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The expected reusability of byproducts and economic/environmental benefits will drive demand for combined heat and power systems, expanding their market.
ROCKVILLE, MD, UNITED STATES, September 28, 2023 /EINPresswire/ -- According to a report from Fact.MR, the global sales of combined heat and power (CHP) systems reached a total of US$ 20.17 billion in 2023 and are projected to increase to US$ 29.86 billion by the close of 2033. The CHP systems market is anticipated to grow at a compound annual growth rate (CAGR) of 4% over the next decade, presenting an absolute dollar opportunity of US$ 9.68 billion.
Cogeneration, also known as combined heat and power systems, encompasses a suite of technologies primarily aimed at simultaneously generating both usable heat and electricity. Thanks to the heightened energy efficiency, reduced operational expenses, minimal CO2 emissions, and other advantages inherent to combined heat and power systems, this concurrent production of usable heat and electricity is significantly more efficient than separate generation processes for each.
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Efficient and Eco-Friendly Energy Generation: The Rise of Combined Heat and Power Systems in Industry
The merging of heat and power represents an efficient and environmentally friendly approach to generate both thermal and electrical energy using the same fuel source. One of the advantages of cogeneration systems compared to conventional practices is the reduction in costs within industrial operations due to decreased redundant energy consumption. The market is being propelled by the utilization of waste materials, leading to energy savings and cost reductions.
The adoption of combined heat and power systems in industrial settings is expected to grow at a compound annual growth rate (CAGR) of 4.1% over the next decade. In industrial facilities, these systems generate both heat and power and rely primarily on natural gas, biomass, or coal as their fuel sources. Installing CHP systems in industrial applications offers several benefits, including operation without the need for additional fuel, low upfront and maintenance expenses, and the production of heat as a byproduct.
CHP technology boasts minimal geographical constraints and can be swiftly deployed. Ongoing efforts to reduce reliance on coal-based power plants and the implementation of cleaner energy generation technologies to mitigate rising emissions are driving the expansion of this market.
Key Companies Profiled
- General Electric Company
- Siemens AG
- 2G Energy Inc.
- Tecogen Inc.
- Generac Holdings Inc.
- Capstone Turbine Corporation
- Aegis Energy Services, Inc.
- Cummins Inc.,
- Primary Energy Recycling Corporation
Rising Demand for CHP Systems Driven by Energy Efficiency Requirements
In recent years, there has been a significant surge in demand for combined heat and power (CHP) systems, primarily due to the growing need for energy-efficient solutions across various industries. Unlike conventional power plants, which typically operate at an efficiency rate of around 45%, CHP facilities boast an impressive 80% efficiency, leading to notable reductions in operational expenses.
To combat energy wastage within the power sector, manufacturers are increasingly integrating artificial intelligence (AI) and the Internet of Things (IoT) into CHP facilities. This trend is poised to further amplify the demand for CHP systems in the coming years. According to the International Finance Corporation (IFC), AI holds the potential to significantly reduce energy wastage, decrease costs, and promote the utilization of renewable energy sources within global power grids.
The Environmental Protection Agency (EPA) recognizes the technical and cost-effectiveness advantages offered by CHP systems, making them a viable solution for power generation in various settings, including residential and commercial buildings, municipal facilities, institutions, and manufacturing plants.
Notably, advanced economies are at the forefront of harnessing AI within the power sector, and this leadership is expected to create lucrative opportunities for CHP system manufacturers worldwide. For instance, DeepMind, a subsidiary of Google, is employing machine learning algorithms to accurately predict power output up to 36 hours in advance, further highlighting the innovative potential of AI in this field.
Surging Electricity Demand Fuels Market Growth
The relentless pace of industrialization is propelling the need for electricity to new heights. Consequently, there is a projected surge in the demand for combined heat and power systems in the foreseeable future.
In response to the escalating need for electricity, governments across the globe are increasingly focusing on renewable energy sources. The expansion of the market is being propelled by the availability of advanced power generation technologies, a growing appetite for natural gas-fired power plants, the transformative effects of the shale gas revolution, and concerted efforts to reduce carbon dioxide emissions.
Initiatives by Multiple Governments Aimed at Mitigating Carbon Emissions
The adverse consequences of excessive carbon emissions, including environmental damage, rising temperatures, and sea-level elevation, have prompted various governments and corporate entities to make ongoing efforts towards curbing these emissions. Their goal is to employ advanced, environmentally-friendly, and sustainable energy technologies in order to reduce the burgeoning carbon footprint, a trend that is expected to stimulate market growth.
In terms of performance, combined heat and power units have proven to be highly effective. These units are capable of generating power to support the grid while achieving an impressive efficiency rate of over 85%. This efficiency serves to meet the growing demand for hot water and space heating and cooling, further contributing to carbon emissions reduction.
Insights by Country
Rising Government Support Spurs Growth of CHP Systems in Data Centers
In 2023, the United States witnesses a significant surge in the adoption of combined heat and power (CHP) systems, with an estimated market value of $3.8 billion. This uptick can be attributed to the growing support from government initiatives aimed at promoting CHP system installations within data center facilities, as well as an escalating demand for energy-efficient and dependable space heating solutions. Moreover, the market benefits from an increase in industrial establishments, cost-effective funding programs and incentives, promising advancements in research and development endeavors, and stringent environmental regulations.
Insights by Category
The Increasing Utilization of Natural Gas in CHP Systems for Reduced Environmental Impact
The energy market can be categorized into different fuel sources, including natural gas, coal, biomass, and other renewable resources.
Among these, natural gas-powered combined heat and power (CHP) systems stand out with a commanding 63% share of the global market. This dominance is attributed to several advantages, including ease of transportation and a lower carbon footprint.
Natural gas is considered the optimal fuel for CHP technology due to its exceptional efficiency and the continuous growth in its global production. Governments worldwide are actively promoting the integration of cleaner fuels into their energy portfolios, which is expected to drive up the demand for natural gas in the years to come.
The wide availability and affordability of natural gas make it an ideal choice for use in combined heat and power systems. Consequently, the growth rate of coal-based CHP systems is anticipated to decelerate as natural gas-based alternatives become more prevalent. Furthermore, stringent government regulations and carbon emission targets are compelling decision-makers to favor cleaner fuels like natural gas in their energy strategies.
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The Competitive Environment
Prominent providers of combined heat and power systems are actively forging critical partnerships and collaborations to participate in innovative ventures and unveil cutting-edge products. Their primary goal is to offer a diverse array of combined heat and power solutions for a global network of power plants.
Leading corporations are channeling significant investments into comprehensive research and development endeavors aimed at crafting environmentally sustainable systems. Their key areas of focus include stringent quality control measures, product standardization, and pioneering innovations, all geared towards expanding their customer base and cementing their market dominance.
As an illustration:
- In 2019, EC Power joined forces with Lochinvar to introduce a co-generation solution tailored for the North American market.
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