Low Fuel Requirement and Cost Saving Achieved Boosts Adoption of District Heating and Cooling Systems

Excellent return on investments, long term cost savings, and government incentives are three important factors that have led to the growth of the global district heating and cooling systems market. The strict environmental laws and the flexibility of fuel options are also acting as a key driver for the growth of this market. The growing concern regarding energy efficiency of systems is the important in aiding the growth of the market, driving it to exhibit a 5.8% CAGR in terms of energy sales volumes from 2016 to 2024, as per a research report on the global district heating and cooling systems market, published by Transparency Market Research (TMR). The same report states that by revenue, the market is likely to expand at a 6.2% CAGR between 2016 and 2024 and be worth US$243.42 bn by 2024. By energy sales volume however, the market is estimated to reach 12,187,491.8 tera joules by 2024.

Given below is a blog post that answers three important questions regarding the global district heating and cooling systems market.

Q. Which distribution tool or machinery is gaining maximum traction?

The different distribution tools and machinery used for district heating and cooling are: valves, pipes, and pressure pumps. Of these, the pipe segment is leading with 60% share of the total market in 2016. The pipe segment is likely to hold its leading position through 2024 on account of the continuous expansion of pipeline infrastructure across the globe, falling prices of piples, and growing need for renovations. The demand for pressure pumps will also see a definite rise in the years to come on account of the growing number of DHC systems across the globe and growing networks of distribution infrastructure. In addition to this, the predefined expansion targets will also help the market for pressure pumps to grow. The growing number of sub-stations and increasing lengths of pipelines are two factors that will also lead to the growth of the valves segment.

Q. Which regional segment will emerge lucrative in the years to come?

Asia Pacific is anticipated to offer lucrative growth opportunities within the district heating and cooling market. The region accounted for 55% of the market in 2015 and was worth US$147.7 bn. It is estimated that Asia Pacific will expand at a 6.9% CAGR in terms of energy sales volume between 2016 and 2024.  China, Japan, and South Korea are among the key nations in this region which are boosting the district heating and cooling market. The importance of energy efficiency and renewable energy sources is being realized and thus, there are various supporting government initiatives, which are boosting the implementation of district heating and district cooling systems across municipalities in Asia Pacific. Europe is estimated to be the second leading regional segment for the DHC market and is likely to expand at a 5.1% CAGR between 2016 and 2024. Continuous low temperature for a major part of the year and only a few months of summer has boosted the sales of district heating across Europe. 

Q. What are the factors driving the growth of the global DHC market?

DHC systems possess excellent flexibility as they allow different kinds of energy options, depending on the load profile and utility grid condition. Thus, DHC system operators can switch from available heat sources in the case of sudden increase in the cost of heat generation, thus ensuring cost of operation is in check and also helps in running the system at high capacities. Thus, DHC systems enable a steady supply of economical heat generation options. The favorable Regulatory mechanisms and incentives from governments are behind the fast growth of the global district heating and cooling market. The key factor boosting the growth of this market is the overall cost saving achieved. The adoption of DHC systems have led to a remarkable growth in the overall boiler and staffing expenditures and also helped in enhancing the efficiency of boilers. Moreover, the fuel requirement for running these systems is much low. This makes them environmentally viable than traditional heating and cooling systems. In addition to this, DHC systems can scale up and require less space for operation, both important factors driving their adoption.


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