District Heating Global Market Report 2024

The system of district heating involves an underground infrastructure that efficiently distributes thermal energy from centralized energy plants to various buildings. This is achieved by circulating the plant's steam or hot water through well-insulated thermal pipe networks, providing a continuous and reliable heat supply to buildings. The adoption of district heating eliminates the need for individual building boilers, promoting efficiency and emission control.

District heating plants can be categorized into boiler, combined heat and power (CHP), and other plant types. Combined heat and power (CHP), also known as cogeneration, involves the simultaneous generation of electricity or mechanical power alongside useful thermal energy (heating and/or cooling) from a single energy source. Various heat sources, including coal, natural gas, renewables, and oil and petroleum products, are utilized in district heating systems. These systems find applications in residential, commercial, and industrial settings.

The district heating market research report is one of a series of new reports that provides district heating market statistics, including district heating industry global market size, regional shares, competitors with a district heating market share, detailed district heating market segments, market trends and opportunities, and any further data you may need to thrive in the district heating industry. This district heating market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The district heating market size has grown steadily in recent years. It will grow from $177.73 billion in 2023 to $185.33 billion in 2024 at a compound annual growth rate (CAGR) of 4.3%. The growth observed in the historic period can be attributed to a heightened emphasis on energy efficiency and sustainability, along with increased urbanization and population density in metropolitan areas. Government initiatives promoting decentralized energy systems, the transition to low-carbon and renewable energy sources, and a rise in consumer demand for reliable and affordable heating solutions have also played significant roles in this growth.

The district heating market size is expected to see steady growth in the next few years. It will grow to $221.92 billion in 2028 at a compound annual growth rate (CAGR) of 4.6%. Anticipated growth in the forecast period can be attributed to the integration of heat pumps and thermal storage in district heating systems, along with the expansion of renewable district heating networks. The adoption of waste heat recovery technologies, a focus on electrification, and integration with smart grids are expected to contribute to this growth. Additionally, investments in the modernization and rehabilitation of district heating infrastructure are foreseen. Notable trends in the forecast period include the integration of low-temperature district heating, smart district heating systems, utilization of industrial waste heat, hybrid district heating systems, expansion of fourth-generation district heating (4gdh), and the implementation of energy storage and thermal energy batteries.

The anticipated rise in industrialization is poised to drive the growth of the district heating market. Industrialization involves the transformation of an economy from primarily agricultural to one centered on manufacturing goods. The development of infrastructure during this industrialization process contributes to the increased adoption of district heating elements. As an illustration, the appliances and consumer electronics (ACE) market in India is projected to reach USD 21.18 billion by 2025, with India potentially becoming a global manufacturing hub, adding over USD 500 billion annually to the global economy by 2030. This surge in industrialization is a key factor propelling the growth of the district heating market.

The growing demand in the construction industry is expected to be a significant driver for the district heating market. The construction sector, responsible for creating, maintaining, and repairing infrastructure, utilizes district heating to provide heating solutions for large and medium-sized buildings. For example, in April 2021, the investment in building construction in Canada increased from $14,294 million in April 2019 to $19,273 million in April 2021, reflecting substantial growth. Additionally, according to the 2022 US Construction Cost Trends report, total construction spending in the US has increased by 16% since the onset of the pandemic. This growth in the global construction industry contributes to the expansion of the district heating market.

Rapid technological development emerges as a notable trend in the district heating market. Key players in the sector are actively involved in developing innovative technologies, with a strong emphasis on sustainability, to meet the evolving demands of end customers and enhance their market positions. For instance, Tractebel Engineering S.A., a Belgium-based provider of engineering services, is working on fourth-generation district heating and cooling technology. This technology leverages low-temperature waste heat and integrates with the electricity network grid. Ongoing development activities include district heating with geothermal heat coupled with a heat pump, as well as district cooling using standard chillers coupled with ice thermal storage. This commitment to technological innovation is expected to shape the landscape of the district heating market.

Major companies in the district heating market are directing their efforts towards the development of innovative solutions, with a focus on technologies like Abatement technology to enhance their market positions. Abatement technology encompasses mechanisms, processes, or methods designed to reduce public exposure to harmful emissions, including radioactive air emissions. For instance, in December 2021, Babcock Wanson Ltd., a UK-based manufacturer of industrial boilers, burners, thermal oxidizers, and air treatment solutions, introduced the GOOD LOOP Concept - NOx Abatement technology. This technology involves the direct injection of recycled exhaust gases into the combustion chamber through a specialized fan, effectively reducing NOx emissions by 20 to 30 mg/Nm3 in two separate gas boilers.

In January 2022, Egeria, an independent Pan-European investment company, completed the acquisition of Isoplus, a UK-based provider of pre-insulated district heating piping systems and district heating systems. The financial and operational support from Egeria is expected to empower Isoplus to expand its business operations across Europe. This strategic acquisition aligns with Egeria's objective to foster growth and development in the district heating market.

Major companies operating in the district heating market include Alfa Laval AB, Danfoss A/S, FVB Energy Inc., Keppel Corporation Limited, LOGSTOR A/S, Veolia Environnement S.A., Engie SA, Fortum Oyj, Vattenfall AB, Ramboll Group A/S, EON SE, NRG Energy Inc., Statkraft AS, Cofely GDF Suez, Hafslund Eco AS, Wien Energie GmbH, Steag GmbH, Göteborg Energi AB, RWE AG, Vital Energi Utilities Ltd., Agder Energi AS, Orsted A/S, Arbeitsgemeinschaft Fernwärme, Techem Energy Services GmbH, Helen Ltd., Eidsiva Bioenergi AS

Western Europe was the largest region in the district heating market in 2023. North America is expected to be the fastest-growing region in the district heating market share during the forecast period. The regions covered in the district heating market analysis report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.

The countries covered in the district heating market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, and USA.

The district heating market consists of revenues earned by entities by providing services such as high-temperature district heating, medium-temperature, low-temperature district heating, and ultra-low-temperature district heating. The market value includes the value of related goods sold by the service provider or included within the service offering. The district heating market also includes sales of HVAC system thermostats, furnace burners, heat exchangers, blowers, and filter racks. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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