will be significant during the forecast period. The fossil fuels-based district heating systems use fuels such as coal, natural gas, and oil for producing the steam or heating the water at the central boilers. Coal and natural gas have dominated the global district heating market, as these energy sources are abundantly available. The availability of these resources has resulted in high adoption in countries like Russia, China, and European nations.

This report provides an accurate prediction of the contribution of all the segments to the growth of the district heating market size and actionable market insights on post COVID-19 impact on each segment.

 

District Heating Market Scope
Report Coverage	Details
Page number	120
Base year	2020
Forecast period	2021-2025
Growth momentum & CAGR	Accelerate at a CAGR of 3%
Market growth 2021-2025	$ 21.67 billion
Market structure	Fragmented
YoY growth (%)	2.01
Regional analysis	Europe, APAC, North America, MEA, and South America
Performing market contribution	Europe at 74%
Key consumer countries	Russian Federation, China, Poland, Germany, and Denmark
Competitive landscape	Leading companies, Competitive strategies, Consumer engagement scope
Key companies profiled	Alfa Laval AB, Danfoss AS, Fortum Oyj, John Wood Group Plc, Korea District Heating Corp., NRG Energy Inc., Ramboll Group AS, Statkraft AS, Vattenfall AB, and Xylem Inc.
Market dynamics	Parent market analysis, 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 report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this District Heating Market Report?

• CAGR of the market during the forecast period 2021-2025
• Detailed information on factors that will drive district heating market growth during the next five years
• Precise estimation of the district heating market size and its contribution to the parent market
• Accurate predictions on upcoming trends and changes in consumer behavior
• The growth of the district heating industry across Europe, APAC, North America, MEA, and South America
• A thorough analysis of the market's competitive landscape and detailed information on vendors
• Comprehensive details of factors that will challenge the growth of district heating market vendors

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