Combined Heat and Power Market Size, Share & COVID-19 Impact Analysis, By Fuel Type (Natural Gas, Coal, Biomass, and Others), By Technology (Combined Cycle, Steam Turbine, Gas Turbine, Reciprocating Engine, and Others), By Application (Utilities, Residential, and Commercial & Industrial), and Regional Forecast, 2022-2029

The global combined heat and power market size was USD 14.98 billion in 2021 and is projected to grow from USD 15.42 billion in 2022 to USD 23.83 billion by 2029, exhibiting a CAGR of 6.4% during the forecast period. Europe dominated the global market with a share of 47.53% in 2021. 

Based on our analysis, the global market exhibited a decline of -37.5% in 2020 as compared to 2019. The global COVID-19 pandemic has been unprecedented and staggering, with combined heat and power experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. 

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. Industrial applications, especially in businesses with consistent handling and high steam prerequisites, are exceptionally monetary and address a huge portion of existing CHP capacity today. Business applications like hospitals, nursing homes, laundries, and lodgings with large hot water requirements are well appropriate for combined heat and power. Institutional applications such as universities and schools, prisons, and private and sporting offices have incredible possibilities for CHP.

COVID-19 IMPACT

Interruption in Supply Chains amidst COVID-19 Pandemic to Act as a Hindrance for Market Growth

In addition to human costs, the COVID-19 pandemic has also taken a significant toll on the global economy due to lockdown measures and severe travel restrictions to reduce its spread. Many workers across various sectors have lost their jobs, and multiple countries have experienced a significant deprivation in the total workforce in different sectors.

Accordingly, the global market has also been considerably affected, as various nations have suffered a considerable loss in the labor force across multiple business verticals. Several industry participants have reported that various scale combined heat and power projects have been running behind schedule owing to disruptions caused by the COVID-19 crisis.

For instance, in November 2020, Germany-based Bert Energy GmbH, a franchisor promoting the Bert biogas systems, announced the commission of its Bert Mobil biogas demo plant at Sri City, Andhra Pradesh, India. The company further reported that construction work of the facility experienced a delay of six months due to the outbreak caused by COVID-19, as about 80% of work was completed before the pandemic.

LATEST TRENDS

Reinforcement of Existing Energy-Producing Plants Across the Globe Will Drive the Industry Outlook

Revamping and retrofitting existing power-producing plants and declining prices due to rising hydrocarbon production will strengthen the industry outlook. Furthermore, increased efficiency, low fuel consumption, and ease of operation significantly increase product deployment.

Increasing Inclination Toward Smart Heating Systems along with Research & Development of Technological Programs Will Drive the Market

The rising reception of gas-fired systems inferable from low fossil fuel byproducts combined with the developing client tendency toward clean energy will undoubtedly drive the CHP infiltration. Substitution of conventional energy-producing systems with highly efficient cogeneration plants will help the business development. For instance, in February 2021, a gas engine and Genset manufacturer, MWM, unveiled the new Remote Asset Monitoring (RAM) software to monitor the combined heat and power site functions in real-time. The new digital condition monitoring solution enables the users to receive early alerts regarding any malfunctioning to reduce the probability of severe damage

DRIVING FACTORS

Prodigious Demand for Heat and Power to Boost Combined Heat and Power Market Demand

The unprecedented economic growth around the world gives remarkable opportunities and challenges. 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 economies' inflation may increase the demand for electricity and power, accelerating the CHP market.

Drift Toward Sustainable Energy Development to Mitigate Rising GHG Emissions is Set to Augment the Market Size

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 U.K. 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

RESTRAINING FACTORS

Constrained Application and High Initial Investment May Hinder the Market Pace

The CHP project implementation requires a considerable capital investment, which is not feasible without any government fund or assistance that may hinder the combined heat and power market growth. Varying prices between different prime mover technologies creates a reluctance among customers to shift from existing alternatives. Furthermore, prime mover technologies operating on other fuels, such as natural gas, natural gas, diesel, and hydrogen, may also inhibit the market pace.

SEGMENTATION

By Fuel Type Analysis

Natural Gas-Based CHP Units to Dominate the Industry Size

The market is categorized into natural gas, coal, biomass, and others based on fuel type. The natural gas segment is will be representing the leading position in terms of value during the forecast period. Programs dedicated to reducing the overall installation and operational costs and continuous funding from government and private entities for the development of natural gas power plant projects are key features that promote the adoption of the technology.

The biomass segment is also set to hold considerable growth due to its reducing GHG emissions, extended operational life, diversified functioning capabilities, and enhanced safety characteristics. Furthermore, new plants with wooden and agricultural fuel, established acceptability, high calorific value, efficient operations, and substantial energy production are vital features favoring the segment outlook.

By Technology Analysis

Combined Cycle Segment Size to Reinforce Significant Growth

Based on technology, the market is primarily categorized into combined cycle, steam turbine, gas turbine, reciprocating engine, and others. Combined-cycle CHP systems are projected to lead the global CHP market in 2021. Combined cycle systems in power plants reduce the losses of energy as they utilize waste heat accumulated in exhaust gases to produce additional electricity. With these systems, the plant's overall efficiency increases by over 50%, while for traditional steam turbine plants, it is approximately 40% and 35% for gas turbine plants.

By Application Analysis

Increasing Grid-Expansion Plans Support Commercial & Industrial Segments and Large Power Producing Facilities

Based on application, the market is classified into utilities, residential, and commercial & industrial. Encouraging directives to propel the installation across solar power units and expand the retail sector underpinned by industrialization favor the commercial & industrial segment size.

The market share of the residential segment is expected to grow during the forecast period due to the increase in adoption of CHP units for emergency power backup in the residential sector. A similar trend is seen in Europe as several nations embrace clean and energy-efficient technology to heat and power residential buildings. To reduce the dependence on fossil fuels and increase energy security, Japan is ironically investing in energy policies for residential buildings.

REGIONAL INSIGHTS

The market has been studied across Europe, North America, Asia Pacific, Latin America, and Middle East & Africa.

Europe's market size was estimated at USD 7.12 billion in 2021 and is will account for the largest share in terms of value. 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 market.

Furthermore, 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 market. For instance, based on planning data collected by the U.S. 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 U.S., which is 10 times greater than the amount of maximum generation capacity by all systems by the end of 2019.

Additionally, 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 for CHP systems.

KEY INDUSTRY PLAYERS

ABB is focusing on Acquiring New Contracts through its Branches to Fortify its Position

The market for combined heat & power installations is moderately consolidated. Manufacturers are focusing on entering into essential agreements & partnerships for joining innovative endeavors to launch technically enhanced products in the market. Besides, the industry has also observed the introduction of new strategies by major global and regional participants and many small & medium scale system integrators.

Swedish multinational conglomerate ABB is continuously striving to deliver its strong CHP products & solutions portfolio for different power plants all across the globe. For instance, in October 2021, ABB signed an agreement to supply integrated electrical infrastructure for a seawater heat pump to deliver green heat to over 100,000 inhabitants of the Danish port city of Esbjerg. ABB’s technology will secure reliable renewable power supply, heat production, and distribution for the plant, replacing coal-powered solutions as part of Denmark’s goal of cutting emissions by 70% by 2030.

LIST OF KEY COMPANIES PROFILED:

• Wärtsilä Corporation (Finland)


• ENER-G Rudox (U.S.)


• MAN Diesel & Turbo (Germany)


• General Electric (U.S.)


• Mitsubishi Power (Japan)


• Kawasaki Heavy Industries, Ltd. (Japan)


• Bosch Thermotechnik GmbH (Germany)


• Viessmann Werke (Germany)


• FuelCell Energy (U.S.)


• Cummings (U.S.)


• Veolia (France)


• BDR Thermea Group (Netherlands)


• CENTRAX Gas Turbines (U.K.)


• 2G Energy AG (Germany)


• ABB Group (Switzerland)


• Siemens AG (Germany)

KEY INDUSTRY DEVELOPMENTS:

• August 2020 – TEDOM and BOSCH Thermotechnik signed a contract to supply combined heat and power units. The arrangement between the two organizations incorporates the stock of little and medium-sized CHP units burning normal gasoline with an electrical output of 30-530 kW. Buderus can extend its portfolio and offer CHP units with lower and higher results with this new collaboration. The whole arrangement of Buderus Loganova units, under which BOSCH Thermotechnik has up to this point offered its cogeneration items, will be supplanted by TEDOM CHP units


• October 2020 - Siemens Energy conveyed two SGT-700 gas turbines for a food fixing handling plant that Tate and Lyle possessed in Lafayette, Indiana, U.S. The two turbines will be the foundation of another consolidated CHP activity supplanting its coal-terminated boilers. By producing power nearby and recuperating heat that would typically be squandered, the new CHP activity will expand energy productivity and significantly diminish energy expenses and fossil fuel byproducts.

REPORT COVERAGE

The market research report offers an in-depth analysis of the industry. It further provides details on the adoption of CHP systems across several regions. Information on trends, drivers, opportunities, threats, and market restraints can further help stakeholders gain valuable insights into the market. The report offers a detailed competitive landscape by presenting information on key players and their strategies in the market.

Report Scope & Segmentation