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CHP Market Overview:

  • The system of generating heat and electricity simultaneously through burning various fuels such as oil, natural gases and biofuels is known as Combined Heat and Power generation (CHP).
  • Combined heat and power are a very useful technology for sites which requires constant demand for both heat and electricity.
  • Based on Fuel, Technology, Capacity and end-user, Global CHP market can be classified as below;
    • The Fuel segment comprises Natural Gas, Coal, Biomass, Others.
    • Technology/Prime Mover includes Combined Cycle, Steam Turbine, Gas Turbine, Reciprocating Engine, Others.
    • By Capacity consists of below 10 MW, 10–150 MW, 151–300 MW, and above 300 MW.
    • The end-user segment consists of residential, commercial and industrial.
  • As per the research report of AGR, global Combined Heat and Power Market expected to exceedUSD 30 billion in 2019 and anticipated to grow at a CAGR of ~6-8% by 2025;
    • Greater than 300 MW capacity expected to hold the largest market share by 2025. This capacity mainly caters to the utilities, district heating & cooling end-user.
    • Phasing-out of coal-based power generation has given rise to large-scale natural gas-fired cogeneration plants.
    • By fuel, natural gas segmentexpected to grow at a high CAGR during the forecast period.
    • Transition towards natural gas-fired power generation and the increasing need of heat and steam in industries and municipal townships are the key market is drivers.

CHP Market Outlook:

  • Combined Heat and Power Industry demandanticipated to witness an upsurge owing to rising investments toward smart infrastructures coupled with growing inclination subject to consumption of renewable energy.
    • Refurbishment of existing energy generation plants across the globe will push the industry outlook.
    • Growing tendency towards smart heating systems along with R&D technological programs shall complement the business outlook.
    • Government incentives and rebates across the CHP industry shall supplement the business outlook.
    • Ongoing technological developments across CHP systems will toughen the product landscape.
    • Rapid investments toward renewable technologies to control carbon emissions shall push the industry outlook.
  • Asia-Pacific regionexpected to dominate the regional combined heat and power industry trends in future.
    • In 2019, Asia-Pacific and Europe collectively held over 70% of CHP market share.
    • In 2017, the Chinese government abandoned around 100 pending coal-fired power plants with a projected capacity of 120 GW.
    • Huge opportunity exists due to growing distributed power generation in North America and Asia-Pacific.
  • Over the past few years market trends of combined heat and power generation has been attractive and investments in this market can prove very fruitful.
  • Rising adoption of reciprocating engine and steam turbine power plants across industrial and manufacturing sectors owing to reduced emissions will propel the product demand.

CHP Market Growth Drivers and Trends:

Most primary factors driving the global CHP market;

  • Increasing demand for energy efficiency in the industries.
  • Use of natural gas for power generation is on the increase.
  • Rising concerns towards GHG emissions.
  • Promising government norms including tax rebates, financial support and feed in tariff will boost the industry landscape.
  • Increasing inclination toward adoption of biomass fueled systems coupled with rising applicability of CHP systems.
  • Increasing need to digitalize the power sector, Reliable and efficient energy consumption.

Continuing demand for captive power generation coupled with customer inclination toward sustainable energy will augment the industry growth. Intensifying adoption of renewable energy consumption over high sulfur fuels along with government norms of low-carbon emission will positively influence the combined heat and power industry demand.

Rise in distributed power generation and emerging technologies such as fuel cell-based micro-CHP has opened new opportunities for growth in the Asia-Pacific region.

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Challenges disrupting the market:

However, CHP is market growth potential is getting hampered due to some factors like;

  • High installation and maintenance costs
  • Rise of renewable power generation
  • Vulnerabilities in energy industry

Maintenance costs of CHP systems are also high due to the complex assembly of the system, which includes different components such as prime mover, heat recovery system, heat and steam pipes among others.  Increasing demand for renewable power generation such as solar and wind energy poses the biggest challenge for the Combined Heat & Power market.

CHP Market Players Perspective:

The combined heat and power market are fragmented. Some of the key players operating in the HP market includes 2G Energy,  ABB, AB Holding, Aegis Energy, BDR Thermea, Bosch Thermo technology, Clarke Energy, Caterpillar Energy Solutions (MWM), Capstone, CENTRAX Gas Turbines, Cummins, ENER-G Rudox, Fuel Cell Energy,  General Electric, Kawasaki,  MAN Diesel & Turbo, Mitsubishi Hitachi Power Systems, Siemens, Veolia, Viessmann Werke, Wartsila and Yanmar.

Demand of technological advanced CHP systems is acting as the focal point of industry players.

New product launch is the key strategy adopted by most of the large companies in this market.

  • Honda Motor Corporation. Ltd. and Vaillant together have launchedenvironmentally friendly innovative product called new micro combines heat power systems, for residential sector.

CHP Market Research Scope:

The base year of the study is 2019, with forecast done up to 2025. The study presents a thorough analysis of the competitive landscape, considering the market shares of the leading companies. These gives the key market participants with the necessary business intelligence and help them understand the future of the CHP Market.

The assessment includes the forecast, an overview of the competitive structure, market trends, market demands, market drivers, market challenges, and product analysis.

The market drivers and restraints have been evaluated to gauge their impact over the forecast period.

The report further identifies the key opportunities for growth while also detailing the key challenges and possible threats.

The key areas of focus include opportunities areas for Combined Heat and Power Market.

Author – Mr. S. Ashok
Associate Director – Operations
Connect to the author of the report at or contact us at