Combined Heat and Power Market Size, Share & Industry | 2031

Report Description

Combined Heat and Power Market Outlook 2031

The global combined heat and power market size was USD 28 Billion in 2022 and is expected to reach USD 44.49 Billion by 2031 expand at a significant CAGR 5.28% during the forecast period, 2023–2031. The growth of the market is attributed to factors such as the active supply, improved energy efficiency, in addition to the regulatory pressure on power plants and industrial boilers may drive the number of installations of power plants.

Combined heat and power (CHP) is an efficient local power generation process that helps eliminate power distribution networks and generate heat in integrated systems. A large amount of energy saving is applicable to different end users. The energy generated is used to cool commercial and residential setup and space heating. These facilities have low cost, minimal distribution loss, and high efficiency.

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The growing demand for distributed power generation through various power systems, coupled with extensive design, capabilities, and applications of cogeneration systems are estimated to increase product penetration. Factors such as efficient systems, low installation & operating costs, and competitive natural gas prices are projected to drive the market.

In addition, both developed and developing countries are becoming more aware of energy saving and high efficiency. Over time, these factors are expected to promote the development of the combined heat and power market. Combined heat and power plants are more expensive than traditional systems such as boilers and diesel generators.

Combined Heat and Power Market Trends, Drivers, Restraints, and Opportunities

• Increasing demand for energy productivity in industries due to rising cost from power industry and promotional activities by government is projected to boost the market during the forecast period.
• Rapid growth of the pharmaceutical & cement industry is creating demand for large-scale combined heat & power system for high temperature and pressure requirement.
• Rising awareness about energy conservation and growing use of natural gas for power generation is anticipated to drive the market during forecast period.
• High installation & maintenance cost in addition to the other equipment used in combined heat & power system is projected to restrict the market growth.
• Lack of awareness about the environmental effects due to carbon emission, rise in renewable power generation, and lack of schemes by government for adoption of heat & power systems by industries present as major factors that can hamper the market growth.
• R&D investment and development in distributed power generation system is projected to offer significant opportunities for the market players.

Scope of The Combined Heat and Power Market Report

The report on the global combined heat & power market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

The implementation of Combined Heat and Power systems is gaining traction due to their ability to provide both electricity and thermal energy from a single fuel source. This dual-generation capability not only enhances energy efficiency but also reduces greenhouse gas emissions significantly. By utilizing waste heat that would otherwise be lost in conventional power generation, CHP systems maximize the utility of the fuel consumed. This makes them an attractive option for industries looking to improve their energy sustainability and reduce operational costs.

Combined Heat and Power Market Segment Insights

The commercial & industrial segment is projected to hold a major market share

In terms of applications, the combined heat & energy market is segregated into utilities, commercial & industrial, and residential. The commercial & industrial segment is expected to represent a key share of the market during the forecast period owing to growing demand for heat and steam from industry and municipalities. The industrial sector is the main consumer of electricity, accounting for nearly 60% of all electricity.

Steel, chemicals, cement, pharmaceuticals, refining, glass, textiles, paper & pulp, and mining are the main consumers. Industrial cogeneration in oil refineries, sugar mills, and the pulp & paper industry is often seen as a technically and financially viable option that reduces the load on the grid. These systems are also used in other applications such as hospitals, casinos, airports, office buildings, and military bases. They are most suitable for places where buildings have "radiators", such as swimming pools.

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The biomass segment is expected to expand at a significant CAGR

Based on fuel types, the combined heat & energy market is segregated into natural gas, coal, oil, biomass, and others. The biomass segment is expected to hold a key share of the market during the forecast period. The combustion of biomass is a carbon-free process because the resulting CO₂ is captured by the incinerator.

Combining biomass heat and power is a useful technology for plants that require heat and power, especially when the plant is off-grid and biomass fuel is easily available. On the other hand, the natural gas segment is anticipated to expand at a rapid pace during the forecast period. Combined heat and power that is the production of electricity or mechanical energy and useful heat from a single source of energy at one point of use, provides the US with many potentially advanced energy benefits such as efficiency, reduction of greenhouse gas, economic competitiveness, and energy sustainability.

The high efficiency of CHP can reduce fuel consumption and greenhouse gas emissions. The reduction in carbon dioxide emissions is equivalent to removing more than 45 million vehicles from the road. Approximately 87% of the country's combined heat and power capacity is used to provide electricity and steam to large industries such as chemical, paper, oil refining, food & metal processing, power supply, heating & cooling for hospitals, schools, campuses, nursing homes, hotels, office buildings, and residential communities.

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 North America is anticipated to dominate the market

On the basis of regions, the combined heat & power market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is anticipated to dominate the market during the forecast period.

A reliable and resilient power grid is essential to the economic growth and energy security of countries such as the US. As the national grid connects more and more renewable energy sources, such as wind and solar power, these sources of electricity rarely cause problems for the operation of power system.

Utilities and other network operators are facing immediate and growing demand for additional capacity to maintain the stability and security of the grid. Cogeneration technology can help manufacturing companies, federal & other government agencies, commercial buildings, institutions & communities reduce energy costs and emissions. In the US, combined heat and power plants can save 1.8 square meters of fuel each year, thereby avoiding 241 million tons of carbon dioxide emissions each year.

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