The combined heat and power (CHP) market is witnessing increasing adoption of digitization enabled advance techniques to optimize energy efficiency. Combined heat and power, also known as cogeneration, is the concurrent production of electricity or mechanical power and useful thermal energy from a single source of primary energy. CHP systems capture the heat produced during power generation and product steam or hot water for industrial processes and space heating, thereby improving overall fuel efficiency.
The global CHP market valued at US$ 31.09 billion in 2024 and is expected to exhibit a 12% CAGR over the forecast period of 2024 to 2031.
Combined Heat and Power (CHP) Market Demand provide reliable and secure power supply while reducing emissions and energy costs compared to separate heat and power systems. It enables industries and commercial buildings to meet their baseload electricity and heating/cooling requirements in an energy efficient manner. Various CHP applications include food & beverage, chemical, petrochemical, paper & pulp, healthcare, universities, commercial buildings and data centers. Rising focus on digitization of utilities and the post-pandemic economic recovery is driving greater use of innovative distributed energy solutions like CHP across sectors.
Key Takeaways
Key players operating in the combined heat and power market are Lonza Group Ltd., Thermo Fisher Scientific Inc., Merck KGaA, and STEMCELL Technologies Inc. Lonza Group Ltd. specializes in microbial expression, mammalian cell expression and bioconjugation technologies.
The global CHP market is witnessing rising demand fueled by increasing focus on decarbonization of utilities and need for resilient power infrastructure. Stringent emission norms by governments coupled with incentives for clean distributed generation are promoting wider adoption of trigeneration and polygeneration solutions in industries and commercial buildings.
The CHP market is also expanding globally with major projects underway across Asia Pacific, Middle East, Europe and North America. Government support through regulatory policies and funding is encouraging greater private investment in innovative cogeneration technologies. Asia Pacific currently represents the largest regional market and is expected to witness fastest growth during the forecast period.
Market key trend:
Digitization is a key trend gaining momentum in the CHP market. Adoption of IoT sensors, AI, cloud computing and data analytics enables remote monitoring and optimization of combined heat and power systems. Utilizing big data helps operators improve overall equipment effectiveness, reduce downtime, enhance power quality and fuel efficiency. Digitization also facilitates predictive maintenance and demand response capabilities of CHP units. This emerging tech-enabled approach is set to transform the decentralized energy sector.
Porter’s Analysis
Threat of new entrants: Combined Heat and Power (CHP) Market systems require high capital investment which poses a barrier for new players.
Bargaining power of buyers: Large utilities and commercial/industrial facilities have significant bargaining power as buyers.
Bargaining power of suppliers: Major component suppliers for gas turbines, reciprocating engines, heat recovery system, and CHP control systems have some bargaining power.
Threat of new substitutes: Distributed renewable energy technologies like rooftop solar are emerging substitutes for CHP systems.
Intense competitive rivalry: Major players compete fiercely in established CHP markets on parameters like efficiency, emissions profile, maintenance costs etc.
Geographical Regions
North America currently accounts for the largest share in the global CHP market due to stringent emission norms as well as incentives supporting clean technologies. The region has high demand for electricity cogeneration from oil & gas sector, universities, hospitals and other commercial buildings.
Asia Pacific is expected to witness the fastest growth during the forecast period owing to rapid industrial expansion, increasing focus on electrification of remote communities and strict environmental regulations. Countries like China and India are promoting CHP adoption for balancing grid loads as well as improving energy security through distributed power generation.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it.