(I-BusinessNews.Com, July 26, 2021 ) The District Heating Market size is forecast to reach $203.42 billion by 2026, growing at a CAGR of 4.7% from 2021 to 2026. District heating also known as teleheating which is a system of distributing heat generated in a centralized location through insulated pipes for residential and commercial heating requirements like space heating and water heating. The heat is generally achieved by geothermal heating, central solar heating and heat waste from the nuclear power plants, air conditioning and industrial refrigeration systems. District heating with combined heat and power is the cheapest method of cutting carbon emissions and has lowest carbon footprints of all fossil generation plants. As the trend has shifted from power generation through fossil fuels to natural gas it has good percentage of market share in district heating market across the world. The benefits of natural gas are it is cheaper and releases lower carbon emissions with higher efficiency.
District Heating Market Segment Analysis – By Heat Source
District Heating market is dominated by coal which accounts for 41% of the market in 2020. District heating systems now-a-days have the flexibility of allowing substitution to environmentally friendly alternatives. Renewable energy is energy generated by natural sources and includes geothermal heating, biomass, wind energy, water energy and solar energy. These energies are greenhouse neutral energies which doesn’t increase the concentration of greenhouse gases. Heat sources which are usually utilized in electricity generation such as water and wind energy are rarely used in district heating but the majority of renewables are used to a high degree in district heating.
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District Heating Market Segment Analysis – By Plant Type
The core element of many district heating systems is a heat-only boiler stations. The CHP segment how ere is set to grow faster at 5.4% CAGR through 2026. A co-generation plant which is also called as combined heat and power (CHP) is added in parallel with the boilers. Both plants are based on combustion of primary energy carriers. The only difference between CHP and boiler is in cogeneration plant, heat and electricity is generated simultaneously but in boiler stations only heat is generated. CHP plant works based on supply of high temperature heat from a biomass boiler or fossil fuel driven boiler which can be easily and efficiently transported to other locations. Thus district heating systems are well suited for CHP because they expand the potential thermal load and reduce the requirement for capital investment.
District Heating Market Segment Analysis – By Geography
Asia-Pacific is expected to witness highest growth in the forecast period at 6.2% through 2026. Increase in number of households connected to district heating, rise in demand for thermal comfort, growing urbanization, demand for energy-efficient and cost effective heating solutions are increasing the market growth. In addition to those Increase in population, rise in disposable income and growth in government initiatives are the major factors that drive district heating market growth in this region.
District Heating market Drivers
Implementation of district heating projects in smart cities
District heating companies are focusing on increasing investment to develop smart cities in multiple countries across the world. They are more focused on High capacity heating boilers which are more cost effective and generate lower emissions than individual heating systems even if based on fossil fuels. Heat distribution networks would help smart cities generate energy savings if they use solar, geothermal and biomass energies. By using these techniques it will further increase the market growth.
Increasing demand for energy-efficient and cost-effective heating systems
Traditional heating is completely different from modern district heating. Earlier there was only specific type of heat source like coal, oil and natural gas. In district heating, heat is produced at centralized location with several fuel types and it is extremely flexible when it comes to choice of heart source. It can accommodate all types of heat sources like solar, wind, biomass and geothermal. District heating has the flexibility to switch from one fuel source to another with less carbon emissions and high efficiency. This increases production and supply which offers cost-effective and energy efficient to consumers which drives the growth of the market.
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District Heating market Challenges
Robust transportation equipment
One of the challenging factors in district heating market is transportation of heat from source to end users without any loss. Transporting heat pipes carrying heat must be properly insulated and robust while transporting if not it will result in heat loss. Losing heat from distribution pipes while carrying equipment is loss of money and heat. Equipment like heat exchangers and smart meters are needed to prevent the heat loss during distribution. Hence, robust equipment is a challenging factor for growth of district heating market.
District Heating market Landscape
Product launches, acquisitions, and R&D activities are key strategies adopted by players in the District Heating market. The District Heating market is dominated by major companies such Fortum, Vattenfall, ENGIE, Danfoss, NRG Energy, StatKraft, Shinryo Corporation, LOGSTOR, Goteborg Energi and Kelag.
Acquisitions/Technology Launches/Partnerships
In May 2020, ENGIE Austria acquired “Naturwärme Montafon Biomasseheizkraftwerk GmbH”
Key Takeaways
The demand for district heating system is increasing due to surging urban population along with rising investment across the real-estate industry.
District heating with combined heat and power is the cheapest method of cutting carbon emissions and has lowest carbon footprints of all fossil generation plants.
Better air quality, sustainability and low thermal losses are prominent features of district heating systems.
District heating market in APAC is expected to grow at the highest CAGR in the forecast period due to growing urbanization and increasing demand for energy-efficient and cost-effective heating solutions.
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