The global combined heat and power (CHP) systems market is anticipated to be valued at USD 29,512.2 million in 2023, forecast to grow at a CAGR of 4.9% to be valued at USD 47,616.5 million from 2023 to 2033. Growth is attributed to the increasing demand for electricity and power.
Cogeneration (also known as combined heat and power systems (CHP)) is a cluster of technologies primarily used for the concurrent generation of electricity and useful heat. This combined generation of heat and electricity is much more effective than a separate generation of electricity and useful heat in a way that CHP systems offer improved energy efficiency, reduced managing cost, low CO2 emission, and others.
Combined Heat and Power (CHP) is a productive and clean way to deal with creating electric power and thermal power from a solitary fuel source. CHP produces power creation at or close to the end user's site so that the heat released out of power generation can be utilized to meet the user's heat necessities while the power produced meets all or a part of the site's energy needs. Applications with consistent electricity and thermal energy demand are great monetary focuses for CHP deployment.
| Attribute | Details |
|---|---|
| Historical Value (2022) | USD 28,412.4 million |
| Current Year Value (2023) | USD 29,512.2 million |
| Expected Forecast Value (2033) | USD 47,616.5 million |
| Historical CAGR (2018 to 2022) | 3.9% |
| Projected CAGR (2023 to 2033) | 4.9% |
Growing data center capacity as businesses operate more processes, handle complex analytics with increasing storage requirements for customer data and employ rich media. Handling such large data requires a continuous supply of reliable power making cogeneration systems of primary importance.
The high initial capital cost required for the installation of the CHP Systems is one of the major factors that is expected to hamper the growth of the Combined Heat and Power (CHP) Systems Market over the analysis period.
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The unprecedented economic growth around the world gives remarkable opportunities to the Combined Heat and Power (CHP) Systems Market. Energy is quintessential for paving the way for nurturing economies. CHP units are deployed in many IT parks, schools, universities, hospitals, airports, malls, and commercial spaces to economically generate the electricity and power to be independent energy producers.
The growing commercial sectors owing to economic inflation may increase the demand for electricity and power, which in turn, is expected to accelerate the CHP Systems market over the analysis period.
Regions with high electricity costs are readily adopting CHP systems primarily to save on their energy cost to provide base load power and use such systems to provide absorption cooling for the facility. Moreover, government initiatives to install CHP systems in data center facilities, due to low CO2 emissions, which is also expected to increase its adoption rate thereby increasing the adoption of CHP systems in data centers.
Low economic life of data center IT equipment results in consumer reluctance towards the adoption of CHP systems for data centers since these systems have an equipment life of around 10-15 years in comparison to the economic life of IT equipment which is only 2-3 years.
Enormous carbon emission has adversely affected the overall ecology causing a rise in sea level and temperature. Several governments and private entities are persistently working to mitigate rising carbon emissions by adopting highly efficient, clean, and sustainable energy technology, which is anticipated to augment the market. Combined heat and power market units are highly efficient in terms of overall performance. It can achieve an efficiency of over 85% to meet the rising demand for space heating & cooling and hot water while providing electricity to supplement the grid.
For instance, in February 2018, the United Kingdom Government’s Department of Business, Energy & Industrial Strategy updated that the utilization of cogeneration systems can reduce carbon discharge by up to 30% in contrast with other conventional technologies
The CHP project implementation requires considerable capital investment, which is not feasible without any government funds or assistance that may hinder the combined heat and power market growth. Varying prices between different prime mover technologies create a reluctance among customers to shift from existing alternatives. Furthermore, prime mover technologies operating on other fuels, such as natural gas, diesel, and hydrogen, may also inhibit the market pace.
Another biggest challenge for installing a CHP plant is the high initial capital cost required for installation. In addition to the power generation equipment such as prime mover, generator systems, and others, CHP plants also require additional equipment such as heat exchangers, absorption chillers, boilers, and other equipment. The cost of a conventional CHP plant can be almost 240% more than that of the cost of a power generation plant of the same capacity and prime mover, making it a major restraint for the CHP market.
Maintenance costs of CHP systems are also high due to the complex assembly of the system, which includes different components such as prime mover, heat recovery system, and heat and steam pipes. Regular maintenance of all the components is needed to achieve the high efficiency of the CHP.
Principal Consultant
In terms of regional platforms, North America holds the largest market share in Combined Heat and Power (CHP) Systems market. Economical funding programs & rebates, promising research & development initiatives outline plans for reducing cost-effectively, and detailed CHP installation guidelines are some of the significant parameters complementing the North American CHP Systems market.
For instance, based on planning data collected by the USA. Energy information administration, an additional 10,000 megawatts (MW) of large-scale CHP’s ability to contribute electricity to the grid is expected to be introduced between 2021 and 2023 in the USA, which is 10 times greater than the amount of maximum generation capacity by all systems by the end of 2019.
Governments across the region have set strict carbon emission targets owing to which, the USA and Canada are reducing their reliance on coal-powered power plants and introducing cleaner fuels to their energy mix.
A burgeoning energy demand along with the deployment of gas-based technology across these countries will accelerate the business landscape in the region. In addition, extreme climatic conditions across Canada and a few USA including Alaska will fuel the demand for energy-efficient & reliable space heating technologies, which in turn, will spur the CHP market progression in the region.
| Country | United States |
|---|---|
| 2022 Value Share in Global Market | 17.6% |
The United States is one of the world's leading energy consumers. The government and businesses are increasingly focusing on energy efficiency measures to reduce their energy consumption and costs. CHP systems are a highly efficient way to generate electricity and heat, which makes them a good option for businesses and organizations looking to improve their energy efficiency. As a result, the United States combined heat and power market is witnessing massive growth.
The United States government has implemented several regulations and incentives to promote the use of CHP systems. For example, the Public Utility Regulatory Policies Act (PURPA) allows non-utility generators to sell electricity to the grid, which provides an incentive for businesses and organizations to install CHP systems.
The commercial sector is the leading end-user of CHP systems in the United States, followed by the industrial sector. This is because CHP systems are a good way to meet the heating and cooling needs of these sectors. Industrial applications account for over 87% of the country's CHP capacity, supplying electricity and steam to significant industries such as chemicals, paper, refining, food processing, and metal manufacturing.
CHP accounts for 13% of existing capacity in commercial and institutional applications, supplying electricity, heating, and cooling to hospitals, schools, campuses, nursing homes, hotels, and office and apartment complexes. A USD 30.1 million combined heat and power project to be built at the Jackson Pike facility in Columbus, Ohio, was approved in September 2021.
The CHP plant uses methane produced by wastewater treatment, which is now flared off, to power two steam generators, which is going to provide electricity to run and heat the facility.
According to Future Market Insights, Europe is expected to hold significant growth opportunities for Combined Heat and Power (CHP) Systems. Expanding demand for district energy (heating) and cooling systems under moving climatic conditions alongside continuous mechanical developments inferable from fuel adaptability are the significant variables supplementing the territorial standpoint of the CHP systems market.
The European market is aided by tremendous carbon reduction goals by the provincial specialists, as stated by the European Commission. The district is likewise upheld by a broad scope of empowering sustainable arrangement destinations and energy security strategies animating interest in CHP systems.
The market growth in this region is attributed to the increasing awareness of the impact of human activities on the environment and fluctuating prices of traditional fuels used for power and heat generation within the region.
| Country | United Kingdom |
|---|---|
| Value CAGR (2023 to 2033) | 4.4% |
The increasing demand for electricity and heat from commercial and industrial sectors is driving the growth of the United Kingdom combined heat and power market. The market is driven by the increasing demand for electricity and heat, the government's focus on reducing carbon emissions, and the rising popularity of micro-CHP systems.
The United Kingdom is one of the leading countries in the adoption of CHP systems in Europe. The government's focus on reducing carbon emissions is also boosting the adoption of CHP systems in the country. The rising popularity of micro-CHP systems is another key trend that is expected to drive market growth in the coming years. Construction activity has been expanding across the country in recent years.
According to the Office of National Statistics, the total value of new building orders in the private commercial sector climbed to roughly GBP 14,484 million in 2022, an increase of around 35% over 2020.
These are projected to drive the expansion of CHP systems in the nation throughout the forecast period. In May 2023, DS Smith and E.ON opened the new Kemsley CHP facility. The company has partnered with E.ON to construct a combined heat and power (CHP) unit at DS Smith's paper mill.
| Country | Germany |
|---|---|
| 2022 Value Share in Global Market | 6.4% |
The growth of the Germany combined heat and power market is being driven by government policies and initiatives, rising environmental concerns, and the need for a reliable and uninterrupted power supply. The German government has strongly supported CHP and has implemented many policies to promote its use.
Gas-fired CHP plants dominate the market in Germany, but there is a growing interest in biomass-fired and renewable energy-based CHP systems. Germany's robust industrial sector, including manufacturing, chemicals, and pharmaceuticals, provides a significant market opportunity for CHP systems.
In its most recent procurement round, Germany selected proposals for 57.85 MW of combined heat and power plants in June 2021. It was granted 25.37 MW of proposals in the category of innovative CHP capacity.
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According to Future Market Insights, Asia-Pacific is expected to grow with lucrative growth opportunities for Combined Heat and Power (CHP) Systems Market. The Asia-Pacific Combined Heat and Power Systems market is expected to grow due to rapid industrialization, urbanization, and economic growth in the region, leading to the installation of new CHP systems in various emerging economies.
The CHP market is expected to grow in countries such as China and India due to infrastructural expansions, ongoing power generation projects, and technological innovations. Investments in large new gas-fired cogeneration plants and large coal-fired plants, along with rising demand for electricity, are expected to drive the growth of the Asia Pacific CHP market over the next five years.
The region is the largest energy consumer globally, with China and India leading the growth in power generation and consumption. CHP has tremendous potential in the Asia Pacific, mainly due to the rapid economic growth in China and the transition from coal-based generation to gas-fired power generation.
| Countries | Value CAGR (2023 to 2033) |
|---|---|
| China | 5.5% |
| India | 5.7% |
China is the world's leading CHP market and is expected to remain the leader in the coming years. The increasing demand for electricity and heat is a key driver of the China combined heat and power market. The country's economy is growing rapidly, and this is leading to an increase in the demand for electricity and heat.
CHP systems can help to meet this demand more efficiently than traditional power plants. The government's focus on energy efficiency is another key trend driving the market in China. The Chia Hut Combined Heat and Power Plant project in Taiwan began commercial operations in October 2021. The facility is powered by natural gas and contains seven General Electric 7HA.02 gas turbines.
The government has set ambitious targets for reducing energy consumption, and CHP systems can help to achieve these targets. Bioenergy capacity in China reached 18,687 megawatts (MW) in 2020, up from 16,637 MW in 2019, and it is likely to rise further as China aims to build over 25 GW of biomass CHP capacity by 2035, potentially influencing market expansion.
The Indian government is promoting the use of decentralized power generation technologies, such as CHP systems, to improve the reliability and security of the country's power grid. This is expected to drive the growth of India combined heat and power market.
The industrial sector in India is one of the leading consumers of energy. Using CHP systems in the industrial sector can reduce overall energy consumption and improve the industry's efficiency. This is expected to boost the market growth in India. The Indian government has implemented stringent regulations for carbon emissions.
This has led to an increase in the demand for CHP systems, which are more efficient and emit lower levels of pollutants than conventional power plants.
| Country | Japan |
|---|---|
| 2022 Value Share in Global Market | 3.8% |
The Japan government is promoting the use of distributed generation as a way to improve energy security and reduce carbon emissions. This is driving the demand for CHP systems. In addition, the government is dedicated to lowering greenhouse gas emissions.
This is driving the demand for CHP systems, which are a more efficient way to generate electricity and heat. The power industry is the leading consumer of CHP systems in Japan. CHP systems are used to generate electricity and heat for power plants. The country is also facing increasing environmental concerns, which is driving the demand for CHP systems.
The old power plants in Japan are being upgraded with CHP systems to improve efficiency and reduce emissions. The reliable and uninterrupted power supply offered by CHP systems is also a key factor driving the market growth.
According to Future Market Insights, the Middle East & Africa are expected to provide significant growth opportunities for Combined Heat and Power (CHP) Systems Market.
Favorable government policies, as well as the growing initiative to promote the adoption of sustainable energy sources such as micro-CHP, are the major factors that are anticipated to accelerate the growth of the Combined Heat and Power (CHP) Systems Market during the forecast period.
The existence of large-scale manufacturers in the Middle East and Africa region is expected to fuel the demand for CHP Systems in the region. Besides, the government in some of the Middle East and African countries, such as Saudi Arabia, and the United Arab Emirates are also supporting combined heat and power installations through various policies and research and development initiatives. These factors will lead to the growth of the market for combined heat and power installations in the Middle East and Africa in the future.
| Segment | 2022 Value Share in Global Market |
|---|---|
| Server Farms | 24.6% |
| Newly Installed Systems | 56.7% |
Server farms are large facilities that house large numbers of computer servers. These servers consume a lot of electricity and produce a lot of heat. CHP systems can supply both heat and electricity to server farms, reducing their energy usage and running costs. Furthermore, CHP systems can help to enhance the efficiency of server farms.
When a CHP system is implemented, the waste heat from the power-generating process can be utilized to heat the server farm, reducing the amount of energy required for heating. This can result in considerable energy savings. Lastly, CHP systems can assist in increasing server farm stability. If there is a power outage, the CHP system can continue to power and heat the server farm, preventing data loss and downtime.
Many governments offer incentives for businesses and organizations to install CHP systems. These incentives can take the form of tax breaks, rebates, or grants. This makes it more affordable for businesses to install new CHP systems, which in turn drives demand for newly installed systems.
There is a growing awareness of the benefits of CHP systems, such as their ability to reduce energy costs, improve efficiency, and reduce emissions. This awareness is driving demand for CHP systems, particularly among businesses and organizations that are looking to improve their environmental performance.
CHP technology has advanced significantly in recent years, making it more efficient and reliable. This has made CHP systems more attractive to businesses and organizations. This has also contributed to the growth of the newly installed systems segment.
There are many prominent market players in the Combined Heat and Power (CHP) Systems Market such as ClearCell Power, H3CHP, Enexor Bioenergy, Lerta, and RESET, among others, that are working hand-in-hand to provide the best-in-class Combined Heat and Power (CHP) Systems for enhancing the global arena.
However, there are many global start-ups in the Combined Heat and Power (CHP) Systems Market, which are stepping forward in matching the requirements of the Combined Heat and Power (CHP) Systems domain.
Founded in 2015, ClearCell Power offers combined heat and power systems that enable the onsite generation of electrical and thermal energy. The technology improves energy efficiency as it requires less fuel while eliminating transmission and distribution losses. It further minimizes the emission of greenhouse gases (GHGs). Energy startups are working on CHP fuel cells that utilize a range of sources, including natural gas, coal, hydrogen, and biomass.
Established in 2016, Canadian startup H3CHP develops cogeneration solutions for the energy industry. The startup’s biomass gasification technology converts wood waste, biosolids, solids, and other organic feedstocks into syngas. For greenhouse owners, the solution provides an ideal disposal method for biomass that also generates carbon dioxide to enhance crop growth. The residual heat is captured and redirected to the site for heating or processing needs.
Some of the key participants present in the global Combined Heat and Power (CHP) Systems market include ENER-G, Korea Electric Power Corporation, National Grid plc, Exelon Corporation, NextEra Energy, Inc., Chubu Electric Power Company, American Electric Power Company, Inc. among others.
Attributed to the presence of such a high number of participants, the market is highly competitive. While global players such as ENER-G, Korea Electric Power Corporation, National Grid plc, Exelon Corporation, and NextEra Energy, Inc., account for a considerable market size, several regional-level players are also operating across key growth regions, particularly in North America.
Recent Development:
In February 2023, Bloom Energy released its newest application. It aims to enhance the efficiency of the Bloom Energy Server™. The goal is to serve customers in markets with growing energy demand. Customers can now order the Bloom platform with enhanced compatibility for combined heat and power, resulting in improved system efficiency and economic benefits.
In May 2022, Caterpillar Inc. unveiled a three-year collaboration with District Energy St. Paul, based in Minnesota. The aim of the partnership is to showcase a combined heat and power system fueled by hydrogen. The project has received support and partial funding from the United States Department of Energy, with the backing of the National Renewable Energy Laboratory.
In July 2021, Capstone Green Energy signed a 10-year service contract on 1.2 MWs of micro-turbines installed in the fourth-tallest building in New York City. The skyscraper's 1.2 MW energy efficiency plant consists of two Capstone C600S microturbines with Capstone's Integrated Heat Recovery Modules.
In March 2021, The European Marine Energy Centre (EMEC) collaborated with Highlands and Islands Airports Limited (HIAL) to decarbonize heat and power at Kirkwall Airport through green hydrogen technology.
In February 2021, Siemens signed an agreement with the Guangdong Energy Group to provide F-class gas turbine island equipment for the Zhaoqing Dinghu Combined Heat and Power (CHP) generation project in Dinghu District, Zhaoqing City, Guangdong Province (China). The CHP plant is rated at 2×460MW and includes two SGT5-4000F gas turbines, two steam turbines, four generators, two SPPA-T3000 control systems, and related auxiliary equipment.
In February 2021, Wärtsilä secured a contract from Kraftwerke Mainz-Wiesbaden to deliver a 100 MW CHP plant, which would feed the excess heat generated during power generation into the Mainz district heating network, providing around 40,000 modern single-family homes.
Key Companies Profiled
North America is projected to emerge as a lucrative market.
The growth potential of the combined heat and power systems market is 4.9% through 2033.
High cost of adoption is likely to limit market growth.
North America is likely to generate higher revenue in 2023.
The market is estimated to secure a valuation of USD 29,512.2 million in 2023.
1. Executive Summary 2. Market Overview 3. Market Background 4. Global Market Analysis 2018 to 2022 and Forecast, 2023 to 2033 5. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Data Center Type 5.1. Telecoms 5.2. ISPs (Internet Service Providers) 5.3. CoLos (Co-located server hosting facilities) 5.4. Server Farms 5.5. Corporate Data Centers 5.6. University/National Laboratory 5.7. Others 6. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Facility 6.1. Less than 200 sq. ft 6.2. 200 to 700 sq. ft 6.3. 700 to 1,200 sq. ft 6.4. 1,200 to 6,000 sq. ft 6.5. More than 6,000 sq. ft. 7. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Installation Type 7.1. Newly Installed Systems 7.2. Retrofit Systems 8. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Region 8.1. North America 8.2. Latin America 8.3. Western Europe 8.4. Eastern Europe 8.5. South Asia and Pacific 8.6. East Asia 8.7. Middle East and Africa 9. North America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 10. Latin America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 11. Western Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 12. Eastern Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 13. South Asia and Pacific Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 14. East Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 15. Middle East and Africa Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 16. Key Countries Market Analysis 17. Market Structure Analysis 18. Competition Analysis 18.1. ENER-G 18.2. Korea Electric Power Corporation 18.3. National Grid Plc. 18.4. Exelon Corporation 18.5. NextEra Energy Inc. 18.6. Chubu Electric Power Company 18.7. American Electric Power Company Inc. 18.8. BDR Thermea Group 18.9. Centrica Business Solutions 18.10. Mitsubishi Power 19. Assumptions & Acronyms Used 20. Research Methodology
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Combined Heat and Power (CHP) Systems Market
