Combined Heat & Power (CHP) Market Forecasts to 2030 - Global Analysis By Fuel Type (Natural Gas, Coal, Biomass, Waste Fuels, Renewable Energy Sources and Other Fuel Types), Component, Technology, Application and By Geography

According to Stratistics MRC, the Global Combined Heat & Power (CHP) Market is accounted for $17.25 billion in 2024 and is expected to reach $29.61 billion by 2030 growing at a CAGR of 8.8% during the forecast period. Combined Heat and Power (CHP), also known as cogeneration, is an efficient energy system that simultaneously produces electricity and useful thermal energy from a single fuel source. By capturing and utilizing heat that would typically be wasted in electricity generation, CHP systems achieve significantly higher energy efficiency, often around 80%, compared to separate heat and power production. CHP reduces greenhouse gas emissions, cuts energy costs, and enhances energy resilience by providing a reliable on-site power source, making it a key solution for sustainable energy management.

According to the International Renewable Energy Agency, the total installed renewable capacity at the end of 2022 was around 3,372GW, which has grown by around 295GW from the previous year, thus representing a growth of approximately 9.6%.

Market Dynamics:

Driver:

Growing awareness of environmental issues

As concerns over climate change and carbon emissions intensify, businesses and governments are increasingly adopting CHP systems to reduce greenhouse gas emissions and minimize energy waste. CHP's ability to simultaneously generate electricity and useful heat from a single fuel source makes it a highly efficient solution, supporting environmental goals. Additionally, policies and incentives aimed at reducing environmental impact are further encouraging the adoption of CHP technologies across industries, boosting market growth.

Restraint:

Long payback period

The long payback period in CHP systems is primarily due to the high initial capital costs for installation, infrastructure, and maintenance. Although CHP systems reduce energy bills over time, the savings take years to offset the upfront investment. This extended payback period discourages many potential adopters, particularly small businesses or facilities with lower energy consumption. As a result, the financial barrier may limit widespread adoption, hindering the market's growth.

Opportunity:

Rising demand for renewable energy

CHP encourages the integration of cleaner and more sustainable energy sources. As governments and industries aim to reduce greenhouse gas emissions and transition to greener energy solutions, CHP systems, which can combine renewable sources like biomass, biogas, and solar thermal with traditional power generation, becomes an attractive option. This dual generation enhances energy use, making it more efficient and environmentally friendly. Thereby, the demand for CHP systems, particularly those utilizing renewables, continues to rise.

Threat:

Limited scalability

Limited scalability in CHP systems occurs because these solutions are often designed for specific energy demands, typically suited for industrial or large-scale applications. Smaller facilities or residential areas may not benefit from the technology due to space constraints, high initial costs, and underutilization of capacity. This hampers market growth by restricting CHP adoption to only certain sectors, particularly in regions or businesses with lower energy needs.

Covid-19 Impact

The covid-19 pandemic impacted the combined heat and power (CHP) market by disrupting supply chains, delaying project timelines, and reducing industrial and commercial energy demand. Lockdowns led to decreased power needs in manufacturing and hospitality sectors, which typically utilize CHP systems, resulting in lower installations and investments. However, as economies recover, the CHP market is seeing renewed interest. Additionally, government stimulus programs are encouraging sustainable infrastructure, potentially boosting CHP adoption.

The microturbine CHP segment is expected to be the largest during the forecast period

The microturbine CHP segment is predicted to secure the largest market share throughout the forecast period. Microturbine CHP systems are compact, efficient energy solutions that generate both electricity and heat simultaneously. Typically ranging from 30 kW to 300 kW in power output, microturbines are ideal for small to medium-sized facilities. Microturbine CHP systems are known for their high efficiency, low maintenance, and reliability, making them an attractive option for industries seeking to reduce energy costs and their environmental footprint.

The industrial CHP segment is expected to have the highest CAGR during the forecast period

The industrial CHP segment is anticipated to witness the highest CAGR during the forecast period. Industrial CHP systems are used in manufacturing and other energy-intensive industries to simultaneously produce electricity and useful heat from a single energy source. These systems improve energy efficiency, reduce operational costs, and minimize carbon emissions by optimizing energy use. Common in industries like chemicals, paper, and food processing, industrial CHP enables companies to lower energy bills, enhance sustainability, and increase energy independence.

Region with largest share:

Asia Pacific is expected to register the largest market share during the forecast period driven by increasing energy demand, urbanization, and industrialization. Countries like China, Japan, South Korea, and India are investing in CHP systems to enhance energy efficiency, reduce greenhouse gas emissions, and ensure energy security. The region's strong emphasis on reducing reliance on coal and meeting climate targets also fuels CHP adoption. Additionally, government incentives, rising electricity costs, and expanding industrial sectors are key factors supporting CHP growth, making Asia-Pacific a significant contributor to the global CHP market.

Region with highest CAGR:

North America is projected to witness the highest CAGR over the forecast period driven by the demand for energy efficiency, cost savings, and energy security across various sectors, including industrial, commercial, and institutional. The United States and Canada are key players, with supportive government policies, incentives, and environmental regulations promoting CHP adoption. Additionally, North America's transition toward cleaner energy sources and efforts to lower greenhouse gas emissions make CHP a valuable solution in the regional energy landscape.

Key players in the market

Some of the key players profiled in the Combined Heat & Power (CHP) Market include General Electric (GE), Siemens AG, Cummins Inc., Caterpillar Inc., Mitsubishi Corporation, MAN Energy Solutions, Bosch Thermotechnology, ABB Ltd, Wartsila Corporation, Clarke Energy, Enbridge Inc., Samsung SDI, 2G Energy AG, Kawasaki Heavy Industries Limited, Aegis Energy Services Inc., Capstone Turbine Corporation, Yanmar Corporation, EDF Group, Centrica plc and Engie SA.

Key Developments:

In October 2024, Centrica collaborated with Samsung SDI to introduce a CHP system that incorporates battery storage for greater efficiency and flexibility. The system focuses on optimizing energy supply by combining heat production with electricity storage, which can be especially beneficial during peak times and for grid resilience.

In October 2024, Enbridge Gas, in partnership with 2G Energy and CEM Engineering, launched North America's first hydrogen-powered CHP system at its Technology Operations Centre in Markham, Ontario. This pioneering project can run on hydrogen, natural gas, or a blend of both, significantly reducing greenhouse gas emissions by utilizing waste heat for the building's heating needs.

Fuel Types Covered:

• Natural Gas
• Coal
• Biomass
• Waste Fuels
• Renewable Energy Sources
• Other Fuel Types

Components Covered:

• Prime Mover
• Generator
• Heat Recovery Unit
• Electrical Components
• Control Systems
• Other Components

Technologies Covered:

• Reciprocating Engine CHP
• Gas Turbine CHP
• Steam Turbine CHP
• Microturbine CHP
• Fuel Cell CHP
• Combined Cycle CHP
• Other Technologies

Applications Covered:

• Industrial CHP
• Commercial CHP
• Residential CHP
• Institutional CHP
• Utilities CHP
• Other Applications

Regions Covered:

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • Italy
  • France
  • Spain
  • Rest of Europe
• Asia Pacific
  • Japan
  • China
  • India
  • Australia
  • New Zealand
  • South Korea
  • Rest of Asia Pacific
• South America
  • Argentina
  • Brazil
  • Chile
  • Rest of South America
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Qatar
  • South Africa
  • Rest of Middle East & Africa

What our report offers:

• Market share assessments for the regional and country-level segments
• Strategic recommendations for the new entrants
• Covers Market data for the years 2022, 2023, 2024, 2026, and 2030
• Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
• Strategic recommendations in key business segments based on the market estimations
• Competitive landscaping mapping the key common trends
• Company profiling with detailed strategies, financials, and recent developments
• Supply chain trends mapping the latest technological advancements

Free Customization Offerings:

All the customers of this report will be entitled to receive one of the following free customization options:

• Company Profiling
  • Comprehensive profiling of additional market players (up to 3)
  • SWOT Analysis of key players (up to 3)
• Regional Segmentation
  • Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
  • Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances