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Combined heat and power (CHP) is also called cogeneration. This method generating heat and electricity simultaneously. It is a system that recovers lost energy by using the waste heat to provide heat to the power plant or to the buildings which are connected to the power plant through a steam pipe network. The growth in the deployment of CHP technologies need for energy efficiency, and the increasing use of government incentives to promote cogeneration are some of the major factors driving the growth of the CHP market.
CHP is an energy-efficient technology and is preferred over conventional electricity generation methods as it consumes a lesser amount of fuel to produce energy. Moreover, CHP systems avoid transmission and distribution (T&D) losses, ease grid congestion during high electricity demand and eliminate the need for the development of T&D infrastructure. Thus, the power-generating facilities of CHP along with significant economic and environmental benefits are expected to drive market growth during the forecast period.
Based on fuel, the combined heat and power market is segmented into natural gas, coal, biomass, and others. The natural gas fuel segment dominated the global market and was also projected to register the highest CAGR during the forecast period owing to several factors such as abundance availability, low price, clean fuel, easy installation of systems based on natural gas as compared to other fuel types.
Based on technology, the market is segmented into a steam turbine, gas turbine, combined cycle, reciprocating engine, and others. Gas turbine held the major share of the market owing to the replacement of existing coal-fired power stations with modern gas-fired systems to reduce carbon footprint. The reciprocating segment is expected to grow at the highest rate during the forecast period due to the increasingly distributed power generation in various parts of the world.
Based on end-user, the global market is classified into utilities, residential, commercial & industrial. The commercial & industrial end-user segment holds the largest share in the market. The rising development of the small-scale industrial sector coupled with high electricity demand will positively influence business growth. The rise in demand for reliable
and cost-effective technologies along with measures towards carbon footprints will propel the commercial CHP market.
CHP is receiving huge support from several governments around the world in the form of favorable policies and incentives. Governments in different regions are promoting cogeneration technology through various long-term policies, and financial incentives that drive the market in the upcoming period. However, high initial investment is the major factor that can hinder the combined heat and power market growth in the coming years.
Key Market Driver -
Supportive Government Incentives and Policies
Key Market Restraint -
High Initial Investment
Some of the major companies in the combined heat and power (CHP) market are Wärtsilä Corporation, ENER-G Rudox, AN Diesel & Turbo, General Electric, Mitsubishi, Kawasaki, Bosch Thermotechnology, Viessmann Werke, FuelCell Energy, MWM, Cummins, Veolia, BDR Thermea, CENTRAX Gas Turbines, 2G Energy Services, ABB, 2G Energy, and Siemens AG
The global combined heat and power market are studied across different regions like North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. Europe & North America are the major regions for of global market. Favorable state incentives, resiliency initiatives, policies, and CHP-inclined environment regulations are some of the key factors driving the growth of the market. Recently the U.S. government announced an updated program Self-Generation Incentive Program (SGIP) across gas generation projects to enhance adoption of renewable fuel owing to a minimum blend of fuel mixture by 50% renewables.
In terms of revenue, the Asia Pacific region is expected to contribute significantly during the forecast period. Rapid industrialization and urbanization and increasing demand for clean fuel energy will boost the growth of the market in the region. Also, stringent norms to reduce carbon emission along with decentralized power generation will propel the market growth in the region.
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