The district heating market is expected to grow from USD 170.7 billion in 2018 to USD 203.0 billion by 2023, at a compound annual growth rate (CAGR) of 3.5% during the forecast period. The major factors driving the district heating market include increasing demand for energy-efficient and cost-effective heating systems and growing urbanization and industrialization.
Renewable heat source to grow at highest CAGR in global district heating market during forecast period
Renewable heat sources help in meeting the rising energy needs, improving efficiency, reducing greenhouse gas emission, and improving climate conditions. Geothermal heat source uses one or more production fields as heat sources to supply district heating to residential and commercial buildings. Solar heating converts energy from the sun into heat; it uses solar panels that are often arranged on a building or concentrated in solar farms to facilitate a clean heat source. As a CO2-free power source, the environmental impact of the solar heat source is significantly smaller than other power generation methods.
CHP plant type to hold major share of global district heating market during forecast period
CHP helps reduce the capital investment, provides economies of scale, reduces heat losses to the environment, and substitutes the use of fossil fuels for district heating, which, in turn, lead to the reduction of greenhouse gas emissions. Moreover, CHP makes a district heating system an efficient energy solution for residential and commercial entities that show significant demand for district heating.
Residential application to dominate global district heating market during forecast period
Favorable government incentives such as more focus on energy-efficient products have led to the increased adoption of district heating in residential application. Moreover, continuous urban development is boosting the demand for district heating. Growing urbanization leads to organized infrastructure developments suitable for district heating solution. Growing urban cities create a demand for sustainable, efficient, and reliable utility services including district heating and electricity production.
Europe to hold major share of district heating market from 2018 to 2023
Europe is the largest market for district heating as a large number of leading players are based in this region. Increasing technological advancements, in terms of connectivity, digitalization, and IoT integration; rising demand for energy-efficient solution; and growing initiatives to reduce greenhouse gas emissions are the crucial factors driving the growth of this market in Europe. Due to the legislative framework of the European countries including Germany, the UK, and France, the penetration of district heating in new buildings is expected to increase in the upcoming years, especially gated societies. As a result, the market for district heating is expected to hold a major share in this region.
Fortum (Finland), Vattenfall (Sweden), Engie (France), Danfoss (Denmark), NRG Energy (US), Statkraft (Norway), Shinryo Corporation (Japan), LOGSTOR (Denmark), Vital Energi (UK), Kelag (Austria), Goteborg Energi (Sweden), FVB Energy (Canada), Alfa Level (Sweden), Ramboll (Denmark), Savon Voima (Finland), Enwave Energy (Canada), Orsted (Denmark), Helen (Finland), Keppel DHCS (Singapore), and STEAG New Energies (Germany) are among the major players in the district heating market.
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Source: ASDReports - Market Research
Date: Dec 5, 2018