3 Developments Propelling District Heating Market Expansion

District heating systems form a crucial part of the heating sector’s decarbonization plan since they allow the integration of clean and flexible sources of energy in the energy mix, which is otherwise challenging at the separate building level in the dense urban areas. The increasing government focus on implementation of these cost-effective heating systems for bringing down carbon emissions across different regions will augment the global district heating market growth. 

Over the years, regulatory bodies from across the world have implemented stringent policies for the development of sustainable solutions to reduce the dependence on conventional fuel for heat generation from the environment. Although low carbon district heating solutions have been adopted by various cities, almost 90% of the source of global district heat generation still relies on fossil fuels.

This has led several district heating companies to emphasize on capacity expansion and product development strategies for rolling out comprehensive products in the market.

Mentioned below are some of the trends that will bolster the overall industry value in the coming years:

1.    Measures taken to curb GHG emissions in APAC region

Asia-pacific region accounts for a considerable share of world energy consumption and is most vulnerable to climate change. The region is also responsible for half of the world’s global greenhouse gas emissions.

Therefore, governments across the region are making increasing investments to accelerate the adoption of sustainable technologies along with application of stringent efforts to decarbonize the heating sector with integration of renewable resources. Furthermore, fast paced urbanization and rising demand for cost-effective heating solutions is projected to pave way for district heating solutions demand.

To illustrate the rising adoption of these solutions, ADB (Asian Development Bank) is supporting the People’s Republic of China in granting efficient energy centralized heating in Heilongjiang. The project will expand deployment of district heating systems across 8 cities and install energy-efficient heating sources, insulated pipelines, heat exchangers, and much more.

2.     Increasing integration of CHP-based solutions 

The Combined Heat and Power (CHP) technology integration will observe significant expansion worldwide owing to its high sustainability as they generate heat for the systems. CHP technology can be deployed cost-effectively and quickly with very less geographic limitations. It is used across wide range of industries, institutions, commercial sectors. That apart, it has specifically been providing highly efficient electricity and process heat to some of the very important industries, urban centers, and campuses in the United States.

Mainly, the enhanced energy supply efficiency coupled with the use of low carbon renewable energy sources and waste heat will drive the product demand. The use of biomass in CHP plants is one of the best alternatives for increased bioenergy utilization and production reduction in emissions.

3.     Innovative strategies by key market players

The manufacturers and service providers operating in the district heating market are focusing on various mergers and acquisitions for product expansion. A gist of the potential contributions by solution providers has been offered below:

-       In 2020, Vattenfall Ab and Deutsche Telekom signed an energy supply deal based on solar power for 10 years. The electricity will be derived from a 60 MW solar park which will be developed in 2021 in Western Pomerania, Mecklenburg.

-       In another collaboration, UN Environment has partnered with Korea International Cooperation Agency (KOICA) to facilitate the transfer of clean energy technologies and expansion of markets for the same technologies throughout Central Asian countries.

The above-mentioned deals and collaborations will propel the adoption of district heating systems to curb GHG emissions.

To summarize, rising emphasis on heat distribution using clean and circular means for decreasing GHG emissions is expected to strengthen district heating market share in the near future.

To download a copy of the report, visit www.gminsights.com/industry-analysis/district-heating-market.