District Heating Market Size, Share & Industry Analysis, By Heat Source (Coal, Natural Gas, Renewables, Oil & Petroleum Products, and Others), By Plant Type (Boiler, CHP, Others), By Application (Residential, Commercial, Industrial), and Regional Forecast, 2019 - 2026

The global district heating market size was USD 172.83 Billion in 2018 is projected to reach USD 237.53 Billion by 2026, exhibiting a CAGR of 4.11% during the forecast period.

The district heating systems are the systems in which heat is generated in the form of hot water or steam, and from that producing station, it is distributed to the desired end-use locations via insulated pipes. The main components of any district heating system are production, distribution, and consumption. The distribution lines laid are the major part of the heat network after the production of heat. Production of heat is carried out using pumps, boilers or combined heat and power systems. Individual heating systems installed for satisfying the personal heat demand require fuel separately, and also the capital cost has to be incurred by the consumer.

But in case of the district heating, the fuel which is used for heat generation is used centrally in large quantities, and a central distribution system is laid which provides continuous energy and depending upon the need the consumer uses the supplied energy and pays for the same. This avoids the cost incurred in individual systems and also reduces the greenhouse gases released during combustion at individual levels as the energy is generated centrally.

District heating systems also provide the flexibility of using different types of fuel for heat generation. The various types of fuels used in district heating systems are coal, natural gas, renewables, oil, and petroleum products, and others. District heating can utilize both boilers and combine heat and power systems which therefore enables electricity generation in conjugation with the heat energy produced. 

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There has been an increase in the new district heating systems being set up across various countries. As Europe occupies most of the market with the low-temperature condition in the region for the year. The maximum installations for the district heating systems have been from Europe. After Europe, the countries in Asia Pacific have also gained pace with China amongst the top countries in the installations. The district heating market has also seen a significant growth rate in the North America and with numerous plants planned to be set up in various countries around the world the market will grow at a lucrative growth rate over the given forecast period. 

MARKET DRIVERS

“Increasing demand for energy along with steps to reduce carbon emission will propel the adoption of district heating systems”

The increasing demand for energy with the rising population and urbanization has seen new construction being undertaken in various sectors. The district heating systems produce the heat centrally in the form of hot water or steam, which is further used for heating purposes in various sectors.  The low temperature districts in different parts of the world have now adopted the district heating systems to ensure space heating at lower costs.

 Also, the growing concerns regarding the carbon emissions have seen the governments favor the adoption of district heating systems. These factors will augment the district heating market growth over the given forecast period.

 “Flexibility in the source of heat generation and cost-effectiveness will augment the growth of the  market.”

The flexibility in the type of fuel used for energy generation is the other advantage of district heating systems. These act as a cost-effective measure for energy production and also reduce greenhouse gases by allowing the usage of renewable sources of energy. The locations around the world which are in cold temperatures for the most part of the year require district heating. In recent years, the adoption of district heat network has substantially increased in regions such as Europe, North America, and Asia Pacific.

SEGMENTATION

By Heat Source Analysis

“Natural gas-powered district heating systems to  hold the largest share during the given forecast period.”

As the trend of power generation has shifted away from the fossil fuels mainly taking the environmental factors into consideration, the natural gas has slowly acquired a good percent of market share in the global district heating market. The various advantages of natural gas like lower costs and fewer carbon emissions with excellent efficiency have driven the growth of this segment. Also, increasing exploration activities in each region for natural gas is another factor for the increasing adoption of these systems.

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The renewable sources of energy like wind and solar have also gained pace in recent years. There has been a shift toward solar energy in many countries. But as the district heat network serves a large number of people and renewables being a new entrant in the field have a low market share as compared to natural gas. In terms of installed capacity, the district heat produced using natural gas is higher as compared to the district heat produced using renewables. But the revenue generated using renewables is high as compared to natural gas owing to the high cost of renewables. This trend is set to continue with the share for the renewables to increase at a steady rate.

By Plant Type Analysis

“Combined heat and power plants (CHP) with the advantage of simultaneous electricity generation are anticipated to exhibit significant growth.”

The heat for the district heating network is mainly produced using boilers and the combined heat and power plants. The boilers have been used for a long time now for the heat generation purpose. But with the introduction of the combined heat and power systems, the district heating market share for boilers has seen a decline in many operating regions of the district heat network. The advantages provided by the combined heat and power systems have been the major factor in the growth of their market share in recent years. Firstly, the ability of the combined heat and power systems to generate heat and electricity simultaneously has been the major factor driving the growth.

The demand for electricity has also been on a rise which is the other reason impacting the growth of combined heat and power systems. Combined heat and power systems have high efficiency as compared to the traditional boilers. These systems reduce the costs as they avoid distribution and transmission losses. Also, these require less fuel to produce the same amount of energy as produced by the boilers. Also, support from governments promoting the utilization of the combined heat and power systems has helped the increased adoption of these systems.

By Application Analysis

“Increasing deployment in the residential sector, along with smart building programs.”

In terms of the application of the global district heating market, the residential segment holds the largest market share owing to the requirement of the space heating in houses. The major part of the heat demand comes from the residential sector to keep the house warm and use hot water for various activities. There has also been a rise in the number of new constructions coming up in countries all over the world owing to the increasing urbanization. With the rising number of houses, the individual space heating practices get adopted and therefore leading to higher carbon emissions, and increased fuel utilization as the systems are used to satisfy individual demand.

The district heating acts as the proper solution for meeting the residential space heating demand by producing heat centrally and distributing it through insulated pipes. This curbs carbon emission to a great extent, allowing the usage of renewables on a large scale and acts as a cost-effective solution for satisfying the space heating demand as the consumers have to pay only for the units used, and they avoid the initial investment cost which rather they would have to pay in case of personal space heating installations.

REGIONAL ANALYSIS

North America currently is increasing its district heating capacity and is anticipated to emerge as a major region in the global district heating market during the given forecast period. The growth of the region can be seen with the increase in the district heating capacity installations of the last years. This region has a large percentage of its district heating plants operating on natural gas owing to the ongoing increasing gas exploration activities.

The market in Asia Pacific is also expected to rise in the market. China is the major player in the region and accounts for the largest share in the market in this region. The Northern part of China which is in low temperatures for most time of the years has been the area for the maximum deployment of the district heating plants. Other countries like South Korea have also seen an increase in the installed capacity of the district heating. These factors are expected to increase the district heating market size in Asia Pacific during the forecast period.

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Europe is projected to witness significant growth in the global market. Europe currently holds the maximum market for district heating systems. The low temperatures observed in countries for most time of the year and the increased steps taken by various governments in the region to reduce the carbon emission have been the driving factors for the growth of the market in the region. The major countries in the region are Russia, Denmark, Switzerland, Finland, the Czech Republic.

The Rest of the world would witness slow growth in this market as the district heating system is a new concept, and countries have now started to deploy the district heating systems as a cost-effective measure for power in the country.  

INDUSTRY KEY PLAYERS

“Market Players like Ramboll, Danfoss Group, Helen, Veolia, GE, COWI, Statkraft, Uniper, would ensure to strengthen the market position with respect to providing district heating solutions to the people”

The district heating market is highly fragmented with the presence of lots of competitive players around the world. Ramboll, Danfoss Group, Veolia together form a major portion for providing the district heating system in the world.

List of Key Companies Profiled:

• Danfoss Group


• Ramboll


• Dall Energy


• Veolia


• Helen


• Alfa Level


• GE


• COWI


• Statkraft


• Uniper


• ENGIE


• ABB


• Kelvion


• GRUNDFOS


• E.on Energy Services NA


• FVB Energy Inc.


• NextGen Heating

REPORT COVERAGE

A growing trend observed in the penetration of the district heating market across all sectors.

The report provides qualitative and quantitative insights on the global market and detailed analysis of this market size & growth rate for all possible segments in the market. The global district heating industry is segmented by the heat source, plant type, application, and geography. Based on the heat source, the global market is classified into coal, natural gas, renewables, oil & petroleum products, and others. By plant type, the global market is bifurcated into the boiler, CHP, and others. Based on the application, the market is segmented into residential, commercial, and industrial. Geographically, the global market has been analyzed across four major regions, which are North America, Europe, Asia Pacific, and the rest of the world. These regions are further categorized into countries.

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Along with this, the report provides an elaborative analysis of the global district heating industry dynamics and competitive landscape. Various key insights presented in the report are the price trend analysis, recent industry developments in that market, such as mergers & acquisitions, the regulatory scenario in crucial countries, macro, and microeconomic factors, SWOT analysis, and key retail industry trends, competitive landscape and company profiles.

Report Scope & Segmentation

INDUSTRY DEVELOPMENT:

• In August 2019, A new £6 million project was launched by first minister Nicola Sturgeon which is named Stirling district heat network project. The project was developed in collaboration by Scottish water horizons and Stirling council. The project is first of its kind and will be providing affordable and low carbon heat to the local Stirling community. 


• In August 2019, The Canadian government announced its decision to fund the biomass expansion project being carried out by the University of British Columbia’s. The total funding by the government would be $7.6 billion, to increase the university’s renewable energy capacity.  UBC also told about the investment I would be making for the 12MW biomass-fuelled hot water consumption boiler.


• In May 2019, CNIM a French International Industrial equipment manufacturer and integrator entered into an agreement regarding the energy efficiency optimization at the waste to energy plant serving sites in cities of Nantes and Saint Nazaire. Under the agreement, CNIM will install an absorption heat pump to boost the supply of hot water to Nantes.