Global Combined Heat and Power Market - Growth, Trends, and Forecast (2018 - 2023)
Due to the increasing demand for electricity across the globe, coupled with rising concerns for environment protection, has increased the demand for combined heat and power (CHP) or cogeneration technology. Instead of purchasing electricity from the distribution grid and burning fuel in an on-site furnace or boiler to produce thermal energy, an industrial or commercial facility can use CHP to provide both energy services in one energy-efficient step. CHP technology could offer 85-90% efficiency compared to conventional heat and power generation methods, which offer the combined efficiency of approximately 50%. With the increasing emission of greenhouse gases (GHG) posing a serious threat to the environment, developed economies have undertaken numerous steps, such as CHP installation to curb CO2 emissions. Furthermore, factors, such as the need for energy efficiency and growing government support, are expected to further supplement the demand for CHP systems during the forecast period.
Supportive Government Policies Driving the Market
CHP is receiving enormous support from various governments around the world, in the form of favorable policies and incentives. Governments in different regions are promoting cogeneration technology through various long-term policies and financial incentives. Strong commitment from these governments, for the development of CHP, has led to various R&D initiatives and CHP installations, which will drive the market in the upcoming period. Decision makers across the globe continues to implement favorable CHP policies to attract investment, drive deployment, foster innovation, and encourage greater flexibility in energy infrastructure that supports enabling CHP technologies.
Europe Continues to Witness High Growth Rate
Factors, such as increasing stringent environment emission norms, carbon savings targets, and focus on shifting away from power generation from coal have increased the uptake of CHP projects across Europe. Over the years, Europe has accounted for largest CHP installations across the globe. As of 2016, CHP accounted for approximately 15% of its heat requirement and 11% of its electricity requirements in the European Union. Russia alone has a large number of CHP installed capacity compared to the rest of Europe and depends largely on combined heat and power systems to meet a significant share of its heat requirements. Similar CHP systems installation is expected to increase significantly during the forecast period in countries, such as the United Kingdom, Germany, and others, which would further supplement the market during the forecast period.
China to Register High Growth Rate
As a result of economic expansion and urbanization activities, China’s energy consumption has been growing rapidly, and energy and environmental issues have become a key challenge to China’s sustainable development. As a result, the Chinese government has started to pay unprecedented attention to energy efficiency and emissions reductions, proposing an ambitious target to reduce energy intensity by 20%. As important energy efficiency technologies, combined heat and power (CHP) is expected to achieve significant attention in the form of legislative and economic support. In 2015, China accounted for the largest share of CHP addition across the globe with approximately 250 GW of total installed capacity. Furthermore, the Central Government of China plans to offer similar favorable incentives during the forecast period, which is expected to supplement the demand for CHP installation in China.
Key Developments in the Market
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