Combined Heat And Power Market

According to Stratistics MRC, the Global Combined Heat and Power Market is accounted for $27.66 billion in 2021 and is expected to reach $46.71 billion by 2028 growing at a CAGR of 7.8% during the forecast period. Combined Heat and Power (CHP) produces heat and electricity in a particular procedure. It is stated as cogeneration. By burning numerous fuels like oil, natural gases, and biofuels, this method is processed. This method signifies a series of dependable and cost-effective technologies to meet the global heat and electricity demand.



Market Dynamics:

Driver:

Government Programs and Incentives

Government programs and incentives, particularly in OECD countries such as the US, UK, Germany, Japan, and others, are expected to drive the growth of the market. In 2012, the US passed a new policy for the promotion of CHP for energy efficiency; the then-President of the US signed an executive order for energy efficiency in industries. The US federal government and several state governments have doled out incentives and tax rebates for CHP installations. The order directs the US departments of energy, commerce, and agriculture and the Environmental Protection Agency (EPA) to coordinate actions for providing commercial and technical assistance to states for promoting investments in industrial energy efficiency. In February 2018, the US Congress passed a bill to extend a 10% tax incentive for industries implementing CHP in their facilities to promote energy efficiency.

Restraint:

Rising Installation and Maintenance Costs 

One of the biggest drawbacks of installing a CHP plant is the high initial capital cost required for installation. Additionally the power generation equipment such as prime mover, generator systems, and others, CHP plants also require additional equipment such as heat exchangers, absorption chillers, boilers, and other equipment. The cost of a conventional CHP plant can be almost 240% more than that of the cost of a power generation plant of the same capacity and prime mover, making it a major restraint for the combined heat and power market. Maintenance costs of CHP systems are also high due to the complex assembly of the system, which includes different components such as prime mover, heat recovery system, and heat and steam pipes. Regular maintenance of all the components is needed to achieve high efficiency of the CHP, which raises the overall maintenance costs.

Opportunity:

Increased Trend of Distributed Power Generation

Distributed generation is defined as creating power close to or at the point of its use. Electricity was previously delivered through small power plants with low-voltage DC-based power distribution. Distributed generation can be used for electric supply and mechanical work .Distributed generation systems are defined as stationary or mobile systems with less than 100 MW in capacity. Distributed generation differs from centralized power generation, where much higher capacity generation takes place far away from the point of use, with the plants always stationary. Gas turbines are a vital part of the current suite of distributed power generation technologies, which also include reciprocating engines, solar panels, wind turbines, and fuel cells. The higher efficiency of gas turbines and reliable generation capacity give them an edge over other distributed generation technologies for providing backup power capacity and onsite generation needs. Hence, the rise of distributed power generation represents a major opportunity for the market.

Threat:

Damage to Prime Movers Due To Impurities in Biogas Fueled CHP Plans

One of the major challenges in CHP plants is understanding the significance of gas pre-treatment and developing a strategy for it. Biogas-fuelled CHP systems have prime movers, such as a gas turbine, a micro gas turbine, a reciprocating engine, or a Stirling engine, and operate by oxidizing methane in a combustion chamber. This generates thermal energy and drives a piston or turbine, and the resulting shaft work is converted to electricity in a generator. Methane is oxidized electrochemically by fuel cells when they operate, and in most cases, methane is the primary fuel in each prime mover. Biogas also has nitrogen (N2) and carbon dioxide (CO2), which generally do not damage the prime mover. However, they dilute the fuel and reduce the performance. Trace impurities such as hydrogen sulfide (H2S), carbon monoxide (CO), and ammonia (NH3) have more adverse effects on the prime mover. Sulfur dioxide (SO2) and sulfuric acid (H2SO4) are formed by the oxidation of H2S, resulting in corrosion and breakdown of the prime mover. In the combustion chamber, siloxanes can be oxidized to form silicon dioxide (SiO2, solid phase), which causes a detrimental effect on the turbine and piston. Even though the prime mover can handle a small amount of these impurities, a higher concentration of impurities reduces the life of CHP to just a few years.

Natural Gas segment is expected to be the largest during the forecast period

The natural gas segment is going to have largest growth during the forecast period, as natural gas is generally used in gas engines for electricity generation, and it burns cleaner and has low carbon emissions associated with other types of fuels. It also emits low levels of nitrogen oxide, sulfur dioxide, and particulate matter.

The Gas Turbine segment is expected to have the highest CAGR during the forecast period

A gas turbine is a type of internal combustion (IC) engine where inlet air is compressed and sprayed with fuel. The mixture is thereafter ignited in a combustion chamber and allowed to flow at high temperature and pressure through the turbine. The gaseous mixture passes through the turbine nozzles, which further channelize the kinetic energy of the hot air flow onto the blades. The turbine blades, which are mounted on a rotor, rotate with the impact of the high-velocity air. The rotary motion is used to turn a shaft, which performs tasks such as driving an electric generator. Gas turbines are used for power generation and in the mechanical drives used by oil & gas and other industries.

Region with largest share:

The Asia Pacific is projected to hold the highest market share. The existence of large scale manufactures in Asia Pacific countries such as India, China, South Korea, and Japan is expected to drive this province’s demand. The governing bodies of countries such as India and China are pledged towards a growing share of the clean energy mix to reduce the emission levels. Besides, the government in some of the Asia Pacific countries are also supporting combined heat and power installations through various policies and research and development initiatives. These factors will lead to the growth of the market for combined heat and power installations in the APAC region in the future. Rapid industrialization, urbanization, and also economic growth in the province that leads to the installation of CHP systems in emerging economies, infrastructural expansions in India and China, on-going power generation projects, technological innovations, large investments in big new gas-fired cogeneration plants as well as large coal-fired plants, growing need for electricity, the region being the largest energy consumer globally with India and China leading the growth in consumption and power generation, rapid economic growth in China, the transition to gas-fired power generation from coal-based generation, the existence of various large scale manufacturers in Japan, South Korea, China, and India, a growing share of clean energy mix for reducing the emission levels, and governments in some countries in the region supporting the installation of CHP through different R&D initiatives and policies are adding to the global combined heat and power market growth in the region.

Region with highest CAGR:

Europe is projected to have the highest CAGR, Europe is going to have high growth during the forecast period, owing to the accessibility of natural gas in Europe is very easy which makes installation easier and cost-effective. Due to the innovations and manufacturing centres in Germany, the Netherlands, and the U.K, Europe is considered to be a global leader in the micro-CHP engine which is boosting the demand for market growth. Europe is expected to be the leading factor for growing installations of CHP plants across the region. Countries such as Finland and UK are expected to drive the installation of congregation equipment, which can be used for thermal and electrical purposes. Furthermore, tax incentives offered by governments of Germany and Denmark for congregation equipment will give the regional CHP market the much-needed impetus. The presence of the biggest cogeneration power plants in the world, the availability of natural gas being very easy in the province that makes the installation process cost-effective and easier, the presence of manufacturing centers and innovations in the UK, the Netherlands, Italy, Germany, and Belgium, the region being a global leader in micro-CHP engine, and strict government regulations for curbing pollution levels in France, the UK, and Germany are adding to the global combined heat and power market growth in the region.



Key players in the market:

Some of the key players profiled in the Combined Heat and Power Market ABB Limited, Bosch Thermotechnology Ltd, Caterpillar Inc., Cummins, ENER-G Rudox, General Electric, MAN Diesel & Turbo SE, Mitsubishi Heavy Industries Ltd, Veolia.

Key developments:

In January 2020: Veolia announced that it had signed a contract with Total Fitness to install CHP units across 17 health and fitness facilities in the north of England and Wales. Veolia will assist Total Fitness in achieving a 32% reduction in gas consumption and a 22% increase in electrical efficiency.

In April 2021: In April 2018, GE signed an agreement with GreenTech to supply 21 Jenbacher gas engines for CHP generation in Russian food & beverage, glass, agriculture, and chemical processes industries. With a total capacity of 26 MW, the engines were delivered by the end of 2018.

In December 2021: Caterpillar announced that it had extends range of containerized CHP solutions that lower energy costs, increase resiliency and support sustainability initiatives. The solutions support strategic enterprise goals by reducing total energy costs, increasing energy resiliency, and driving sustainability initiatives forward.

Capacity’s Covered:
• Up to 10 MW
• 10-150 MW
• 151-300 MW
• Above 300 MW

Fuels Covered:
• Biogas/biomass
• Coal
• Diesel
• Natural Gas
• Nuclear
• Others Fuel

Products Covered:
• Large Scale
• Medium and Small Scale  

Technology’s Covered:
• Combined Cycle
• Fuel Cell
• Gas Turbine
• Micro CHP
• Microturbine
• Reciprocating Engine
• Spark Ignition Reciprocating Engine
• Steam Turbine
• Others Technology

End Users Covered:
• Residential
• Commercial
• Industrial  

Regions Covered:
• North America
o US
o Canada
o Mexico
• Europe
o Germany
o UK
o Italy
o France
o Spain
o Rest of Europe
• Asia Pacific
o Japan       
o China       
o India       
o Australia 
o New Zealand
o South Korea
o Rest of Asia Pacific   
• South America
o Argentina
o Brazil
o Chile
o Rest of South America
• Middle East & Africa
o Saudi Arabia
o UAE
o Qatar
o South Africa
o Rest of Middle East & Africa

What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2020, 2021, 2022, 2025 and 2028
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements

Free Customization Offerings:
All the customers of this report will be entitled to receive one of the following free customization options:
• Company Profiling
o Comprehensive profiling of additional market players (up to 3)
o SWOT Analysis of key players (up to 3)
• Regional Segmentation
o Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
o Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances