Research Overview

The global combined heat and power (CHP) market is poised to grow at a moderate CAGR of 4.8% from 2020 to 2030. The industrial and utility segment is expected to account for the major share of CHP installations throughout the forecast period. From a technology standpoint, gas-based CHP will continue to dominate the market.

Favorable legislation will continue to propel market growth. A number of government initiatives will drive energy generation from clean sources; political willingness will also be an important growth driver throughout the forecast period. As governments prioritize climate change, cogeneration supported by distributed and onsite power generation has come to the forefront as one of the solutions proposed to achieve energy efficiency. Key factors for cogeneration adoption are energy efficiency requisites, energy conservation efforts, favorable government initiatives, rising energy prices, the drive toward carbon neutrality, greater primary energy savings, grid ability to complement variable renewables, and resilience. Other trends expected to play a major role in the CHP market of the future are fuel diversification, including hydrogen and renewable fuel-based systems to transition to net-zero-carbon systems and greater installation of high-efficiency systems (replacing traditional systems).

As future grids will become more autonomous, advanced digital services will enable reduced maintenance costs and downtime amidst improved revenue opportunities for stakeholders across the value chain. OEMs will look to stay ahead of the competition through the use of AI and Big Data to track and predict grid conditions and support smart/optimized systems with CHP and DERs. The as-a-service business approach that includes the build, own, and operate model for guaranteed performance and energy savings will also proliferate the market, especially in the commercial and industrial segments. Based on end-user preference, technical know-how, and financial ability, as-a-service models will help the end customer leverage all the direct benefits of CHP and on-site power production to mitigate price, downtime, and operational risks.