Global Combined Heat Power Market to Experience Noteworthy Growth with Enhanced Funding for Natural Gas Production and Related Infrastructure

In today's fast-paced world, the need for energy is constantly growing owing to population growth and industrialization. A wide range of fuels and technologies are required to efficiently generate both electrical and thermal energy to fulfil rising energy needs, ensure a reliable energy supply, and limit environmental impacts. This is where the combined heat power (CHP) solution comes in.

The combined heat power market is a booming industry that offers energy-efficient and cost-effective solutions to organizations, businesses, and communities. A combined heat and power system (CHP) is a technology that employs a variety of fuels and technologies to effectively produce electrical and thermal energy. This system recovers lost energy by utilizing combined heat that would otherwise be wasted in power plants or buildings connected to the energy plant via a stream pipe network. This wasted combined heat is applied to facility loads during the combined heating, hot water, steam, or chilled water processes.

Recent Trends in the Combined Heat Power Market

Technological improvements have resulted in the development of more efficient and reliable CHP systems, making them more appealing to industries and businesses. These improvements include more efficient heat exchangers, improved gas turbines, and better control systems. In addition, natural gas is the most often utilized fuel for CHP systems since it is less expensive and emits fewer greenhouse gas emissions than other fossil fuels. The growing accessibility of natural gas and the development of improved gas turbines have made natural gas-based CHP systems increasingly attractive to businesses and industries.

Newest Insights in the Combined Heat Power Market

As per a report by Research Dive, the global combined heat power market is expected to grow at a CAGR of 7.2% and generate revenue of $48,399.1 million by 2031. The primary factors driving the growth of the market are the growing worldwide need for electricity, the increasing usage of distributed electricity production, and the rising need for power. Hence, governments in numerous countries are focusing on renewable energy. However, increased maintenance and installation costs of combined heat power are expected to hinder the market growth.

The combined heat power market in Asia-Pacific is expected to remain dominant in the coming years. The region's high revenue in 2021 was driven by the increasing need for district energy (heating and cooling systems) as a result of shifting climatic conditions and ongoing mechanical advancements that increased demand. The important factors boosting the combined heat and power market's geographical perspective can be derived from fuel adaptability.

How are Market Players Responding to the Rising Demand for Combined Heat Power?

Market players are responding to the rising demand for combined heat power by investing in research and development to create more innovative technology such as AI and IoT in industrial settings. Moreover, they work closely with clients to determine their unique requirements and assist them in choosing the ideal CHP system for their application. The market players examine the installation and commissioning of the chosen system.

In addition, market players are increasingly focusing on strategic partnerships and collaborations with other players in the industry to leverage their strengths and expand their reach. Some of the foremost players in the combined heat power market are Caterpillar Inc., MAN Diesel & Turbo SE, Veolia, General Electric, Mitsubishi heavy Industries Ltd., Cummins, Bosch Thermotechnology Ltd., ENER-G Rudox, ABB Limited, and others. These players are focused on implementing strategies such as mergers and acquisitions, novel developments, collaborations, and partnerships to reach a leading position in the global market. 

For instance, 

• In February 2021, the United States Department of Energy, an executive branch of the American federal government, announced the introduction of combined heat and power to its renewable energy modelling web tool. This free tool can help users improve a site's energy efficiency and resilience by assessing its renewable energy, conventional on-site generating, and energy storage capacity.
   
• In May 2022, Caterpillar, an American producer of construction machinery, launched a demonstration project with a combined heat and power system powered by hydrogen.
   
• In February 2023, Bloom Energy, a well-known corporation that produces and sells on-site electricity-generating solid oxide fuel cells, launched a combined heat and power solution, boosting system effectiveness and affordability.

COVID-19 Impact on the Global Combined Heat Power Market

The COVID-19 pandemic made an adverse impact on the global combined heat power market. This had ultimately reduced the demand for combined heat and power as a result of supply chain disruptions, the closure of manufacturing facilities, and the global economic slump. In addition, the electronics and semiconductor industries suffered severely as a result of the pandemic. Businesses and industrial facilities were shut down due to the increase in COVID-19 cases. Furthermore, the global supply chain was impacted by a partial or total lockdown, making it challenging for businesses to reach their customers. The combined heat power market has suffered significant losses in trade and revenue as a result of the shutdown of production facilities because of the lockdowns around the world. However, the global combined heat power market is expected to recover soon during the post-pandemic period.