The global micro combined heat and power (micro-CHP) market is expected to post a compound annual growth rate (CAGR) of more than 23% during the period 2019-2023, according to the latest market research report by Technavio.
Micro-CHP systems are growing in popularity across the world as they can achieve efficiency by more than 90%. These systems have the potential to fulfill the demand for heating space or water and cooling in buildings, as well as provide electricity to supplement the grid supply. Moreover, the mode of operation of micro-CHP systems support the grid integration of various renewable energy sources, which can be intermittent and variable. Hence, micro CHP helps in balancing renewables by generating power close to the point of consumption. Further, micro CHP systems eliminate the need for developing new T&D infrastructure by avoiding T&D losses, thereby reducing grid congestion during high electricity demand.
According to Technavio, the growing need for clean energy fuel will have a positive impact on the market and significantly contribute to its growth over the forecast period. The research report also analyzes other important trends and market drivers that will affect market growth over 2019-2023.
Growing Need for Clean Energy Fuel
With the rising global population and a proportionate increase in urbanization, there has been a significant increase in the demand for electricity. This has increased carbon dioxide emissions resulting in several initiatives that are being undertaken to reduce emissions. These initiatives are encouraging countries to opt for environment-friendly power generation technologies, leading to the increasing adoption of micro CHP for fulfilling the demand for heat and electricity. Micro-CHP systems can employ biogas, natural gas and fuel cells, which are considered as clean energy sources, for power and heat generation. Micro-CHP systems can provide concurrent production of electricity and useful thermal heat for heating and cooling applications using a single source of energy.
“To increase the adoption of micro CHP for improving the efficiencies of power generating systems and reducing greenhouse gas (GHG) emissions, government agencies across the world are introducing several regulations. For instance, the government in Germany introduced several regulations for supporting alternative and more efficient energy generation sources. Such initiatives, undertaken by government agencies, will boost the adoption of micro CHP systems during the forecast period,” says a senior research analyst at Technavio.
The market research report segments the global micro-CHP market by technology (fuel cells, and engines) and geographic regions (Asia-Pacific/APAC and rest of the world/ROW).
The fuel cells segment held the largest micro-CHP market share in 2018. The growth of this segment is mainly driven by the environmental benefits and initiatives to commercialize the fuel-cell micro CHP.
The APAC region led the market in 2018, followed by ROW. The market growth in APAC can be attributed to the increasing demand for clean power, favorable government regulations and government initiatives to increase the adoption of micro CHP in the region.