Bio CHP Market Size, Share & COVID-19 Impact Analysis, By Feedstock (Food Waste, Plastic Waste, Agriculture Waste, Wood Waste, Animal Waste, Paper Waste, and Others), By Prime Mover (Steam Turbine, Gas Turbine, Microturbine, IC Engine), By End-User (Healthcare, Hospitality, Commercial Buildings, Airports, Education Institutes, Recycling Facilities, Manufacturing Industry, Waste Treatment Plant), and Regional Forecast, 2021-2028

The global bio CHP market size was USD 2.44 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with bio CHP witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market of bio CHP exhibited a significant decline of -10.7% in 2020. The market is projected to grow from USD 2.55 billion in 2021 to USD 3.54 billion in 2028 at a CAGR of 4.8% during the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Combined heat and power or CHP is a unique technology deployed in numerous establishments to enhance energy efficiency. A CHP system produces power to suffice the energy demands and captures the excessive heat generated during the process to utilize it for other applications such as water and space heating. These cogeneration power plants are equipped with various technologies such as engines and fuel cells and are designed to run on a wide range of fuels, including oil, natural gas, biogas, hydrogen, solid biomass, steam, and coal. A CHP unit is a highly efficient, reliable, and cost-effective source of heat and power with easy adaptability to varying needs around the year.

Deteriorating Macroeconomic Conditions of Companies amid COVID-19 to Slow the Product’s Demand

The sudden outbreak of a global emergency initiated by the uncontrolled spread of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) infection. The COVID-19 pandemic has impacted all sections of society and significantly slowed down nations' economical pace. Various countries had introduced combat measures such as the shutdown of industrial operations, nationwide lockdowns, and social distancing policies affecting the financial conditions of various sectors.

Furthermore, the pandemic has also significantly affected the global bio CHP market growth as numerous small and medium players have faced severe problems such as deficits in overall income, a steep decrease in energy demands, and delays in project executions. For example, in November 2020, Bert Energy GmbH, a German franchisor for Bert biogas systems, disclosed that its Bert Mobil biogas demo plant was scheduled to be commissioned at Sri City Andhra Pradesh, India, was delayed by over six months owing to the coronavirus outbreak. The company also stated that about 80% of the work was completed till March 2020, before the pandemic stopped the world.

LATEST TRENDS

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Construction of Manufacturing Plants is a Key Trend

Various players operating in the industry are inclined to explore the new potential and set up advanced CHP plants. New electrical generating projects powered with different fuel sources primarily across developing and unexplored areas are set to provide lucrative opportunities to harness the technology’s actual potential. For instance, in June 2020, Hebei Baoding Dongfang Paper Milling Company, an operating subsidiary of the Chinese paper mill company called IT Tech Packaging Inc., declared its plans to build a biomass-fueled CHP project. The organization further stated that the new project was approved by the local authorities and is set to be completed by the end of 2021 at the company’s production unit in Wei County, Hebei.

Solid Waste Generation to Fuel Product Demand

Various developed and emerging economies have observed a substantial increase in the rate of urbanization and industrialization. The rapid transformation has led to a massive increase in the waste output from various facilities requiring a dedicated management & disposal program to mitigate the pollution. The generated surplus is likely to propel the growth of the market for bio CHP as the units provide the optimal solution to handle discarded material in bulk and utilize it to serve the heating & cooling needs with energy generated from wastes. For instance, as per the Organisation for Economic Co-operation and Development (OECD), total municipal waste generated by Italy equaled about 30.17 million tonnes in 2018, growing from about 29.57 million tonnes in 2017 year-on-year increase of over 2%.

DRIVING FACTORS

Rapidly Increasing Energy Needs to Propel the Demand for Bio-Based CHP Systems

Energy is a quintessential need to conduct daily operations across every domain. Besides, rapid economic expansions of the countries have increased the total energy consumption multi-folds over the past years. The continuous investments to transform the industrial infrastructure coupled with new developments in residential conditions are set to boost the heat & power demand which will, in turn, augment the global market. For instance, in September 2019, the U.S. Energy Information Administration projected that the total energy consumption is likely to expand by about 50% from 2018 to 2050. The government body further anticipated that the industrial sector is set to hold the largest share of the total intake couped with significant additions in residential and commercial buildings during the period.

Paradigm Shift towards Low Carbon Technologies to Add to the Market Size

Stringent policy framework by various governments and organizations to keep a check on harmful emissions is anticipated to favor the global bio combined heat and power market. Various countries and regional authorities have also introduced substantial objectives to diminish the carbon footprint and reduce the dependency on fossil fuels. For example, as per the International Renewable Energy Agency (IRENA), total renewable energy capacity installed across the globe totaled over 2.53 terawatt (TW) in 2019, observing around a 7.0% increase from 2.36 TW in 2018.

RESTRAINING FACTORS

Significant Initial Cost coupled with Availability of Alternative Technologies

Cogeneration systems powered by biomass fuels and biogas sources at times require additional equipment to enhance the output power to optimal levels. The integration of extra tools such as a special Particulate Matter (PM) filter to maintain efficiency and mitigate operational damages is likely to incur added costs inhibiting the global bio combined heat and power market pace. Additionally, the abundant availability of large-capacity CHP systems running on fuels, including natural gas, oil, and hydrogen, further affects the industry pace.

SEGMENTATION

By Feedstock Analysis

Rising Output of Crop Residues Backs Agriculture Waste Segment

Based on feedstock, the market can be segregated into food waste, plastic waste, agriculture waste, wood waste, animal waste, paper waste, and others. The agriculture waste segment is likely to observe significant growth due to the increasing production of numerous types of crops and the utilization of innovative cultivation procedures for extracting waste residues. Furthermore, the wood waste feedstock is projected to hold a substantial share in the global market for bio CHP due to new plants operating on various wood sources such as pellets, sawdust, chips, and lumber.

Additionally, the food waste segment is projected to exhibit the highest growth rate owing to rapid population increase, generation of huge leftovers of foods, and customer awareness regarding the potential of generating energy from residential wastes. Also, a growing number of livestock and poultry farms producing a large number of manures is likely to complement the animal waste segment.

By Prime Mover Analysis

Better Operational Characteristics to Favor Steam Turbine Segment Growth

Based on the prime mover, this industry can be broadly divided into majorly divided into the steam turbine, gas turbine, microturbine, ic engine, and stirling engine. The steam turbine is set to hold a significant position due to its cost-effective installation and less frequent maintenance needs with long operational life. Furthermore, high load-bearing capacities, fast start-up time, feasible integration across various verticals, and a wide range of output capacities are expected to drive the IC engine segment.

The microturbine prime mover segment is likely to observe substantial growth during the forecast period. The growing demand for small cogeneration systems, primarily within residential and commercial establishments, favors the technology’s demand. Installations of gas turbines are largely augmented by properties such as enhanced efficiency, less emission generation, and availability of sources such as landfill gas and anaerobic digester gas to create the required fuel.

By End-User Analysis

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Manufacturing Industry to Lead the Market Size during the Forecast Period

Based on end-user, the global market of bio CHP is categorized into healthcare, hospitality, commercial buildings, airports, education institutes, recycling facilities, manufacturing industry, waste treatment plant, food & beverage, and others. Increasing deployment of the technology to counter the growing energy demand from various sized production units is likely to add to the manufacturing industry segment growth. Additionally, the healthcare segment is backed by the continuous upgrading of prevailing facilities coupled with the construction of new medical and research & development units.

Stringent policies to enhance energy efficiency and aim to reduce the carbon discharge from establishments will augment the commercial buildings segment. Furthermore, rapidly increasing responsiveness across the industry participants and customers to implement innovative waste management technologies to consume discarded materials is set to aid the waste treatment plant segment growth.

REGIONAL INSIGHTS

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The market has been analyzed geographically across five key regions such as North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. Europe bio CHP market was estimated at USD 1.41 billion in 2020 and is set to hold the leading position during the forecast period. The expansion is attributed to the vast carbon reduction targets, dedicated waste management, and recycling laws, and significant building energy standards & objectives.

The presence of various financial benefit programs, growing organic & inorganic expansion by regional players, and increasing electricity production from clean energy sources are major factors propelling the market in North America. Nations such as Canada and the U.S. have unveiled significant regulations and targets to underpin opportunities for renewable power. For instance, in March 2020, the International Renewable Energy Agency (IRENA) reported that the total production from bioenergy sources in Canada equaled above 10.66 terawatt-hours (TWh) in 2019, growing from about 7.26 TWh in 2018 experiencing an annual increase of over 31.9%.

Asia Pacific is projected to exhibit substantial growth owing to rising investments and acceptance of CHP plants with different capacities across different nations. Besides, the region has observed a rapid increase in the overall energy demand from various verticals due to rapid industrialization and urbanization rates.

KEY INDUSTRY PLAYERS

2G Energy is Focused to Initiate Inorganic Strategic Advancements to Fortify its Portfolio

The global market has observed a significant number of players operating at different stages, such as national, regional, and global levels. The companies are increasingly concentrated on expanding their offerings for better integration in a wide range of applications. Besides, the organizations such as General Electric are also determined to develop other technologies to fortify their industry presence with a strong CHP portfolio.

2G Energy AG, a German cogeneration systems manufacturer, is also striving to strengthen its global foothold by initiating long-term contracts with other players to develop new technologies for CHP units with various fuels. For instance, in November 2019, the company declared an agreement with Rolls-Royce technology group to acquire gas-powered-generator systems for its cogeneration systems. The contract involves delivering 250-550 kW power systems by 2G energy with and without heat extraction technologies to be marketed under the MTU product and solution brand by Rolls-Royce.

LIST OF KEY COMPANIES PROFILED:

• 2G Energy AG (Germany)


• Wärtsilä (Finland)


• Enexor Energy LLC (U.S.)


• Fleetsolve (UK)


• Plant Engineering GmbH (Germany)


• Yanmar (Japan)


• Biomass Engineering Limited (Ireland)


• H3-CHP (Canada)


• Babcock & Wilcox (U.S)

KEY INDUSTRY DEVELOPMENTS:

• February 2020 – Enexor BioEnergy launched its new bio cogeneration technology known as Bio-200 to provide efficient energy utilizing different types of feedstocks such as wood chips, agricultural waste, food waste, and animal waste, among many others. The new system is designed for small-scale applications with 75 kW electric power along with 125 kW thermal energy to provide clean and affordable energy.


• July 2019 – 2G Energy AG declared to receive an order from Siemens AG to deliver hydrogen-powered cogeneration units for a green hydrogen decentralized energy project in Dubai, UAE. The company was chosen to deliver its agenitor 412 system as a fragment of the Arabian Peninsula project.

REPORT COVERAGE

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The global bio CHP market research report includes an elaborative analysis of numerous factors affecting the market. These include opportunities, growth drivers, threats, key developments, and restraints. It further analyzes and defines the market based on different segments such as feedstock, prime mover, and end-user. It strategically analyzes several strategies such as product innovations, alliances, mergers, acquisitions, and joint ventures adopted by key players present in the industry.

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