District Heating Market To Generate $262 Billion Revenue by 2030

The district heating market size is expected to advance at a CAGR of 5.6% during 2022–2030, to reach USD 262 billion by 2030.

The surge in the urban population due to the increasing migration from rural areas to cities is driving the market. Due to this, the buying power is increasing, and the demand for well-structured buildings is rising. Cities are home to more than 50% of the people, account for over two-thirds of the energy consumption of the world, and generate over 70% of the earth’s GHG emissions. Due to this, smart cities are being constructed, where these heating systems source their energy from waste heat and renewables.

The new district heating systems have improved the incorporation of heat producers and consumers into the network, thus making possible a bidirectional operation and usage of waste energy as a heat source. For example, the waste heat generated from Microsoft’s two large data centers in Helsinki is being used by the district heating networks of Fortum to heat homes and businesses in Finland.

The global trend of countries going toward zero carbon emission is also one of the factors due to which the market size is increasing at a high rate. The usage of non-conventional heat sources, such as solar power, geothermal, and bioenergy; and secondary sources, such as waste heat from industries; is rising in district heating systems. Such an integration will help in the transition to sustainable heating networks more efficiently and reliably.

Many major players, such as Fortum, Vattenfall, and ENGIE, are using various new technologies to reduce emissions. These technologies can control the supply of heat as per the requirement, which means it can be directed to the place where it is most needed at that time.

Industrial Category Held Largest Share in 2022

The industrial category within the application segment held the largest share in 2022, due to the rapid industrialization. As per the IEA, industrial heat contributed around one-third of the industrial energy demand and one-fifth of the global energy consumption.

Additionally, as per IEA, low- and medium-temperature heat (below 400 degrees Celsius) will account for three-quarters of the total growth in heat demand by 2040, driven by the growth of less-energy-intensive industries across the globe.

European Region Dominates Global Market

The European region held the largest revenue share in 2022, due to the cold weather conditions in the region for much of the year. Due to the extreme climatic conditions, the requirement for heating solutions is extremely high. Additionally, due to Europe’s goal of achieving net-zero emissions by 2050, it is focusing on more-efficient sources of heat, such as solar and hydropower, which can be used with the waste energy from industrial facilities.

According to the IEA, Europe is the pioneer in integrating renewables into district heating, sourcing about 25% of its district heating energy from green sources. Many countries, such as Austria, Denmark, Sweden, Latvia, Iceland, Lithuania, and Estonia, have more than 50% of these systems’ energy coming from renewable sources.

The biggest market players are Fortum Group, Vattenfall AB, ENGIE SA, Danfoss, Statkraft AS, LOGSTOR Denmark Holding ApS, Vital Energi Ltd., KELAG-Kärntner Elektrizitäts-Aktiengesellschaft, SHINRYO CORPORATION, and Keppel Corporation Limited.