Combined Heat and Power Market by Prime Mover (Gas Turbine, Steam Turbine, Reciprocating Engine, Fuel Cell, Microturbine), Capacity (Up to 10 MW, 10-150 MW, 151-300 MW, Above 300 MW), Fuel, End User and Region - Global Forecast to 2029

Combined Heat and Power Market by Prime Mover (Gas Turbine, Steam Turbine, Reciprocating Engine, Fuel Cell, Microturbine), Capacity (Up to 10 MW, 10-150 MW, 151-300 MW, Above 300 MW), Fuel, End User and Region - Global Forecast to 2029

The global combined heat and power market is projected to reach USD 39.2 billion by 2029 from an estimated USD 30.4 billion in 2024, at a CAGR of 5.2% during the forecast period. The increasing demand for combined heat and power is driven by their efficient utilization of heat, reduced carbon emissions, simultaneous electricity and heating demand and increasing reliance on electric heating.

“10-150 MW segment is expected to emerge as the largest segment based on capacity.”

Based on capacity, the combined heat and power market has been segmented into up to 10 MW, 10 MW to 150 MW, 151 MW to 300 MW and above 300 MW. This segment is increasing due to Ongoing advancements in CHP technology, such as improved engine efficiency, enhanced control systems, and integration with renewable energy sources, making systems within the 10-150 MW range more efficient, reliable, and attractive to end-users. Additionally, 10-150 MW range enables significant cost savings by reducing energy expenses through efficient onsite power generation and heat recovery. This can lead to lower operational costs and improved competitiveness for industrial and commercial facilities.

“Gas turbine is expected to be the second largest segment of the combined heat and power market, by prime mover.”

Based on prime mover, the combined heat and power market has been segmented into gas turbine, steam turbine, reciprocating engine, fuel cell, microturbine, others. The gas turbine segment is the second largest segment in the combined heat and power market as they offer favorable economics for CHP projects, with relatively low operating costs, high efficiency, and potential revenue streams from electricity sales and heat recovery. This economic viability makes gas turbine-based CHP systems financially attractive for end-users across various industries and sectors and they are known for their high efficiency in converting fuel into electricity and thermal energy. This efficiency makes them attractive for CHP applications, where maximizing energy output is crucial for cost savings and environmental sustainability.

“Europe” is expected to be the second largest region in the combined heat and power market.”

Europe is expected to be the second-largest region for combined heat and power (CHP) systems market between 2024–2029 due to its strong emphasis on energy efficiency, renewable energy integration, and climate goals. Robust regulatory frameworks, supportive policies, and significant investments in CHP infrastructure contribute to Europe's leading position in the global CHP market. Moreover, the region's mature industrial base, coupled with a focus on reducing greenhouse gas emissions, drives demand for efficient and sustainable energy solutions like CHP systems.

Breakdown of Primaries:

In-depth interviews have been conducted with various key industry participants, subject-matter experts, C-level executives of key market players, and industry consultants, among other experts, to obtain and verify critical qualitative and quantitative information, as well as to assess future market prospects. The distribution of primary interviews is as follows:

By Company Type: Tier 1- 65%, Tier 2- 24%, and Tier 3- 11%

By Designation: C-Level- 30%, Director Levels- 25%, and Others- 45%

By Region: North America- 20%, Europe- 30%, Asia Pacific- 50%

Note: Others include product engineers, product specialists, and engineering leads.

Note: The tiers of the companies are defined on the basis of their total revenues as of 2022. Tier 1: > USD 1 billion, Tier 2: From USD 500 million to USD 1 billion, and Tier 3: < USD 500 million

The combined heat and power market is dominated by some major players that have a wide regional presence. The leading players in the market are GE (US), Siemens Energy (Germany), Veolia (France), Wartsila (Finland), and 2G Energy (Germany).

Research Coverage:

The report defines, describes, and forecasts the global combined heat and power market, by capacity, fuel, prime mover, end user and region. It also offers a detailed qualitative and quantitative analysis of the market. The report provides a comprehensive review of the major market drivers, restraints, opportunities, and challenges. It also covers various important aspects of the market. These include an analysis of the competitive landscape, market dynamics, market estimates, in terms of value, and future trends in the combined heat and power market.

Key Benefits of Buying the Report

Analysis of major drivers (Government programs and incentives to promote CHP), restraints (Increased installation and maintenance costs of CHP systems), opportunities (Rise in deployment of micro-CHP systems), challenges (Damage to prime movers due to impurities in biogas fueled CHP plans) influencing the combined heat and power market.

Product Development/ Innovation: Players involved in the combined heat and power market are investing in research and development activities and are coming up with new products in order to maintain their competitive edge in the market. General Electric introduced the 7HA.03 gas turbine, boasting increased capacity and efficiency compared to its predecessor, the 7HA.02. With a net output of 430 MW and a net efficiency of 43.2%, it offers an additional 134 megawatts of power.

Market Development: The global combined heat and power market is experiencing robust development, due to Advancements such as higher efficiency gas turbines, improved heat recovery systems, and integration with renewable energy sources contribute to expanding the capabilities and appeal of CHP systems. Supportive policies and incentives from governments and regulatory bodies incentivize the adoption of CHP systems. Measures such as feed-in tariffs, tax credits, and renewable energy targets encourage investment in CHP projects and create a favorable market environment for manufacturers and developers.

Market Diversification: 2G Energy AG, a prominent provider of gas-fueled CHP systems worldwide, has forged a framework agreement with Centrica Business Solutions UK Ltd. This agreement underscores their dedication to supplying combined heat and power (CHP) systems, marking a strategic partnership between the two entities.

Competitive Assessment: In-depth assessment of market shares, growth strategies, and service offerings of leading players like GE (US), Siemens Energy (Germany), Veolia (France), Wartsila (Finland), and 2G Energy (Germany) among others in the combined heat and power market.