Market Opportunities in the CHP Sector

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
  • SOURCES
• ANALYSIS
  • The practice of capturing and using surplus heat from electricity generation has many applications and is well established
    • Combined Heat and Power (CHP) is the simultaneous generation of usable heat and power in a single process
    • CHP systems can be employed over a wide range of sizes, applications, fuels and technologies
    • There is significant variation in the cost, application and performance characteristics of established CHP technologies
    • Key capacity and efficiency metrics of the principal established and alternative technologies are wide ranging
  • CHP can make a significant contribution to sustainable energy goals, bringing environmental, economic, social and energy security benefits
    • Reduced cost, both for electricity consumers and electricity producers, is arguably the most important benefit that CHP offers
    • Great efficiency gains can be obtained in the form of waste heat utilisation and reduced transmission and distribution losses
    • CHP is a front runner in the EU' s battle to reduce CO2
    • CHP can play a significant role in combating climate change: UK case example
    • CHP can reduce the environmental footprint of providing energy
    • CHP can help curb Europe' s dependence on imported gas
    • CHP can ensure greater power quality, reduce vulnerability of the grid, and increase self sufficiency
    • Circa half of the combined European CHP installed capacity is accounted for by five main markets
    • In the remaining markets the share of CHP in total electricity production ranges from moderate to insignificant
    • The European CHP market lacks well-defined competitor, demand and supply structures
    • The 2004 Cogeneration Directive has created the foundations for arguably the most comprehensive European support framework
    • Current incentives to develop CHP fall short in many countries
    • European CHP continues to face significant barriers to growth
  • Two segments of the CHP industry are likely to benefit most from the current regulatory framework
    • Domestic and commercial micro CHP is set to be one of the high growth areas in the next few years
    • Biomass CHP is more likely to remain a niche market in most countries as it struggles to overcome significant hurdles
    • In many central and eastern European countries, district heating could yield strong and steady CHP growth in the medium term
    • European CHP installed capacity could double by 2025
• APPENDIX
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
  • List of Tables
    • Table 1: The estimated land use requirements for decentralised CHP generating capacity is 66 to 400 acres less than that of more traditional centralised generation methods
  • List of Figures
    • Figure 1: In general, cogeneration can be applied in all cases where electricity is produced by thermal combustion
    • Figure 2: CHP technologies are at various stages of commercialisation
    • Figure 3: Available CHP technologies currently exhibit a large variation in their technical characteristics
    • Figure 4: Heavy generators and consumers of electricity are more likely to break-even within an acceptable timeframe
    • Figure 5: If the CHP unit is displacing less efficient fossil fuel technologies gains can be higher than the 25% shown
    • Figure 6: Emissions from heating and cooling account for 47% of Europe' s total CO2 emissions
    • Figure 7: Average European gas consumption is expected to increase by 2% annually
    • Figure 8: The major European CHP markets can be categorised in three groups
    • Figure 9: The European CHP market does not have a typical unifying competitive structure with a defined set of participants competing for a defined customer base
    • Figure 10: The EU Cogeneration Directive does not prescribe specific support mechanisms for cogeneration: instead, this is left to the discretion of the member states
    • Figure 11: The relative efficiency of schemes aimed at boosting "good quality" CHP varies widely
    • Figure 12: A doubling of the current European installed CHP capacity by 2025 is achievable