Poster in May 13, 2023 16:29:11

Combined Heat and Power (CHP): A productive and clean way to deal with creating electric power and thermal power from a solitary fuel source

Combined Heat and Power (CHP): A productive and clean way to deal with creating electric power and thermal power from a solitary fuel source

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The global combined heat and power (CHP) systems market is anticipated to be valued at US$ 28,412.4 Million in 2022, forecast to grow at a CAGR of 4.7% to be valued at US$ 45,123.5 Million from 2022 to 2032. Growth is attributed to the increasing demand for electricity and power.

Cogeneration (also known as combined heat and power systems (CHP)) is a cluster of technologies primarily used for the concurrent generation of electricity and useful heat. This combined generation of heat and electricity is much more effective than a separate generation of electricity and useful heat in a way that CHP systems offer improved energy efficiency, reduced managing cost, low CO2 emission, and others.

Combined Heat and Power (CHP) is a productive and clean way to deal with creating electric power and thermal power from a solitary fuel source. CHP produces power creation at or close to the end user's site so that the heat released out of power generation can be utilized to meet the user's heat necessities while the power produced meets all or a part of the site's energy needs. Applications with consistent electricity and thermal energy demand are great monetary focuses for CHP deployment.

Growing data center capacity as businesses operate more processes, handle complex analytics with increasing storage requirements for customer data and employ rich media. Handling such large data requires a continuous supply of reliable power making cogeneration systems of primary importance.

The high initial capital cost required for the installation of the CHP Systems is one of the major factors that is expected to hamper the growth of the Combined Heat and Power (CHP) Systems Market over the analysis period.

Which are Some Prominent Drivers Spearheading Combined Heat and Power (CHP) Systems Market Growth?

The unprecedented economic growth around the world gives remarkable opportunities to the Combined Heat and Power (CHP) Systems Market. Energy is quintessential for paving the way for nurturing economies. CHP units are deployed in many IT parks, schools, universities, hospitals, airports, malls, and commercial spaces to economically generate the electricity and power to be independent energy producers. The growing commercial sectors owing to economic inflation may increase the demand for electricity and power, which in turn, is expected to accelerate the CHP Systems market over the analysis period.

Regions with high electricity costs are readily adopting CHP systems primarily to save on their energy cost to provide base load power and use such systems to provide absorption cooling for the facility. Moreover, government initiatives to install CHP systems in data center facilities, due to low CO2 emissions, which is also expected to increase its adoption rate thereby increasing the adoption of CHP systems in data centers.

Low economic life of data center IT equipment results in consumer reluctance towards the adoption of CHP systems for data centers since these systems have an equipment life of around 10-15 years in comparison to the economic life of IT equipment which is only 2-3 years.

Enormous carbon emission has adversely affected the overall ecology causing a rise in sea level and temperature. Several governments and private entities are persistently working to mitigate rising carbon emissions by adopting highly efficient, clean, and sustainable energy technology, which is anticipated to augment the market. Combined heat and power market units are highly efficient in terms of overall performance. It can achieve an efficiency of over 85% to meet the rising demand for space heating & cooling and hot water while providing electricity to supplement the grid.

For instance, in February 2018, the United Kingdom Government’s Department of Business, Energy & Industrial Strategy updated that the utilization of cogeneration systems can reduce carbon discharge by up to 30% in contrast with other conventional technologies

What are the Challenges Faced by the Combined Heat and Power (CHP) Systems Industry?

The CHP project implementation requires considerable capital investment, which is not feasible without any government funds or assistance that may hinder the combined heat and power market growth. Varying prices between different prime mover technologies create a reluctance among customers to shift from existing alternatives. Furthermore, prime mover technologies operating on other fuels, such as natural gas, diesel, and hydrogen, may also inhibit the market pace.

Another biggest challenge for installing a CHP plant is the high initial capital cost required for installation. In addition to 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 CHP 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 the high efficiency of the CHP, which raises the

Why is North America Emerging as an Opportunistic Combined Heat and Power (CHP) Systems Market?

In terms of regional platforms, North America holds the largest market share in Combined Heat and Power (CHP) Systems market. The region is expected to surge to over 21.4% share in 2022. Economical funding programs & rebates, promising research & development initiatives outline plans for reducing cost-effectively, and detailed CHP installation guidelines are some of the significant parameters complementing the North American CHP Systems market. For instance, based on planning data collected by the USA. Energy information administration, an additional 10,000 megawatts (MW) of large-scale CHP’s ability to contribute electricity to the grid is expected to be introduced between 2021 and 2023 in the USA, which is 10 times greater than the amount of maximum generation capacity by all systems by the end of 2019.

Governments across the region have set strict carbon emission targets owing to which, the USA and Canada are reducing their reliance on coal-powered power plants and introducing cleaner fuels to their energy mix.

A burgeoning energy demand along with the deployment of gas-based technology across these countries will accelerate the business landscape in the region. In addition, extreme climatic conditions across Canada and a few USA including Alaska will fuel the demand for energy-efficient & reliable space heating technologies, which in turn, will spur the CHP market progression in the region.

How is Europe Contributing to the Growth of the Combined Heat and Power (CHP) Systems Market?

According to Future Market Insights, Europe is expected to hold significant growth opportunities for Combined Heat and Power (CHP) Systems and is expected to reach a share of 19.8% in 2022. Expanding demand for district energy (heating) and cooling systems under moving climatic conditions alongside continuous mechanical developments inferable from fuel adaptability are the significant variables supplementing the territorial standpoint of the CHP systems market.

The European market is aided by tremendous carbon reduction goals by provincial specialists, as stated by the European Commission. The district is likewise upheld by a broad scope of empowering sustainable arrangement destinations and energy security strategies animating interest in CHP systems. The market growth in this region is attributed to the increasing awareness of the impact of human activities on the environment and fluctuating prices of traditional fuels used for power and heat generation within the region.

Where does the Asia-Pacific region stand in the Combined Heat and Power (CHP) Systems Market?

According to Future Market Insights, Asia-Pacific is expected to grow with lucrative growth opportunities for Combined Heat and Power (CHP) Systems Market and is expected to reach a significant share of 14.2% in 2022. The Asia-Pacific Combined Heat and Power Systems market is expected to grow due to rapid industrialization, urbanization, and economic growth in the region, leading to the installation of new CHP systems in various emerging economies.

The CHP market is expected to grow in countries such as China and India due to infrastructural expansions, ongoing power generation projects, and technological innovations. Investments in large new gas-fired cogeneration plants and large coal-fired plants, along with rising demand for electricity, are expected to drive the growth of the Asia Pacific CHP market over the next five years.

The region is the largest energy consumer globally, with China and India leading the growth in power generation and consumption. CHP has tremendous potential in the Asia Pacific, mainly due to the rapid economic growth in China and the transition from coal-based generation to gas-fired power generation.

How is Middle East & Africa Contributing to the Growth of the Combined Heat and Power (CHP) Systems Market?

According to Future Market Insights, the Middle East & Africa are expected to provide significant growth opportunities for Combined Heat and Power (CHP) Systems Market and is expected to reach a share of 8.0% in 2022.

Favorable government policies, as well as the growing initiative to promote the adoption of sustainable energy sources such as micro-CHP, are the major factors that are anticipated to accelerate the growth of the Combined Heat and Power (CHP) Systems Market during the forecast period.

The existence of large-scale manufacturers in the Middle East and Africa region is expected to fuel the demand for CHP Systems in the region. Besides, the government in some of the Middle East and African countries, such as Saudi Arabia, and the United Arab Emirates 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 Middle East and Africa in the future.

Role of Start-ups in Combined Heat and Power (CHP) Systems Market

There are many prominent market players in the Combined Heat and Power (CHP) Systems Market such as ClearCell Power, H3CHP, Enexor Bioenergy, Lerta, and RESET, among others, that are working hand-in-hand to provide the best-in-class Combined Heat and Power (CHP) Systems for enhancing the global arena. However, there are many global start-ups in the Combined Heat and Power (CHP) Systems Market, which are stepping forward in matching the requirements of the Combined Heat and Power (CHP) Systems domain.

Founded in 2015, ClearCell Power offers combined heat and power systems that enable the onsite generation of electrical and thermal energy. The technology improves energy efficiency as it requires less fuel while eliminating transmission and distribution losses. It further minimizes the emission of greenhouse gases (GHGs). Energy startups are working on CHP fuel cells that utilize a range of sources, including natural gas, coal, hydrogen, and biomass.

Established in 2016, Canadian startup H3CHP develops cogeneration solutions for the energy industry. The startup’s biomass gasification technology converts wood waste, biosolids, solids, and other organic feedstocks into syngas. For greenhouse owners, the solution provides an ideal disposal method for biomass that also generates carbon dioxide to enhance crop growth. The residual heat is captured and redirected to the site for heating or processing needs.

Market Competition

Some of the key participants present in the global Combined Heat and Power (CHP) Systems market include ENER-G, Korea Electric Power Corporation, National Grid plc, Exelon Corporation, NextEra Energy, Inc., Chubu Electric Power Company, American Electric Power Company, Inc. among others.

Attributed to the presence of such a high number of participants, the market is highly competitive. While global players such as ENER-G, Korea Electric Power Corporation, National Grid plc, Exelon Corporation, and NextEra Energy, Inc., account for a considerable market size, several regional-level players are also operating across key growth regions, particularly in North America.

Recent Development:

In July 2021, Capstone Green Energy signed a 10-year service contract on 1.2 MWs of micro-turbines installed in the fourth-tallest building in New York City. The skyscraper's 1.2 MW energy efficiency plant consists of two Capstone C600S microturbines with Capstone's Integrated Heat Recovery Modules.

In March 2021, The European Marine Energy Centre (EMEC) collaborated with Highlands and Islands Airports Limited (HIAL) to decarbonize heat and power at Kirkwall Airport through green hydrogen technology.

In February 2021, Siemens signed an agreement with the Guangdong Energy Group to provide F-class gas turbine island equipment for the Zhaoqing Dinghu Combined Heat and Power (CHP) generation project in Dinghu District, Zhaoqing City, Guangdong Province (China). The CHP plant is rated at 2×460MW and includes two SGT5-4000F gas turbines, two steam turbines, four generators, two SPPA-T3000 control systems, and related auxiliary equipment.

In February 2021, Wärtsilä secured a contract from Kraftwerke Mainz-Wiesbaden to deliver a 100 MW CHP plant, which would feed the excess heat generated during power generation into the Mainz district heating network, providing around 40,000 modern single-family homes. These insights are based on a report on 

Combined Heat and Power Systems Market 
by Future Market Insights



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