Combined Heat and Power Market to Grow with Booming CAGR Value of 5.8% by 2026

According to the new market research report, the Combined Heat and Power Market is expected to grow from an estimated USD 26.6 billion in 2021 to USD 35.2 billion by 2026, at a CAGR of 5.8% during the forecast period. Gas turbine, followed by reciprocating engine, is widely used in CHP.

Increased trend
of distributed power generation is creating huge opportunity for gas
turbine-based CHP market are expected to offer lucrative opportunities for the CHP
market during the forecast period. 

Asia Pacific is expected to grow at the highest CAGR during the forecast period. Asia Pacific region has been segmented, by country, into China, India, Japan, South Korea, Australia, and Rest of Asia Pacific. Rest of Asia Pacific includes Malaysia, Thailand, Philippines, and Indonesia). The region is the most populated region in the world and is expected to become the largest CHP deploying region globally.

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The conventional
method of producing usable heat and power separately has a typical combined
efficiency of 45%, where CHP systems can operate at levels as high as 80%. CHP
can be implemented for different types of prime movers, such as gas turbines,
steam turbines, reciprocating engines, fuel cells, and microturbines. CHP is
also called cogeneration, and it can be used in an individual facility/building
or a district energy/utility resource. The technology is typically employed at
facilities where there is a need for electricity and thermal energy. It
provides benefits such as a reduction in dependency on grid support due to on-site
electricity generation, enhanced reliability, reduced costs of energy and
initial setup, increased resiliency against power disruption, and reduction in
harmful emissions. Critical electrical and thermal loads can be handled by CHP
systems during grid power outages. Micro turbines are a type of combustion
turbine that produces both heat and electricity on a relatively small scale.

The CHP market,
by capacity, into up to 10 MW, 10-150 MW, 151-300 MW, and above 300 MW. The CHP
market, by prime mover, into gas turbine, steam turbine, reciprocating engines,
fuel cell, microturbines and, and others (stirling engine and combined cycle
power plants). The CHP market, by fuel, into coal, natural gas, biogas/biomass,
nuclear, diesel, and others (biodiesel and geothermal). The CHP market, by end
user, into utilities, residential, commercial, and industrial.

The 10-150 MW segment is expected to hold the highest market share during the forecast period. This segment consists of larger CHP plants mainly with reciprocating engines such as gas and diesel engines as prime movers, particularly used by industrial, commercial, and utilities end users. The demand for diesel power engines in this segment comes from utility-scale diesel power plants, large industrial plants, captive generation, and independent power producers (IPPs).

The gas turbine market, by prime mover, is expected to hold the highest market share during the forecast period. The gas turbine segment accounted for the largest share of 32.9% in 2020. A gas turbine is a type of internal combustion (IC) engine where inlet air is compressed and sprayed with fuel. The mixture is thereafter ignited in a combustion chamber and allowed to flow at high temperature and pressure through the turbine. The gaseous mixture passes through the turbine nozzles, which further channelize the kinetic energy of the hot air flow onto the blades. The turbine blades, which are mounted on a rotor, rotate with the impact of the high-velocity air. The rotary motion is used to turn a shaft, which performs tasks such as driving an electric generator. Gas turbines are used for power generation and in the mechanical drives used by oil & gas and other industries.

The natural gas market, by fuel, is expected to hold the highest market share during the forecast period. The natural gas segment accounted for the largest market share of 53.4% in 2020. Natural gas is mostly used in gas engines for electricity generation, as it burns cleaner and has low carbon emissions compared with other types of fuels. It also emits low levels of nitrogen oxide, sulfur dioxide, and particulate matter. The consumption of natural gas has led to rising concerns over global warming.

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The industrial market, by end user, is expected to hold the highest market share during the forecast period. The sector is also the largest consumer of delivered energy; according to BP Energy Outlook, the sector consumes around 50% of the world’s total delivered energy every year. In industrial sectors such as chemicals, oil & gas, pharmaceuticals, and food & beverages, energy is used for a variety of applications, including steam and cogeneration, heating and air conditioning for buildings, and process heating. Countries such as China and India are going through rapid industrialization and have introduced several policies to support industrial growth, including initiatives to ensure adequate power supply.

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