Oilfield & Energies
Micro combined heat and power market analysis 21st May 2019
By Global Market Insights
The experts at Global Market Insights predict that launches of technologically improved products and governmen
The experts at Global Market Insights predict that launches of technologically improved products and government initiatives will to drive expansion of the micro combined heat and power (CHP) market over the next 5 years, potentially reaching $13 billion by 2024.
Micro combined heat and power (CHP) is an extension of the idea of co-generation – the simultaneous generation of electricity and useful heating/cooling from an energy source – to the family home or small office building. Local generation has the potential for a higher efficiency than traditional grid-level generators because it avoids the energy losses associated with long-distance electricity transport or from heat transfer in district heating networks (e.g. from hot water to a colder external environment). The most common micro CHP systems use natural gas as their primary energy source (Figure 1).
Over the past few years, the global micro CHP market space has already seen remarkable growth owing to the outcomes of government mandates aimed at tackling climate change. The adverse impact of fossil fuel based transport systems, coupled with industrial pollution, are the most significant factors to have compelled governments across the globe to rely on renewables. Numerous countries have come up with strict regulatory frameworks, along with incentive programs, to support alternative and more efficient energy sources, essentially fueling the micro CHP industry expansion.
One example of measures currently being undertaken by major economies around the world is the recently modified Combined Heat and Power (CHP) Act of Germany. In line with the stricter regulations, the new Act supersedes the Renewable Energy Sources Act of 2000 and focuses on revamping highly-efficient CHP facilities across the country. Through this Act, owners of CHP systems receive incentives for the electricity generated via their co-generation facilities. Moreover, the new Act intends to push electricity generation from CHP facilities to a commendable 100-terawatt hour (TWh) per annum by 2020 and 120 TWh by 2025, suggesting massive growth potential for the German micro CHP market.
In addition to government initiatives and mandates, an increasing demand for improved CHP systems across commercial and residential sectors is further driving revenue in the micro CHP industry. Valued at $2 billion in 2017, the micro CHP market is set to grow to more than $13 billion by 2024 (Figure 2), according to a new research report by Global Market Insights.1
This prediction is corroborated by the actions of several well-known market players, who have been unveiling advanced CHP systems incorporated with reliable technologies that are cost effective and environmentally friendly. Examples of new CHP systems that have been shaping the growth outlook of micro CHP market include:
- YANMAR America introduced a new EPA certified 35 kW micro CHP system in 2016. Powered by natural gas, the CP35D1 and CP35D1Z models are 88% more efficient than conventional power facilities. In particular, the CP35D1 has a built-in inverter instead of external inverters, which makes it a true plug-and-play unit. With decreased carbon footprint, the new micro CHP system also operates like the previous 5 and 10 kW CHP systems from YANMAR. Improvements in installation, simplification of exhaust system, higher heat recovery efficiency, and reduction in the overall package size are amongst the many pathbreaking features of the newly launched micro CHP systems.
- The leading manufacturer of micro combined cooling, heating and power generation equipment M-TriGen recently unveiled three new models of its trigeneration product range. Apparently, the new models have received authorization by Intertek and an ETL label which is a testimony to its higher performance and compliance with recognised safety standards. The new CHP systems have been specifically designed for government, military, light industrial, commercial and residential applications. Moreover, they are equipped with gas heat pumps that enable customers to reduce peak load power requirements and save significantly on their electric bills.
Indoor CHP systems installed 10 to 20 years ago are being replaced with new systems. Therefore, the demand for co-generation systems that have better energy saving performance and are easy to transport has witnessed a remarkable rise. Needless to mention, the launch of the aforementioned high-grade and enhanced micro CHP systems that are well-suited for healthcare facilities, restaurants, hotels, offices or multi-unit housing, has been instrumental in driving the growth prospects of the micro CHP industry.
In summary, owing to the proactive measures and initiatives being rolled out by various governments across the globe, the micro CHP market is expected to witness an annual installation of more than 3GW by 2024. In addition to this, the growing deployment of sustainable energy technologies, along with improvements in micro cogeneration systems, may provide a significant boost to the micro CHP industry in coming years.
- Global Market Insights. Micro Combined Heat and Power Market Size, 2018 (https://www.gminsights.com/industry-analysis/micro-combined-heat-and-ower-market).