OREANDA-NEWS. May 25, 2016. Combined heat and power installation, better known as CHP, is different from conventional power generation, as the large amount of heat generated during the process of generation of electricity is utilized for other practical purposes instead of being wasted. While traditional power plants discard their excess heat into the air or a nearby water body, CHP plants utilize the heat for productive purposes such as water heating, space heating, and others. Combined heat and power installation systems can significantly reduce energy-related carbon dioxide emissions. The global combined heat and power installation market is estimated to expand at a CAGR of 4.38% during the period between 2016 and 2024. The overall market was worth US\\$524.9 bn in 2014 and is anticipated to reach a valuation of US\\$812.8 bn by 2024.
What is the impetus behind the growth of the global combined heat and power installation market?

While the rising awareness about energy-efficient technologies and low fuel pricing have augmented the demand for installations of CHP systems, supporting policies and feed-in-tariffs (FiTs) offered by government bodies have also played a pivotal role in the growth of the global combined heat and power installation market. For example, this month, the New York State Energy Research and Development Authority (NYSERDA) re-issued its incentive programme for installation of CHP systems at eligible host sites. The incentive scheme has a budget of US\\$21 mn and under the revised regulations, micro CHP projects are now eligible to receive state funding. 

Which sector drives the demand from the global combined heat and power installation market?

CHP systems are widely employed in the industrial sector. In 2014, industrial application of CHP systems accounted for 66% of the overall market. In the industrial sector, large-scale CHP systems are usually installed. The noticeable difference between the utilization of CHP systems across various application segments is due to the low initial investment in the installation of large-scale CHP systems. In the commercial sector, CHP systems are witnessing widespread adoption owing to their high energy efficiency. In the U.S., a number of utilities providers are investing in CHP plants. For example, Duke Energy, the largest electric power holding company in the United States, is developing a 21 MW CHP plant to provide cleaner and cheaper energy to consumers. Other utilities providers are also following this path. While Texas-based Austin Energy operates a 4.3 MW CHP system, Florida Public Utilities is building a 20 MW CHP system.   

Which fuel type is cost effective for CHP systems?

While coal, biomass, oil, waste heat, and wood are the various fuel types used in CHP systems, natural gas accounts for the majority of the market. Though both coal and natural gas are easily available at low costs, utilization of coal in CHP is gradually decreasing due to the high emission of GHGs during the burning of coal. However, in regions such as Asia Pacific, where some of the largest coal reserves are present, installation of coal-fired CHP plants is anticipated to increase in the near future.