by Shane Henson — April 29, 2013—According to a new market report published by Transparency Market Research (TMR), the combined heat and power (CHP) installation market is expected to reach $76.1 billion in 2018.
CHP systems, also known as cogeneration systems, are used for the simultaneous generation of both electricity and heat energy. In CHP, the heat generated while generating electricity is captured and used for heating purposes. It ultimately increases the efficiency of the system by avoiding the heat losses, says Transparency Market Research.
The company’s report, Combined Heat And Power (CHP) Installation Market by Product (Large-scale CHP, Micro-CHP), by Application (Residential, Commercial & Industrial), Technology (Combined Cycle, Combustion/Gas, Steam, Fuel Cell, etc.)—Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2012-2018, analyzes the global installation capacity market for CHP systems.
All market estimates and forecasts have been analyzed from the installation capacity point of view and segmented on various levels including products (large and micro and small scale), technology, applications, fuel and geography.
In terms of revenue, the CHP installation market is expected to grow at a compound annual growth rate (CAGR) of 11.7% from 2012 to 2018. CHP fuels estimated and analyzed in this study include natural gas, coal, biomass, and others (wood, oil and process waste heat). Abundant supply of natural gas at competitive prices, a favorable regulatory scenario and increasing application scope, are expected to drive CHP systems demand over the next five years.
However, the report notes that CHP installation is a highly capital intensive process carrying significant risk value, which is expected to act as a barrier to market growth in the near future. The interconnection standards between utilities and cogeneration systems vary regionally. This makes it difficult for CHP technology companies to manufacture components and makes cogeneration system installation more complex and costly.
Industrial applications dominated the CHP systems market and accounted for 67.8% of the overall demand in 2011. Commercial applications followed industrial in terms of volume and are expected to grow at a CAGR of 15.9% from 2012 to 2018.
Key products analyzed and estimated in this study include large and micro and small-scale CHPs. Large-scale CHP dominated the product market, accounting for 82.5% of the overall installed capacity in 2011. CHP systems are primarily categorized into seven different technologies, including combined cycle turbines, gas/combustion turbines, steam turbines, reciprocating engines, waste heat recovery, micro-turbines, and fuel cells. Combined cycle turbine has captured majority of the market and accounted for 52.1% of the overall installed capacity in 2011. Steam and combustion/gas turbine follows combined cycle turbine and are expected to grow at a CAGR of 14.9% and 16.0% from 2012 to 2018.
In terms of volume, Europe dominated the global market, accounting for more than 50% of the overall installed capacity in 2011. CHP demand is expected to rise in Europe due to increasing CHP application scope in industrial, commercial and residential sectors. Europe is followed by Asia Pacific in terms of CHP installations owing to high demand in emerging economies, especially China and India and also in developed economies such as Japan. Asia Pacific CHP installation revenues are expected to grow at a CAGR of 15.7% from 2012 to 2018.
