Increased interest in biomass fuels expected to drive global CHP installation market
The upsurge in the consumption of fuel derived from biomass, wood, and waste heat is likely to boost the installation of combined heat and power (CHP) across the globe.
Transparency Market Research (TMR) forecasts the global CHP installation market to exhibit a compound annual growth rate (CAGR) of 4.38% between 2014 and 2024.
The prospects for CHP installations have improved globally in response to the rising energy prices, which, combined with stringent regulations implemented to curb carbon emissions from conventional systems, is expected to aid the proliferation of CHP systems worldwide.
Based on in-depth research, TMR has pegged the combined heat and power installations worldwide to reach $812.8 billion (€722.7bn) by 2024. The global CHP installation market stood at $524.89 billion in 2014.
The market will further gain impetus from the strong existing CHP network, and the increasing awareness about CHP systems, particularly in the emerging economies in Asia-Pacific, is likely to translate into increased sales.
The presence of a large number of companies offering diverse products and services related to CHP installations is fueling competition in the global marketplace.
BDR Thermea Group held the largest share in the global CHP installation market in 2014, as per TMR analysis.
Some of the most prominent enterprises operating in the market include 2G Energy, Siemens, Edina, Wärtsilä Corp., ENER-G Holdings, Clarke Energy, and others, with the top eight companies holding 53% of the global market.
The demand for CHP systems mainly arises for industrial applications, followed by commercial and residential applications.
As the industrial segment accounts for the largest share in the market, it holds lesser scope for growth compared to the residential and commercial application segments.
According to TMR, the US, Japan, and Germany are at the fore of adopting CHP systems for commercial and residential applications.
TMR forecasts the value chain of the global CHP installation market to remain highly complicated during the forecast period from 2014 to 2024.
"The implementation of stringent emission control norms worldwide has compelled leading enterprises to adopt forward integration. Such strategies could have an adverse impact on the market's growth trajectory," said a TMR spokesman.
"Combined with this, the high cost incurred on installing CHP systems is also inhibiting the large-scale proliferation of CHP installations," he added.
Nevertheless, increasing scope in the residential and commercial sector is expected to boost the prospects for the market in the near future.
By type, large-scale CHPs hold a dominant share of 85.69%, followed by micro- and small scale CHPs in 2014.
However, large installations are expected to lose a significant part of their market share to the latter in the near future, despite the increasing CHP installation in India and China which will keep the demand for large-scale CHPs high in the forthcoming years.
The rising usage of micro- and small-scale CHPs across residential and commercial sector will enable the segment to report the fastest CAGR during the forecast period.
Regionally, Europe emerged as the largest market for CHP installations in 2014 and the region accounted for a share of 67.96% in the overall market in the same year.
The easy availability of natural gas in Russia has significantly contributed to the increased demand for CHP installations in Europe.
Other countries in Europe exhibiting increasing demand for CHP installations include Germany, Poland, Belgium, Italy, and the Netherlands.