The Combined Heat And Power (CHP) Market is estimated to be valued at US$ 26.98 Bn in 2023 and is expected to exhibit a CAGR of 8.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Combined Heat and Power (CHP) or cogeneration is the concurrent production of electricity or mechanical power and useful thermal energy from a single source of primary energy. CHP systems recover heat that would otherwise be wasted from the electricity generation process and put it to beneficial use such as space heating, air conditioning, domestic hot water, industrial processes etc. This dual production of power and useful heat leads to improved overall fuel efficiency compared with separate production of useful heat and electricity. CHP is commonly used in district heating systems. Major products and applications associated with CHP market includes gas turbines, steam turbines, reciprocating engines, microturbines, fuel cells, district energy systems.
Market Dynamics:
Increased demand for distributed energy resources is one of the major drivers driving growth of the CHP market. Traditional centralized power generation and distribution system is known for high transmission and distribution losses and poor reliability in some areas. The distributed aspect of CHP where useful heat and power are generated and used locally helps reduce transmission losses and improves energy access especially in remote areas not connected to main utility grids. Additionally, growing focus towards minimizing carbon footprint is favoring adoption of clean and efficient distributed energy technologies like CHP. Many countries and regions have set ambitious decarbonization targets to achieve net-zero emissions by 2050 which is opening new growth avenues for low-carbon CHP systems. Government incentives and initiatives in various nations to encourage deployment of cleaner decentralized CHP applications will further accelerate market revenue growth over the forecast period.
Segment Analysis
For the Global Combined Heat And Power (CHP) Market, the dominant segment is Natural Gas based CHP systems which accounts for over 60% of the market share. Natural gas offers various benefits for power generation such as lower capital cost of plant and equipments, established infrastructure for gas supply, etc. This makes natural gas based systems economical and reliable for both base load and peak power supply.
PEST Analysis
Political: Supportive government policies and incentives such as tax benefits and subsidies promote higher adoption of clean energy sources like CHP. This drives the market growth.
Economic: Rising energy costs make CHP an attractive proposition for both commercial and industrial applications resulting in significant cost savings.
Social: Concerns over environmental pollution and need for greener alternatives propels the demand for decentralized CHP generation which utilizes waste heat for powering local needs efficiently.
Technological: Advancements in gas turbine, fuel cell and reciprocating engine technologies improve the operational efficiency and reliability of different CHP systems.
Key Takeaways
The global Combined Heat And Power (CHP) market is expected to witness high growth, exhibiting CAGR of 8.8% over the forecast period 2023 to 2030, due to increasing demand for reliable and efficient decentralized power solutions. The market size for 2023 is estimated to be US$ 26.98 Bn.
Regional analysis: Asia Pacific region is expected to dominate the CHP market owing to rapid industrialization and strong government support through regulatory mandates for deployment of cogeneration systems in countries like China, India, Japan, South Korea. Countries in Europe also have a significant share due to stringent emission norms driving replacement of conventional boilers with CHP systems.
Key players: Key players operating in the Combined Heat And Power (CHP) market are Wartsila, Siemens, GE, 2G Energy, Aegis Energy Services, Bosch Thermotechnology, Kawasaki Heavy Industries, Viessmann Werke, FuelCell Energy, Veolia, Clarke Energy, CAPSTONE TURBINE, Caterpillar, Yanmar, ABB, Edina, Wolf GmbH, Atlas Copco, Tecogen Inc. These players are focusing on capacity expansion, new product launches, and partnerships to gain competitive advantage in the market.
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