In 2023, the global district heating market is estimated to be worth US$ 179.19 billion. Global demand for district heating solutions is expected to grow at a 4% CAGR to $265.24 billion by the end of 2033.
District heating is a centralised system that distributes heat to residential, commercial, and industrial buildings via a network of insulated pipes. It is an efficient and environmentally friendly type of heating since it uses waste heat from a variety of sources, including power plants, industrial activities, and renewable energy systems. The growing emphasis on energy efficiency, decarbonisation, and sustainable urban development is driving up the demand for district heating systems.
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Growing awareness of climate change, combined with the increasing need to cut greenhouse gas emissions, is driving demand for sustainable heating solutions. District heating systems, which may use waste heat and integrate renewable energy sources, are viewed as a viable strategy to attain carbon neutrality in heating.
District heating systems are rapidly incorporating renewable energy sources such as solar thermal, geothermal, biomass, and waste-to-energy into their heat generation mix. This integration helps to reduce reliance on fossil fuels while encouraging the use of locally available renewable resources.
Support and favourable policies from numerous governments are critical to the development of district heating systems.
Several governments across the globe are introducing incentives, subsidies, and regulations to promote the adoption of district heating systems as a part of their energy transition strategies.
Retrofitting existing buildings with district heating infrastructure presents a significant opportunity for market players. Many old buildings rely on inefficient and polluting heating systems and upgrading them to district heating systems can lead to substantial energy savings and emission reduction.
Key Takeaways from Market Study:
- The global district heating market is projected to reach US$ 265.24 billion by 2033.
- Sales of CHP heating systems are forecasted to increase at a CAGR of 5% between 2023 and 2033.
- Demand for district heating systems in Germany is predicted to grow at a CAGR of 4% during the next 10 years.
- The market in Japan is set to expand at a CAGR of 3.5% over the decade.
“Technological advancements such as smart heat meters, digital control systems, advanced heat storage solutions, and intelligent heat distribution networks are driving the growth of the district heating market,” says a Fact.MR analyst.
Recent Market Developments
- Two solar heating systems were provided by Savosolar PLC to NewHeat SAS in June 2020.
- Fortum installed a carbon-neutral district heating network in Espoo in August 2021.
Competitive Landscape:
To serve more customers and increase their market share, major players are focussing on expanding their district heating networks. This includes identifying suitable places for network expansion, collaborating with local governments and developers, and making the necessary infrastructure expenditures to connect more customers.
- Manufacturers are also actively working and developing ties with other industry players to develop integrated energy systems, gain access to cutting-edge technologies, and share information, such as technology companies, energy providers, and local governments.
- Oxelö Energi AB and Vattenfall AB inked a milestone deal in December 2021 to develop a long-term, sustainable district heating system in Oxelösund. The deal cleared the way for connecting Oxelösund's district heating network to Vattenfall's cutting-edge biomass-fired combined heat and power (CHP) facility known as Idbäcksverket, located in Nyköping.
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