District Heating Market
The paradigm shift towards sustainability has been fueling district heating market trends. With increasing global energy demand, the need to use renewables has become more crucial than ever. Rising establishment of renewable energy systems to cater to growing consumer demand is anticipated to drive district heating market growth over 2020-2026. The requirement of sensible heat for commercial, residential and industrial applications will also positively impact the district heating industry outlook over the coming years.
As per Global Market Insights, Inc., district heating market size in 2019 was worth USD 150 Billion and is estimated to exceed production by over 14,000 PJ till 2026.
An exponential growth in urban population has been witnessed over the past few years. Most of the masses residing in rural areas and mid-size townships are opting to shift to urban dwellings. With rising urbanization, the requirement of energy for space and water heating has also observed an increase. This in turn has fueled the demand for district heating systems. In recent times, real estate barons are also seen investing heavily in new properties and renovating older ones. The expansion of the overall real estate industry will thus further boost product demand over the forecast timeline.
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Rigorous government regulations pertaining to green-house gas regulations, along with positive outlook of masses towards adoption of renewable sources to generate heat and energy is estimated to change district heating market trends over the coming years.
District heating systems are expected to be deployed on a large scale in the residential sector, owing to rising migration towards cities. In line with environmental concerns, this has led to increasing utilization of energy efficient heating systems. The smart city revolution has also led to rising installation of smart home management systems, which would help foster district heating market size from residential sector over the analysis period.
Combined heat & power-based district heating systems are highly sustainability and also ensure reduced energy losses. Enhanced energy supply efficiency offered by these systems are also escalating their deployment across the globe. Major economies including China and the U.S. have been investing heavily in combined heat and power systems on account of a supportive regulatory scenario, offering lucrative growth opportunities to district heating industry players.
The capability of these systems to limit GHG emissions, and reasonable operation costs along with minimal thermal losses offered by the technology are estimated to support district heating industry share in the years to come.
Growing awareness toward utilization of clean energy, along with adoption of optimal energy consumption is anticipated to change district heating market landscape over the coming years. Rising concerns pertaining to climate change have resulted in an increase in number of initiatives undertaken toward clean energy generation. This has also led to the rising prevalence of energy efficient buildings, which is estimated to augment product adoption.
Major industry players contributing towards district heating market include Goteborg Energi, Fortum, STEAG, Statkraft, Ramboll and Vattenfall, amongst others. These companies are adopting strategies such as mergers & acquisitions and partnerships to expand production capacity along with focusing on developing more efficient district heating systems.
Moreover, growing focus of industry players toward development of energy efficient solutions that comply with new standard emissions to gain a competitive advantage over other industry participants, will also change business outlook over the analysis period.
Author Name : Aakriti Kakkar
Europe district heating market to observe substantial gains over 2018-2024, stringent energy sustainability protocols to drive the regional demand
Touted as offering one of the most reliable and eco-friendly heat delivery methods, the district heating market allows the flexibility to tap into multiple sources for generating heat, including renewable energy, and supply it to residences as well as commercial spaces. Government mandates across all the regions are indicative of the efforts to reduce the use of energy sources which emanate high ratios of green house gases and adopt alternatives with low CO2 emissions. The district heating industry segment has evolved to supply heating that is more efficient as compared to traditional systems and more pocket-friendly than having individual boilers. Further, the worldwide upsurge in energy demand alongside the massive urbanization and industrial development being observed will stimulate the expansion of district heating market.
Denmark District Heating Market Size, By Source, 2017 & 2024 (USD Billion)
With the potential to achieve considerable reduction in energy wastage and bills for consumers, the district heating market reached an estimated valuation of over USD 180 billion in 2017. The facility to incorporate diverse energy sources into a centralized heat generation and distribution network has presented vast opportunities for governments to decarbonize heat sources in the long run. Such a network can be supplied with surplus energy from power plants, industrial processes, waste management facilities, geothermal sources and gas-based or biogas fueled CHP units. Consequently, a large quantity of valuable energy will not be lost without cause and can be used to generate heat for utilization in homes and businesses. Even unused energy obtained from sustainable sources like wind or solar installations can now be routed to a district heating facility. In addition, not being dependent on a solitary heat source will ensure substantial reliability and service continuity, a key factor in the impulsion of the district heating market.
To outline the present scenario of the district heating industry, U.K. is a prominent region having a magnitude of facilities set up to supply cost-effective, environment-friendly and quick heating services. As per records, there are more than 17,000 heat networks in the U.K., with approx. 91% located in England and 6% in Scotland. Governments in the U.K. are ramping up efforts to encourage the district heating market, with a latest example being the Glenrothes Energy Network in the Glenrothes town of Scotland.
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Providing further details regarding the Glenrothes Energy Network project, it is a GBP 24 million (USD 31.72 million) community heating scheme being developed with the collaboration of Fife council, RWE and the Scottish government. The Fife Council had revealed its target to reduce carbon emissions by 42% by 2020, and the new heat network will help in attaining that mark. The energy center will be using heat sourced from RWE’s biomass CHP plant in Markinch, for supplying low-carbon heating to commercial establishments and households in the area. It is slated to lower utility bills, avoid fuel poverty and contribute towards climate change. The plant is fueled by wood waste and generates up to 53MW electricity along with heat. The Glenrothes Energy Network represents the lucrative prospects of CHP based district heating market, which is expected to grow with a rate of over 4% over 2018-2024.
Moving to the district heating industry in Europe, Denmark is a leading contributor to renewable energy development and district heating processes. The country had introduced the Heating Supply Act under which substitution of traditional heating systems with new district heating systems was made obligatory for upcoming buildings. It was reported that over 63% residential population used district heating in 2017. Elaborating Denmark’s accomplishments in the field, the Smørum Kraftvarme power plant in Smørum gave a contract to Aalborg CSP in 2017, to build an 8MW solar field spanning an area of 11,312m2 and capable of producing 5,568MWh of heat annually. The solar plant will undercut carbon emissions by at least 1,100 tons per year and give a significant boost to the district heating capabilities of Denmark, which already has multiple heat networks across its kingdom. Several government aided schemes to propagate the importance of a centralized heating system in other parts of Europe are certain to bolster the Europe district heating market share in the coming years.
To summarize, the characteristics that give the district heating industry a distinctive advantage are economies of scale, harness of waste energy, low cost operations and the capacity to reach a large number of consumers. The competitive landscape of the district heating market consists of eminent players like RWE AG, Fortum, NRG Energy, Dong energy, Hafslund, among others that offer comprehensive heating solutions for communities and businesses.
Author Name : Pankaj Singh