Combined Heat & Power (CHP) Market - Global Industry Analysis (2018 - 2020) - Growth Trends and Market Forecast (2021 - 2026)

Given the exacerbating condition of the global environment and the not-so-subtle impacts of this change in climate on our surroundings, the need to mitigate rising carbon emissions is rapidly becoming an objective that must be met. As such, a growing number of countries worldwide are now looking to integrate and implement sustainable, clean, and highly efficient technology. Combined heat & power solutions are highly efficient in terms of overall performance. These units can cater to the growing demand for space heating and cooling as well as hot water while supplementing electricity to the grid.

Combined heat & power systems can achieve an efficiency of 85%. these factors are expected to fuel the combined heat & power market further. As per the UK government’s Department of Business, Energy, and Industrial Strategy, combined or cogeneration systems can reduce carbon discharge by up to 30% compared to conventional technologies. This global market is expected to index a value of US$26.9 Bn by 2026, at a projected CAGR of 6.2%.

Key Research Insights

• The global combined heat & power market was valued at US$19.1 Bn in 2020
• In 2020, Europe accounted for 39% of the global combined heat & power market
• High initial investments may hinder market expansion prospects
• Natural gas to remain a frontrunner energy source (45%)

Government Subsidies and the Use of Natural Gas to bolster Growth

The implementation of favourable policies, programs, and subsidies by respective governments to promote the use of CHP units. These units can use both gas and biomass as fuel. Owing to the implementation of the latest technologies, they function within the confines of emission control standards with improved efficiency. Additionally, the use of natural gas has remained a primary part of these systems and is a choice that is often adopted by both residential and commercial applications. Natural gas accounted for about 45% of this market in 2020. Moreover, the use of natural gas is cost-effective and has a lower environmental impact in comparison to coal. These are major factors that are expected to bolster the growth trajectory of the global combined heat & power market in the coming years.

Europe to Account for the Highest Share in the Combined Heat & Power Market

Given the wintry weather conditions across this region, particularly in countries like the UK, Finland, Denmark, and Germany, it should come as no surprise that Europe is expected to remain a frontrunner in the global combined heat & power market. This region accounted for about 39% of this market in 2020. Nonetheless, the Asia Pacific region is expected to index significant growth over the forecast period. The increase in industrial activities as well as favourable initiatives by respective governments aimed at infrastructural development is a major element that is expected to further contribute to the growth of this regional market. Governments in North America are now focused on investing heavily in augmenting smart grids and microgrids thus increasing the need for combined heat & power installations. Moreover, Latin America and the MEA are also expected to register immense growth over the forecast period, owing to growth in their respective industrial, commercial, and residential sectors.

Global Combined Heat & Power (CHP) Market - Key Competitors

Siemens AG, GE, Veolia, ABB Group, 2G Energy AG, Cummins Inc., Tecogen Inc., MAN Energy Solutions SE, Clarke Energy, Generac Power Systems, Inc, Capstone Green Energy Corporation, and Wartsila, all collectively account for the majority revenue share of the AR glasses market and are extensively detailed under our comprehensive competitive profiling and strategic analysis.