The global Combined Heat And Power (CHP) market size was valued at US$ 26.98 billion in 2023 and is expected to reach US$ 48.69 billion by 2030, grow at a compound annual growth rate (CAGR) of 8.8% from 2023 to 2030. CHP, also known as cogeneration, is the simultaneous production of electricity and heat from a single fuel source such as natural gas, biomass, biogas, coal, waste heat, or oil. The technology can result in substantial energy savings by utilizing the waste heat that is normally rejected to the atmosphere in conventional power generation systems. CHP systems are highly efficient and make use of these captured heat energy streams for heating or cooling purposes in residential, commercial and industrial applications. The Combined Heat And Power Market is segmented by fuel type, capacity, technology, application, and region. By fuel type, the natural gas segment held the largest share of the market in 2022. Natural gas-fired CHP systems are widely adopted due to their low emissions, high efficiency, ease of availability, and low cost.
Combined Heat And Power (CHP) Market Regional Insights
- North America is expected to be the largest market for Combined Heat And Power Market during the forecast period, accounting for over 25.2% of the market share in 2022. The growth of the market in North America is attributed to the increasing adoption of CHP systems in commercial, institutional and industrial applications driven by incentives, policy support, and growing awareness about energy efficiency.
- The Asia Pacific market is expected to be the second-largest market for Combined Heat And Power Market, accounting for over 40.5% of the market share in 2022. The growth of the market in the region is attributed to rapid industrialization and urbanization, rising energy demand, and government policies supporting CHP adoption.
- The Middle East & Africa market is expected to be the fastest-growing market for Combined Heat And Power Market, with a CAGR of over 8.5% during the forecast period. The growth of the market in the region is attributed to increasing investment in new power generation capacities and focus on enhancing energy efficiency and security.
Figure 1. Global Combined Heat and Power (CHP) Market Share (%), by Region, 2023
Combined Heat And Power (CHP) Market Drivers:
- Increasing energy efficiency and cost savings: CHP systems can achieve efficiencies of up to 90%, providing substantial cost savings compared to separate heat and power systems. The rising energy prices globally is encouraging industries and commercial sector to adopt CHP systems.
- Supportive government policies and incentives: Governments across major countries are providing financial incentives, funds, and beneficial policies to drive CHP adoption. This includes investment subsidies, tax reductions, low interest loans, etc.
- Growing environmental concerns: CHP systems significantly reduce CO2 and greenhouse gas emissions compared to conventional power generation. The emphasis on reducing carbon footprint and shift towards renewable energy sources is positively influencing the market growth.
- Rapid industrialization in emerging economies: The ongoing rapid industrialization and commercial development in emerging economies such as China, India, Indonesia, etc. is escalating the demand for reliable and efficient power and heating technologies like CHP.
Combined Heat And Power (CHP) Market Opportunities:
- Waste heat recovery applications: Waste heat recovery CHP systems provide enormous opportunity to improve energy efficiency in energy-intensive industries. This allows capturing waste thermal energy from sources such as exhaust gases, flue gases, etc. and converting it into useful energy.
- Transition from conventional fuels: The transition from conventional fossil fuels to renewable fuels such as biomass is creating substantial opportunities for renewable-based CHP systems integration with industries having biomass waste streams.
- Residential micro-CHP systems: The emergence of micro-CHP units designed specifically for small residential buildings and households provide opportunities for wider penetration in the residential sector.
- Grid stability and resilience: CHP systems enhance electricity grid stability, provide backup power generation and improve resilience in times of power outages. This is creating opportunities for CHP adoption by critical facilities such as hospitals, data centers, etc.
Combined Heat And Power (CHP) Market Report Coverage
| Report Coverage |
Details |
| Base Year: |
2022 |
Market Size in 2023: |
US$ 26.98 Bn |
| Historical Data for: |
2018 to 2021 |
Forecast Period: |
2023 - 2030 |
| Forecast Period 2023 to 2030 CAGR: |
8.8% |
2030 Value Projection: |
US$ 48.69 Bn |
| Geographies covered: |
- North America: U.S. and Canada
- Latin America: Brazil, Argentina, Mexico, and Rest of Latin America
- Europe: Germany, U.K., Spain, France, Italy, Russia, and Rest of Europe
- Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
- Middle East & Africa: GCC Countries, Israel, South Africa, North Africa, and Central Africa and Rest of Middle East
|
| Segments covered: |
- By Fuel Type: Natural Gas, Coal, Biomass, Others
- By Capacity: Up to 10 MW, 11 MW – 100 MW, 101 MW – 250 MW, Above 250 MW
- By Technology: Combustion Turbine, Steam Turbine, Microturbine, Reciprocating Engine, Fuel Cell, Others
- By Application: Commercial, Residential, Industrial, Utilities
|
| Companies covered: |
Wartsila, Siemens, GE, 2G Energy, Aegis Energy Services, Bosch Thermotechnology, Kawasaki Heavy Industries, Viessmann Werke, FuelCell Energy, Veolia, Clarke Energy, CAPSTONE TURBINE, Caterpillar, Yanmar, ABB, Edina, Wolf GmbH, Atlas Copco, Tecogen Inc.
|
| Growth Drivers: |
- Increasing energy efficiency and cost savings
- Supportive government policies and incentives
- Growing environmental concerns
- Rapid industrialization in emerging economies
|
| Restraints & Challenges: |
- High initial costs
- Lack of infrastructure
- Regulatory uncertainty
|
Combined Heat And Power (CHP) Market Trends:
- Hybrid CHP systems: The growing trend of utilizing hybrid CHP technology that combines two or more energy generation methods into one integrated system provides higher efficiency and flexibility.
- Smart CHP systems: Integration of digital technology such as AI, IoT, big data analytics, etc. into CHP systems to develop smart, connected CHP systems that provide better monitoring, control, and optimization.
- Growing distributed generation: The shift towards distributed power generation models is driving the adoption of CHP systems by commercial and industrial establishments to meet their local energy needs.
- Biomass-based CHP: Using biomass and waste materials as a fuel for CHP systems is gaining increased focus as it provides clean, renewable energy generation.
Combined Heat And Power (CHP) Market Restraints:
- High initial costs: The significant upfront capital investment required to install CHP systems is a major barrier, especially for smaller commercial and industrial entities.
- Lack of infrastructure: Insufficient infrastructure such as district heating networks, gas pipelines, biomass supply chains, etc. in several regions hampers the adoption of CHP technology and scaling up capacities.
- Regulatory uncertainty: Inconsistencies in regulations related to grid interconnectivity standards, revenue models, etc. across different states create an unfavorable environment for new investments in CHP projects.
Recent Developments
New product launches
- In March 2022, 2G Energy AG launched a new CHP plant series named BiogasMaster for optimized biogas applications up to an electrical output of 463 kWe. It provides high fuel efficiency up to 90%.
- In January 2022, Yanmar launched two new large-scale gas engine CHP systems having output of 1.8MW and 2.8MW respectively. They have high total system efficiency and low emissions.
- In June 2021, Manufacturer Clarke Energy and partner INNIO announced the launch of a 2 MW CHP system operating on a hydrogen blended fuel mix. This demonstrates the viability of hydrogen-ready CHP plants.
Acquisition and partnerships
- In June 2022, FuelCell Energy acquired 5.7 MW project including CHP plant from Pfizer. This expanded its capacity and allows use of CHP technology to provide steam and power.
- In November 2021, Capstone Green Energy Corporation partnered with Biogas Fuel Cell Energy to drive CHP adoption using renewable biogas from wastewater treatment plants in Italy.
- In April 2021, Aurelius along with Attero NH acquired Econergy, an operator of biomass and biogas-fueled CHP plants. The acquisition helped in expanding presence in sustainable energy solutions.
Figure 2. Global Combined Heat and Power (CHP) Market Share (%), by Fuel Type, 2023
Top companies in Combined Heat And Power (CHP) Market
- Wärtsilä
- Siemens
- GE
- 2G Energy
- Aegis Energy Services
- Bosch Thermotechnology
- Kawasaki Heavy Industries
- Viessmann Werke
- FuelCell Energy
- Veolia
- Clarke Energy
- CAPSTONE TURBINE
- Caterpillar
- Yanmar
- ABB
- Edina
- Wolf GmbH
- Atlas Copco
- Tecogen Inc.
- Innovate Steam Technologies
*Definition: Combined heat and power (CHP), also known as cogeneration, refers to the simultaneous generation of electricity and useful thermal energy from a single fuel source such as natural gas, biomass, biogas, coal, oil etc. CHP systems utilize the heat that is normally wasted in conventional power generation, and recycled it to provide heating or cooling across residential, commercial and industrial applications.
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