According to a new report from Pike Research, a part of Navigant’s Energy Practice, the market for combined heat and power systems, or CHP, in commercial buildings will grow from $2.2 billion in 2012 to $11.2 billion in 2022. The Environmental Protection Agency sees CHPs as an efficient, clean, and reliable approach to generating power and thermal energy from a single fuel source, and the agency actively seeks partners in its quest to see more of these systems used. According to the United States Clean Heat & Power Association, these systems currently supply 12 percent of the U.S. generating capacity, and they can be up to 80 percent efficient.
But while current installations of CHPs in commercial buildings are mostly confined to developed markets in Europe, South Korea, Japan, and the United States, over the next decade the Asian Pacific will be the hottest market with a compound annual growth rate of nearly 20 percent. Growth rates in Africa and the Middle East will also be high, but these markets will be dwarfed by those in Europe, North America, and Asia Pacific.
To date, the market has been limited by high upfront capital costs. However, a growing number of commercial users – from hospitals to schools to business parks – are installing CHP systems to reduce operating expenses, improve power reliability, and reduce carbon emissions.
“Falling natural gas prices in the United States and expanding policy incentives across Asia Pacific and Europe are driving an increase in commercial CHP installations,” says senior research analyst Mackinnon Lawrence. “While applications to date have been limited to large facilities, such as hospitals and universities, with near 24/7 thermal and electrical loads, improved economics around smaller installations and advances in prime mover technologies are opening up opportunities across previously untapped segments, including smaller retail, sports clubs, and airports.”
Europe is currently the leading market for commercial CHP installations, with North America a close second.
The Pike Research report, “Combined Heat and Power for Commercial Buildings”, analyzes the global market potential for commercial CHP systems for a range of building applications – such as hospitals, universities, hotels, casinos, airports, and others – using technologies including internal combustion engines, fuel cells, Stirling engines, and Organic Rankine Cycle. The study includes in-depth assessments of leading countries for the manufacture and adoption of commercial CHP systems, the technologies utilized in such systems, and the key industry players engaged in this market. Worldwide market forecasts, segmented by region, are provided through 2022 for system shipments, installed capacity, average installation capacity size, and revenue.