February 21, 2024
Combined Heat And Power Market

Combined Heat And Power (CHP) Market Is Estimated To Witness High Growth Owing To Increasing Demand For Clean Electricity And Thermal Energy

The Combined Heat And Power (CHP) Market is estimated to be valued at US$ 26.98 Bn in 2023 and is expected to exhibit a CAGR of 8.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Combined heat and power (CHP) is an efficient clean technology that captures and utilizes the heat that is normally wasted from conventional power generation. It simultaneously generates electricity and thermal energy in a single integrated system. CHP systems provide reliable on-site generation with fuel choice flexibility and they can also offset electricity purchases, reduce emissions and lower energy costs.

Market key trends:
Combined heat and power (CHP) is gaining popularity owing to increasing demand for clean electricity and thermal energy. CHP systems reduce carbon emissions by around 30-40% compared to separate heat and power generation. Stringent regulations regarding carbon emissions are further driving the adoption of CHP systems. Additionally, CHP provides greater operational cost savings when the heat can be used for heating, cooling or industrial processes. Technological advancements are leading to improved system efficiencies and reducing capital costs of CHP, thus making it more competitive. Growing demand for clean baseload power is also propelling the CHP market growth.

Porter’s Analysis
Threat of new entrants: Low capital requirements for small projects and growing awareness of advantages of distributed power generation pose a moderate threat of new entrants.
Bargaining power of buyers: Large industrial and commercial buyers have high bargaining power due to ability to opt for centralised power generation alternatives.
Bargaining power of suppliers: Key components such as gas turbines, generators, boilers etc require specialized manufacturing capabilities giving existing suppliers strong bargaining power.
Threat of new substitutes: In distributed applications, solar PV is emerging as an important substitute with rapidly falling costs. However, CHP has an edge due to reliability of power supply.
Competitive rivalry: Intense due to presence of global players offering total energy solutions.

SWOT Analysis
Strength: Higher efficiency compared to separate heat and power generation. Reliability of power supply.
Weakness: High initial capital costs. Complex installation and operation require skilled workforce.
Opportunity: Growing support through regulatory policies promoting clean energy. Expanding applications in industrial, commercial and residential sectors.
Threats: Intermittency challenges of renewable energy sources limiting reliance on CHP. Regulatory uncertainty in incentive schemes.

Key Takeaways
The Global Combined Heat And Power (CHP) Market is expected to witness high growth, exhibiting CAGR of 8.8% over the forecast period, due to increasing demand for efficient and reliable power solutions across sectors. North America dominated the market in 2023 with a share of over 35%, led by supportive policies and rapidly increasing natural gas based CHP installations, especially in the U.S.

Regional analysis – Asia Pacific is expected to witness the fastest growth, expanding at a CAGR of around 10% during the forecast period. Rapid industrialization and infrastructure development especially in China and India are driving demand. Additionally, supportive government initiatives to promote clean energy are fuelling regional market growth.

Key players analysis – Key players operating in the Combined Heat And Power (CHP) market are Wartsila, Siemens, GE, 2G Energy, Aegis Energy Services, Bosch Thermotechnology, Kawasaki Heavy Industries, Viessmann Werke, FuelCell Energy, Veolia, Clarke Energy, CAPSTONE TURBINE, Caterpillar, Yanmar, ABB, Edina, Wolf GmbH, Atlas Copco, Tecogen Inc. Major players are focusing on developing innovative and customized CHP systems with integration of renewable energy sources to gain competitive edge.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it