Combined Heat and Power (CHP) Market Size - By Fuel (Natural Gas, Coal, Biomass), By End Use (Residential, Commercial, Industrial), By Capacity (1 kW – 0.5 MW, 0.5MW - 5MW, Above 5 MW), By Technology & Forecast, 2024 - 2032

Combined Heat and Power Market Size

Combined Heat and Power Market size was accessed at USD 22.9 billion in 2023 and is anticipated to grow at a CAGR of 7.6% between 2024 and 2032. Chief drivers for the significant growth include the rising demand for energy efficiency, especially in industries, where CHP systems play a pivotal role in curbing energy wastage by simultaneously producing electricity and thermal energy.
 

According to the U.S. Department of Energy, CHP systems can attain efficiency levels of up to 80%, when compared to the 50% efficiency of conventional systems. Furthermore, the market is bolstered by a global push to cut down on greenhouse gas emissions, with many countries enforcing stricter environmental regulations.
 

CHP systems, being a sustainable energy solution, are well-positioned to capitalize on this trend. Technological advancements, a shift towards integrating renewable energy sources, and supportive government incentives are all contributing to the market's momentum. Lastly, the economic advantages, such as lower energy costs and heightened energy security, are making CHP systems an attractive choice for many.
 

Combined Heat and Power Market Trends

The combined heat and power (CHP) industry is experiencing significant growth, driven by the increasing demand for energy efficiency and sustainability. Key trends include the adoption of advanced CHP systems in various industries, including commercial, residential, and industrial sectors, to reduce energy costs and carbon emissions. The integration of renewable energy sources, such as biomass and biogas, into CHP systems is also gaining traction, supported by favorable government policies and incentives aimed at reducing greenhouse gas emissions.
 

Technological advancements in micro-CHP and the development of smart grid technologies are further propelling market expansion. Additionally, the rising need for reliable and resilient power supply, especially in the wake of natural disasters and grid instability, is boosting the deployment of CHP systems worldwide.
 

Combined Heat and Power Market Analysis

The CHP industry is experiencing substantial growth driven by the utilization of natural gas as a primary fuel. The natural gas-based CHP market is projected to exceed USD 16 billion by 2032. Key drivers of this growth include the increasing focus on energy efficiency, the need for cost-effective power generation, and stringent government regulations aimed at reducing carbon emissions.
 

The abundant availability and lower prices of natural gas, along with advancements in CHP technology, further contribute to market expansion. Additionally, the growing demand for reliable and resilient power supply, especially in commercial and industrial sectors, is propelling the adoption of natural gas-based CHP systems.
 

The combined heat and power (CHP) market in the industrial sector is projected to achieve a compound annual growth rate (CAGR) exceeding 6% by 2032. This growth is driven by the increasing need for energy efficiency and the reduction of greenhouse gas emissions within industrial operations. Rising energy costs and the emphasis on sustainable energy solutions are prompting industries to adopt CHP systems. Government incentives and supportive policies further encourage the deployment of CHP technologies. Additionally, the reliability and continuous power supply provided by CHP systems enhance their attractiveness in industrial settings, supporting uninterrupted production processes.
 

The European combined heat and power market has seen strong growth, with forecasts indicating it will exceed USD 17.5 billion by 2032. This growth is driven by increasing energy efficiency regulations, rising demand for sustainable and decentralized energy solutions, and technological advancements. According to the European Commission, energy efficiency improvements could reduce EU energy consumption by 26% by 2030. Additionally, government incentives and policies promoting the adoption of CHP systems, along with the need to reduce greenhouse gas emissions, are further boosting the market's expansion. These factors collectively contribute to the robust development of the market in Europe.
 

The U.S. combined heat and power (CHP) industry is driven by increasing energy efficiency mandates, rising demand for resilient and decentralized energy systems, and advancements in CHP technology. Additionally, government incentives, the push for reducing greenhouse gas emissions, and the need for cost-effective energy solutions are propelling the market's growth and adoption across various industries.
 

Combined Heat and Power Market Share

General Electric holds a significant share in the combined heat and power (CHP) industry due to its advanced technology and extensive industry experience. Their innovative CHP systems offer high efficiency and reliability, meeting the growing demand for sustainable and decentralized energy solutions. GE's strong market presence and commitment to energy efficiency continue to drive their success in the CHP sector.
 

Combined Heat and Power Market Companies

Some of the key market players operating across the combined heat and power industry are:

• ABB
• BDR Thermea Group
• Bosch Industriekessel GmbH
• Caterpillar
• Centrica Business Solutions
• Centrax Gas Turbines
• Cummins, Inc.
• Daikin
• Dalkia Aegis, EDF Group
• Edina
• FuelCell Energy, Inc.
• General Electric
• Kawasaki Heavy Industries, Ltd.
• MAN Energy Solutions SE
• Mitsubishi Power
• MWM
• Siemens
• Veolia
• Viessmann
• Wartsila
• Yanmar Holdings CO., Ltd.
• 2G Energy AG
   

Combined Heat and Power Industry News

• In December 2021, Caterpillar introduced Cat G3516H and G3512H natural gas generators, which can be utilized across a CHP plant. The innovations simplify the installation, designing, and commissioning of any CHP application, which in turn will help the end users significantly. Moreover, the new technology further aids users to control carbon emissions, increase energy resiliency, and reduce energy costs.
   
• In July 2021, MWM introduced V16 and V12 iterations of its previously launched TCG 3020 gas engine series. The new units can achieve electrical outputs of 1,840 kWe and 1,380 kWe respectively and can further increase the plant’s performance by 18% in comparison with the predecessor series, TCG 2020. The V12 gas generators offer an electrical efficiency of up to 45% and the units further aid end users in reducing the operational & ownership costs owing to low oil consumption.
   

The combined heat and power market research report includes an in-depth coverage of the industry with estimates & forecast in terms of volume and revenue in MW & USD Million from 2021 to 2032, for the following segments:

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Market, By Fuel

• Natural gas
• Coal
• Biomass
• Others

Market, By End Use

• Residential
  • Space heating/cooling
  • Water heating
  • Cooking
  • Lighting & others 
• Commercial
  • Educational institution
  • District energy
  • Office building
  • Government/military
  • Others
• Industrial
  • Chemical
  • Petroleum refining
  • Food
  • Paper
  • Primary metals
  • Others

Market, By Capacity

• 1 kW - 0.5 MW
• 0.5 MW - 5 MW
• Above 5 MW

Market, By Technology

• Combined cycle
• Steam turbine
• Gas turbine
• Reciprocating engine
• Others

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico 
• Europe
  • UK
  • Finland
  • Russia
  • Germany
  • Denmark
  • Sweden
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
• Rest of World
  • South Africa
  • Brazil
  • Saudi Arabia