CHP Installation Market Overview
One of the major trends identified in the global combined heat and power (CHP) installation market is technological innovation in the designing of micro CHP systems to reduce cost and improve efficiency, along with the availability of fuel variants. However, major factors driving the market are positive outlook of developing economies for infrastructure development and strong government support through favorable policies and feed-in tariffs for installing CHP systems.
CHP is a clean approach for producing electricity, which in turn, reduces the dependency on purchasing electricity from local utility and burning fuel in a boiler or in an on-site furnace. As a result, CHP installations are able to save 40% of energy and can produce electricity locally, which eliminates the need for energy transmission and distribution networks. CHP systems are suitable for various end users, wherein security of power supply is considered a major factor for selecting power generation equipment. CHP technology offers high cost savings, as in case of these installations, the requirement for separate systems for heat and power generation gets eliminated.
Based on fuel, the CHP installation market is classified into biomass, coal, and natural gas. Among these, the natural gas was the largest category in the market, followed by coal, during the historical period. Natural gas is the most-preferred fuel type to generate electricity. The trend is likely to continue during the forecast period as natural gas is a clean source of energy and is available at low cost, which would drive the natural gas-based CHP installation market. However, the utilization of coal in these systems is expected to decline in various regions, including Europe and North America, due to high environmental pollution footprint and high handling costs.
On the basis of application, the CHP installation market can be classified into residential, commercial, industrial, and utility. Among these, the industrial sector accounted for the highest revenue share in the market during the historical period, due to increasing installations of these systems in different application including, petrochemical and pharmaceutical industries. Increasing preference for these systems by end users over conventional power generation systems, and low natural gas price further fuel the market growth. Additionally, residential category is projected to grow at a significant rate, during the forecast period, as the energy demand is rising with growing population and urbanization in developing countries.
Based on region, the CHP installation market is categorized into North America, Europe, Latin America (LATAM), Asia-Pacific (APAC) and the Middle East and Africa (MEA). Among these, the Europe was the largest market, in terms of value, followed by APAC, during the historical period. The major factors driving the CHP installation in the European market are the stringent environmental policies and regulations implemented by the government for curbing pollution levels. Globally, the APAC market is expected to witness a significant growth rate during the forecast period, owing to the presence of large-scale manufacturers in APAC countries, including China, India, Japan, and South Korea.
CHP Installation Market Dynamics
Drivers
Increasing government regulations in order to promote the adoption of CHP systems to reduce the greenhouse gas emission, and growing awareness about the benefits of energy efficient technologies are the main factors driving the growth of the CHP installation market. Further, economic and environmental benefits of these systems and reusability of the biproducts will also encourage the demand for these systems, resulting in the growth of installation market of these systems. Favorable governments policies and significant financial incentives for CHP systems will also encourage the demand for CHP installation, in coming years. Increasing popularity of natural gas as it is an economical and clean source of energy in comparison to oil and coal will also augment the market growth.
Restraints
One of the challenges in the growth of the CHP installation market is the lack of awareness about the site permissions required in order to install these systems. Installation of these systems is only suitable for facilities where there is a need for both electricity and hot water, which acts as a barrier for the growth of the market. Additionally, initial costs to install these systems are quite high, which can make them prohibitive for small-scale industries.
CHP Installation Market Competitive Landscape
Some of the major companies operating in the global CHP installation market include General Electric Energy, E.ON Group, Mitsubishi Power Systems Americas Inc., Siemens Energy, Aegis Energy Services Inc., Infinia Corporation, Elite Energy Systems LLC, Ener-G Group, Alstom, and Caterpillar.
The study provides the historical as well the forecast market size data for various countries, including the U.S., Canada, France, Germany, the U.K., Italy, Japan, China, India, South Korea, Brazil, Mexico, Saudi Arabia, the U.A.E., and South Africa.
