Combined Heat And Power Market To Grow By Billions Over The Next Few Years, Says MarketsandMarkets

(Credit: Google)

by | Nov 10, 2021

(Credit: Google)

Market research company MarketsandMarkets recently published a global forecast of the combined heat and power market projecting major growth in the coming years, from an estimated $26.6 billion in 2021 to $35.2 billion by 2026 — a combined annual growth rate of 5.8%.

The coronavirus pandemic did interrupt growth in the CHP market, as in many markets, due to stay-at-home orders and supply chain disruptions. But countervailing factors are expected to offset the pandemic-related slowdown. Government programs and incentives, particularly in Organization for Economic Cooperation and Development countries, will drive CHP market growth. The U.S., for example, set targets for CHP as a percentage of total power generation. The federal government and several state governments have promoted CHP with financial incentives and tax rebates for installations.

The European CHP market is similarly driven by government policies and initiatives, with many countries establishing their own tax incentives and CHP power generation targets.

Another driving force of CHP market growth is climate change, which is motivating countries to reduce their carbon footprint. CHP is an energy-efficient technology that generates electricity and captures the heat that would otherwise be wasted to provide useful thermal energy, such as steam or hot water. CHP can operate at efficiency levels as high as 80%, whereas conventional heat and power plants have a combined efficiency of 45%.

MarketsandMarkets also discusses some barriers to growth in the CHP market, drawing attention to its high installation costs, which “can be almost 240% more than that of the cost of a power generation plant of the same capacity and prime mover, making it a major restraint for the combined heat and power market.”

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