Flexibility Offered in Terms of Energy Usage to Encourage Installation of District Heating and Cooling Market

The global district heating and cooling market is facilitated by favorable environmental laws, besides excellent ROI and government initiatives. The technology provides long-term cost savings and flexibility in fuel options, which has helped in driving its demand worldwide.
District heating and cooling (DHC) systems exhibit excellent flexibility in terms of using energy derived from various sources. However, the source used is determined based on the load profile and the condition of the utility grid. DHC system providers can also switch between heat sources when cost of heat generation varies. This not only monitors the overall cost incurred on operation but also enables running the system at higher capacities because unhindered supply of economical heat generation is ensured by the system. Spurred by these factors, and conducive regulatory incentive scheme enabling the companies to penetrate deeper, the global district heating and cooling market is forecast to exhibit strong growth in the forthcoming years.
According to Transparency Market Research (TMR), the global district heating and cooling market is likely to showcase a CAGR of 6.2% between 2016 and 2024. At this pace the market is expected to reach US$243.42 bn by the end of 2024. Based on energy sales volume, the market will demonstrate a 5.8% CAGR during the same time frame, and thus reach 12,187,491.8 tera joules by 2024.


Q: Which region will exhibit most lucrative prospects for the district heating and cooling market?
A: Asia Pacific, Europe, North America, and Rest of the World are the key regional segments in the global district heating and cooling market. Among these regions, Asia Pacific held the dominant share of 55% in the global market in 2015. As per TMR, the Asia Pacific market for district heating and cooling was valued at US$147.7 bn in 2015 and is expected to rise at an impressive CAGR through the forecast period. In terms of energy sales volume, the regional market is likely to exhibit a CAGR of 6.9% between 2016 and 2024.
In countries such as China, Japan, and South Korea, the demand for district heating and cooling is expected to be comparatively higher. Governments across these nations have created regulations impelling installation of district heating and cooling systems, thus creating lucrative prospects for sales. Besides Asia Pacific, the market is likely to exhibit promising trajectory in Europe.

Q: What new programs are adopted in recent years, which could boost the market?
A: In April 2017, Malaysia teamed up with the UN Environment to encourage the use of district energy and cooling in Iskandar, Malaysia, which is considered a growing place in southern Malaysia. The UN Environment along with the Iskandar Regional Development Authority (IRDA) led an initiative called the District Energy in Cities to help develop guidelines and other policies encouraging the uptake of district energy systems across Iskandar and other places in Malaysia.
In Europe, Sweden has shown immense success in meeting its climate goals and has owed much of its success to deploying district heating networks. The Environmental Protection Agency in Sweden has revealed that the district heating systems in Sweden has gone from almost completely powered by fossil fuels back in 1980s, to deriving nearly 90% of its energy needs from renewable and recycled sources in 2017.
As governments adopt such policies aimed at curbing dependence on fossil fuel for their energy needs, the demand for district heating and cooling will gain pace.
Some of the leading players operating in the global district heating and cooling market are Logstor A/S, ADC Energy Systems LLC, Emirates Central Cooling Systems Corporation (EMPOWER), Ramboll Group A/S, Emirates District Cooling LLC (Emicool), Emirates National Central Cooling Company PJSC (Tabreed), KELAG Wärme GmbH, Shinryo Corporation, Keppel DHCS Pte. Ltd., and Tekla Corporation. 

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