District Heating Market

District Heating Market by Heat Source (Coal, Natural Gas, Renewable, Oil & Petroleum Products), Plant Type (Boiler Plant, CHP), Application (Residential, Commercial, Industrial), and Geography - Global Forecast to 2023

Report Code: SE 6765 Nov, 2018, by marketsandmarkets.com

[113 Pages Report] The overall district heating market was valued at USD 163.76 billion in 2017 and is projected to reach USD 203.00 billion by 2023, at a CAGR of 3.5% from 2018 to 2023.

District Heating Market

By heat source, renewable source to grow at the highest CAGR during the forecast period

The district heating market, by source, has been segmented into coal, natural gas, renewable, oil and petroleum product, and others. The market for renewable sources is expected to grow at the highest CAGR during the forecast period.

By plant type, chip to lead the District Heating market during the forecast period

The district heating market, by plant type, has been segmented into Combined Heat and Power (CHP), boiler, and others. CHP is expected to lead the district heating market during the forecast period.

By application, residential application to dominate the District Heating market during the forecast period

The district heating market, by application, has been segmented into residential, commercial, and industrial. The district heating market for residential applications is expected to grow at the highest CAGR during the forecast period.

APAC to be the fastest growing region of the District Heating Market during the forecast period

The district heating market has been broadly classified into the Americas, Europe, and APAC. The district heating market in APAC is expected to grow at the highest CAGR during the forecast period. This high growth is attributed to the growing urbanization and increasing demand for energy-efficient and cost-effective heating solutions.

District Heating Market

Market Dynamics

Driver: Increasing demand for energy-efficient and cost-effective heating systems

In traditional heating solutions, a specific type of heat source is used, e.g., coal, oil, or natural gas; this implies that the heating bill is fully dependent on the price of a specific fuel. In district heating, heat is produced at central units with several fuel types. With district heating, it becomes possible to take advantage of the price changes on different types of fuels as it uses more heat sources. District heating is extremely flexible when it comes to the choice of the heat source; it can accommodate all heat sources, including wind and solar, surplus heat from industrial, CHP, and boilers. In larger district heating systems, with several heat sources, district heating makes it possible to easily switch from one fuel source to another depending on situations such as price, available heat source, and environmental ambitions.

In district heating, multiple heat sources can be easily used; e.g., natural gas, at one central location, can be used to meet heating requirements in several houses, instead of using individual heating systems. District heating companies may choose the cheapest heat generating source among the available sources. This increases production and supply efficiency; as a result, district heating solution offers cost-effective and efficient heating services to consumers, which, in turn, drives the growth of the said market.

Restraint: High infrastructure cost

District heating system includes heat generation unit consisting of boiler fueled by oil, gas, wood chips, etc.; a distribution network of well-insulated pipes for transferring heat to end users; and other equipment such as heat exchanger and heat meters. Establishment of district heating systems requires a large amount of investments in infrastructure compared with individual heating supply options. The investment is mainly required for setting up heat generation unit and distribution network.

The investment required for heat generation unit varies depending on its type; in case of boilers and renewable heat source, huge investment is required, whereas if heat is sourced from excess heat from industries and data centers, the investment required is comparatively lower. The pipe systems for transmission and distribution of district heating are crucial and require large investment as pipes should be of superior quality to avoid heat wastage. Apart from high investment, district heating solution providers are skeptical of investing due to continuous changing regulation related to the environment, thereby limiting the growth of the district heating market.

Opportunity: Technological advancements and digitalization

Technology advancement and digitalization are expected to create significant opportunities for district heating providers. Digitalization is further fueled by the accelerated pace of adoption of advanced technology products and solutions, such as smart meters, demand-based heating solutions, home automation, smart infrastructure, and many others. Through these solutions, consumers can take an active part in balancing future heating requirements. Rapid technological development quickly drives down the heating costs with increased efficiency.

Advanced infrastructural developments, including smart cities and planed constructions, facilitate significant opportunities for district heating solution providers as new buildings require heating systems. New infrastructures have large heating transfer surfaces and feasibility for installing advanced district heating systems. Moreover, modern district heating networks are expected to play a key role in enabling energy-efficient, environment-friendly, and cost-effective district heating solutions as it procures heat from several sources, mainly from excess heat from industries and different renewable sources based on its availability. Advanced district heating systems can also take advantage of synergies in heating networks to increase efficiency, reliability, and cost efficiency. Hence, technological advancements in the district heating sector are expected to create significant opportunities for solution providers.

Challenge: Need for robust transportation equipment

District heating solution consists of heat generation and distribution as main equipment; the district heating solution providers face challenges in transporting heat from the source to end users with minimum or no loss of heat while transporting. For transporting, heat pipes carrying heat must be properly insulated and robust; if not, it will result in heat loss. Whereas in traditional heating, it does not matter if heat is lost via heating pipes connecting the radiators as it remains within the heating premises. However, losing heat through distribution pipes in district heating incurs a loss of money and heat, which is not economical. Therefore, robust heat exchangers and smart meters are required to reduce or prevent heat loss during heat distribution. Hence, the need for robust equipment for carrying heat poses a challenge for the growth of the district heating market.

District Heating Market

Scope of the Report

Report Metric

Details

Market size available for years

2015–2023

Base year considered

2017

Forecast period

2018–2023

Forecast units

Million/ Billion (USD)

Segments covered

 Heat Source, Plant Type, Application and Geography

Geographies covered

Americas, Europe, and APAC

Companies covered

Fortum (US), Vattenfall (Sweden), Engie (France), Danfoss (Denmark), NRG Energy (US), Statkraft (Norway), Shinryo Corporation (Japan), LOGSTOR (Denmark), Vital Energi (UK), and Kelag (Austria)

This research report categorizes the district heating market by heat source, plant type, application, and region.

On the basis of heat source, the district heating market has been segmented as follows:

  • Coal
  • Natural Gas
  • Renewable
  • Oil & Petroleum Products
  • Others

On the basis of plant type, the district heating market has been segmented as follows:

  • Boiler
  • CHP
  • Others

On the basis of application, the district heating market has been segmented as follows:

  • Residential
  • Commercial
  • Industrial

On the basis of region, the district heating market has been segmented as follows:

  • Americas
  • Europe
  • APAC

Key Market Players:

Fortum (US), Vattenfall (Sweden), ENGIE (France), Danfoss (Denmark), NRG Energy (US), Statkraft (Norway), Shinryo Corporation (Japan), LOGSTOR (Denmark), Vital Energi (UK), Kelag (Austria)

Fortum is one of the leading companies operating in the clean-energy generation segment that offers electricity, heating, and cooling, as well as smart solutions to improve resource efficiency. The company primarily focuses on building cleaner heating sources, improving resource efficiencies, and providing smart solutions. The district heating solutions provided by the company are energy efficient and also emits less CO2 than alternative heating solutions. In October 2017, the company won an award from Global District Energy and Climate Award 2017 for sustainable expansion of district heating and cooling systems.

Moreover, the company adopted partnerships and collaborations as growth strategies to increase its market presence in the global district heating market.

Recent Developments

  • In May 2018, Fortum partnered with Fluxio and Solteq to develop energy-saving techniques. The partnership will help to quickly switch to carbon neutral district heating solution.
  • In March 2018, Vattenfall installed new smart heat meters for district heating system in Berlin. The new smart meters have precise control that helps in optimum utilization of fuel to reduce CO2 emission.
  • In April 2018, Engie partnered with Axium Infrastructure (Canada) to provide district heating services for 6 Harvard-affiliated medical institutions in the US.
  • In June 2018, Danfoss acquires additional shares of Leanheat (Finland) to strengthen its position within building energy optimization and management.
  • In June 2018, Cypress Creek Renewables and NRG Energy partnered to provide renewable energy to commercial and industrial customers in Texas. With this partnership, Cypress Creek will develop and operate 25 megawatts of solar projects.

Key Questions Answered

  • Which are the major heat sources used for providing district heating?
  • What are the strategies followed by district heating providers to stay ahead in the district heating market?
  • In which application district heating is widely used?
  • What are the growth perspectives of this market in different regions?
  • What are the drivers, opportunities, and challenges in the district heating market?

To speak to our analyst for a discussion on the above findings, click Speak to Analyst

Table of Contents

1 Introduction (Page No. - 14)
    1.1 Study Objectives
    1.2 Definition
    1.3 Study Scope
           1.3.1 Years Considered
    1.4 Currency
    1.5 Stakeholders

2 Research Methodology (Page No. - 16)
    2.1 Research Data
           2.1.1 Secondary Data
                    2.1.1.1 Key Data From Secondary Sources
           2.1.2 Primary Data
                    2.1.2.1 Key Data From Primary Sources
                    2.1.2.2 Breakdown of Primaries
    2.2 Market Size Estimation
           2.2.1 Bottom-Up Approach
           2.2.2 Top-Down Approach
           2.2.3 Market Share Estimation
    2.3 Market Breakdown and Data Triangulation
    2.4 Research Assumptions

3 Executive Summary (Page No. - 24)

4 Premium Insights (Page No. - 27)
    4.1 Attractive Opportunities in Overall District Heating Market
    4.2 District Heating Market, By Application
    4.3 District Heating Market, By Application and Country
    4.4 District Heating Market, By Country

5 Market Overview (Page No. - 30)
    5.1 Introduction
    5.2 Market Dynamics
           5.2.1 Drivers
                    5.2.1.1 Increasing Demand for Energy-Efficient and Cost-Effective Heating Systems
                    5.2.1.2 Growing Urbanization and Industrialization
           5.2.2 Restraints
                    5.2.2.1 High Infrastructure Cost
           5.2.3 Opportunities
                    5.2.3.1 Technological Advancements and Digitalization
                    5.2.3.2 Initiatives Related to Clean Energy Production and Stringent Legislative Regulation to Reduce Greenhouse Gas Emission
           5.2.4 Challenges
                    5.2.4.1 Need for Robust Transportation Equipment

6 District Heating Market, By Heat Source (Page No. - 34)
    6.1 Introduction
    6.2 Coal
           6.2.1 APAC is Expected to Dominate the Growth of the Coal Source Used for District Heating
    6.3 Natural Gas
           6.3.1 The Growth of the Natural Gas Source is Driven By Its High Efficiency on Net Calorific Values
    6.4 Renewable
           6.4.1 The Growth of the Renewable Heat Source is Primarily Attributed to Growing Initiatives to Reduce Greenhouse Gas Emission
    6.5 Oil and Petroleum Products
           6.5.1 Europe Hold Largest Share of the Oil and Petroleum Products Source for District Heating
    6.6 Others
           6.6.1 Financial Benefits and Efficient Use of Heat Driving the Growth of Others Hear Source

7 District Heating Market, By Plant Type (Page No. - 40)
    7.1 Introduction
    7.2 Boiler
           7.2.1 Convenient Heating Driving the Growth of the Boiler Plants
    7.3 Combined Heat and Power (CHP)
           7.3.1 The Growth of the CHP Plant is Attributed to Low Capital Investment and Reduced Heat Losses
    7.4 Others
           7.4.1 Efficient Use of Heat Sources Driving the Growth of the Other Plant

8 District Heating Market, By Application (Page No. - 44)
    8.1 Introduction
    8.2 Residential
           8.2.1 The Initiatives Taken By the Government to Reduce Greenhouse Gas Emission Propelling the Growth of the District Heating Market in Residential Applications
    8.3 Commercial
           8.3.1 Higher Adoption Rate of District Heating Solution for Offices and Malls Driving the Growth of the Commercial Application
    8.4 Industrial
           8.4.1 Growing Industrialization Driving the Growth of the District Heating Market in Industrial Application

9 Geographic Analysis (Page No. - 48)
    9.1 Introduction
    9.2 Americas
           9.2.1 US
                    9.2.1.1 Growing Modern Construction in Residential and Commercial Buildings Driving the Growth of the Market in the US
           9.2.2 Canada
                    9.2.2.1 Government Initiatives to Reduce Greenhouse Gas Emission Propelling the Growth of the Market in Canada
           9.2.3 South America
                    9.2.3.1 Growing Public–Private Partnerships to Set Out Policies and Investment Required for District Heating Driving the Growth of the Market in South America
    9.3 Europe
           9.3.1 Russia
                    9.3.1.1 Residential Application Expected to Dominate the Growth of the Market in Russia
           9.3.2 Germany
                    9.3.2.1 The Growth of the Market in Germany is Attributed to the Legislative Framework of the Country to Reduce the Greenhouse Gas Emission
           9.3.3 UK
                    9.3.3.1 Government Initiatives are Likely to Drive the Growth of the Market in the UK
           9.3.4 France
                    9.3.4.1 Rising Residential Building Permits and Low Housing Loan Interest Rate Propelling the Growth of the Residential Application in France
           9.3.5 Sweden
                    9.3.5.1 Renewable Heat Source Hold the Largest Share of District Heating Market in the Country
           9.3.6 Denmark
                    9.3.6.1 CHP Plant Hold Largest Share of the District Heating Market in Denmark
           9.3.7 Other Scandinavian Countries
                    9.3.7.1 Residential Application Hold Largest Share of the District Heating Market in the Region
           9.3.8 Rest of Europe
                    9.3.8.1 Renewable Heat Source is Expected to Dominate the Growth of the District Heating Market in the Region
    9.4 APAC
           9.4.1 China
                    9.4.1.1 Rapid Growing Urbanization in the Country is Propelling the Growth of the District Heating Market
           9.4.2 Japan
                    9.4.2.1 Government Initiatives are Expected to Drive the District Heating Market in Japan
           9.4.3 South Korea
                    9.4.3.1 Continuous Increase in the Number of Households Connected to District Heating Drives the Market in the Country

10 Competitive Landscape (Page No. - 77)
     10.1 Introduction
     10.2 Ranking Analysis of Players in District Heating Market
     10.3 Competitive Situations and Trends
             10.3.1 Product Launches
             10.3.2 Agreements, Partnerships, Contracts, and Collaborations
             10.3.3 Expansions

11 Company Profiles (Page No. - 81)
(Business Overview, Products/Services Offered, Recent Developments, SWOT Analysis, and MnM View)*
     11.1 Key Players
             11.1.1 Fortum
             11.1.2 Vattenfall
             11.1.3 Engie
             11.1.4 Danfoss
             11.1.5 NRG Energy
             11.1.6 Statkraft
             11.1.7 Shinryo Corporation
             11.1.8 Logstor
             11.1.9 Vital Energi
             11.1.10 Kelag
     11.2 Other Key Players
             11.2.1 Goteborg Energi
             11.2.2 FVB Energy
             11.2.3 Alfa Laval
             11.2.4 Ramboll Group
             11.2.5 Savon Voima
             11.2.6 Enwave Energy
             11.2.7 Orsted
             11.2.8 Helen
             11.2.9 Keppel Dhcs
             11.2.10 Steag New Energies

*Details on Business Overview, Products/Services Offered, Recent Developments, SWOT Analysis, and MnM View might not be captured in case of unlisted companies.

12 Appendix (Page No. - 107)
     12.1 Insights From Industry Experts
     12.2 Discussion Guide
     12.3 Knowledge Store: Marketsandmarkets’ Subscription Portal
     12.4 Available Customization
     12.5 Related Reports
     12.6 Author Details


List of Tables (69 Tables)

Table 1 District Heating Market, By Heat Source, 2015–2023 (USD Billion)
Table 2 District Heating Market for Coal, By Region, 2015–2023 (USD Billion)
Table 3 District Heating Market for Natural Gas, By Region, 2015–2023 (USD Billion)
Table 4 District Heating Market for Renewables, By Region, 2015–2023 (USD Billion)
Table 5 District Heating Market for Oil and Petroleum Products, By Region, 2015–2023 (USD Billion)
Table 6 District Heating Market for Other Sources, By Region, 2015–2023 (USD Billion)
Table 7 District Heating Market, By Plant Type, 2015–2023 (USD Billion)
Table 8 District Heating Market for Boiler Plant, By Region, 2015–2023 (USD Billion)
Table 9 District Heating Market for CHP Plant, By Region, 2015–2023 (USD Billion)
Table 10 District Heating Market for Other Plants, By Region, 2015–2023 (USD Billion)
Table 11 District Heating Market, By Application, 2015–2023 (USD Billion)
Table 12 District Heating Market for Residential, By Region, 2015–2023 (USD Billion)
Table 13 District Heating Market for Commercial, By Region, 2015–2023 (USD Billion)
Table 14 District Heating Market for Industrial, By Region, 2015–2023 (USD Billion)
Table 15 District Heating Market, By Region, 2015–2023 (USD Billion)
Table 16 District Heating Market in Americas, By Country, 2015–2023 (USD Billion)
Table 17 District Heating Market in Americas, By Application, 2015–2023 (USD Billion)
Table 18 District Heating Market in Americas, By Source, 2015–2023 (USD Billion)
Table 19 District Heating Market in Americas, By Plant Type, 2015–2023 (USD Billion)
Table 20 District Heating Market in US, By Application, 2015–2023 (USD Billion)
Table 21 District Heating Market in US, By Source, 2015–2023 (USD Billion)
Table 22 District Heating Market in US, By Plant Type, 2015–2023 (USD Billion)
Table 23 District Heating Market in Canada, By Application, 2015–2023 (USD Billion)
Table 24 District Heating Market in Canada, By Source, 2015–2023 (USD Billion)
Table 25 District Heating Market in Canada, By Plant Type, 2015–2023 (USD Billion)
Table 26 District Heating Market in South America, By Application, 2015–2023 (USD Billion)
Table 27 District Heating Market in Europe, By Country, 2015–2023 (USD Billion)
Table 28 District Heating Market in Europe, By Application, 2015–2023 (USD Billion)
Table 29 District Heating Market in Europe, By Source, 2015–2023 (USD Billion)
Table 30 District Heating Market in Europe, By Plant Type, 2015–2023 (USD Billion)
Table 31 District Heating Market in Russia, By Application, 2015–2023 (USD Billion)
Table 32 District Heating Market in Russia, By Source, 2015–2023 (USD Billion)
Table 33 District Heating Market in Russia, By Plant Type, 2015–2023 (USD Billion)
Table 34 District Heating Market in Germany, By Application, 2015–2023 (USD Billion)
Table 35 District Heating Market in Germany, By Source, 2015–2023 (USD Billion)
Table 36 District Heating Market in Germany, By Plant Type, 2015–2023 (USD Billion)
Table 37 District Heating Market in UK, By Application, 2015–2023 (USD Billion)
Table 38 District Heating Market in UK, By Plant Type, 2015–2023 (USD Billion)
Table 39 District Heating Market in France, By Application, 2015–2023 (USD Billion)
Table 40 District Heating Market in France, By Source, 2015–2023 (USD Billion)
Table 41 District Heating Market in France, By Plant Type, 2015–2023 (USD Billion)
Table 42 District Heating Market in Sweden, By Application, 2015–2023 (USD Billion)
Table 43 District Heating Market in Sweden, By Source, 2015–2023 (USD Billion)
Table 44 District Heating Market in Sweden, By Plant Type, 2015–2023 (USD Billion)
Table 45 District Heating Market in Denmark, By Application, 2015–2023 (USD Billion)
Table 46 District Heating Market in Denmark, By Source, 2015–2023 (USD Billion)
Table 47 District Heating Market in Denmark, By Plant Type, 2015–2023 (USD Billion)
Table 48 District Heating Market in Other Scandinavian Countries, By Application, 2015–2023 (USD Billion)
Table 49 District Heating Market in Other Scandinavian Countries, By Source, 2015–2023 (USD Billion)
Table 50 District Heating Market in Other Scandinavian Countries, By Plant Type, 2015–2023 (USD Billion)
Table 51 District Heating Market in Rest of Europe, By Application, 2015–2023 (USD Billion)
Table 52 District Heating Market in Rest of Europe, By Source, 2015–2023 (USD Billion)
Table 53 District Heating Market in Rest of Europe, By Plant Type, 2015–2023 (USD Billion)
Table 54 District Heating Market in APAC, By Country, 2015–2023 (USD Billion)
Table 55 District Heating Market in APAC, By Application, 2015–2023 (USD Billion)
Table 56 District Heating Market in APAC, By Source, 2015–2023 (USD Billion)
Table 57 District Heating Market in APAC, By Plant Type, 2015–2023 (USD Billion)
Table 58 District Heating Market in China, By Application, 2015–2023 (USD Billion)
Table 59 District Heating Market in China, By Source, 2015–2023 (USD Billion)
Table 60 District Heating Market in China, By Plant Type, 2015–2023 (USD Billion)
Table 61 District Heating Market in Japan, By Application, 2015–2023 (USD Billion)
Table 62 District Heating Market in Japan, By Source, 2015–2023 (USD Billion)
Table 63 District Heating Market in Japan, By Plant Type, 2015–2023 (USD Billion)
Table 64 District Heating Market in South Korea, By Application, 2015–2023 (USD Billion)
Table 65 District Heating Market in South Korea, By Source, 2015–2023 (USD Billion)
Table 66 District Heating Market in South Korea, By Plant Type, 2015–2023 (USD Billion)
Table 67 Product Launches
Table 68 Agreements, Partnerships, Contracts, and Collaborations
Table 69 Expansions


List of Figures (29 Figures)

Figure 1 District Heating Market Segmentation
Figure 2 District Heating Market: Research Design
Figure 3 Research Flow of Market Size Estimation
Figure 4 Market Size Estimation Methodology: Bottom-Up Approach
Figure 5 Market Size Estimation Methodology: Top-Down Approach
Figure 6 Data Triangulation
Figure 7 Assumptions of the Research Study
Figure 8 Residential Application to Dominate District Heating Market During Forecast Period
Figure 9 Renewable Source to Grow at Highest CAGR During Forecast Period
Figure 10 CHP to Lead District Heating Market During Forecast Period
Figure 11 APAC to Be Fastest-Growing Region for District Heating Market During Forecast Period
Figure 12 Increasing Demand for Energy-Efficient and Cost-Effective Systems and Growing Urbanization Driving District Heating Market
Figure 13 Residential Application to Dominate District Heating Market During Forecast Period
Figure 14 Residential Application to Hold Largest Share of District Heating Market in APAC By 2023
Figure 15 China to Witness Highest Growth in District Heating Market By 2023
Figure 16 District Heating Market: Drivers, Restraints, Opportunities, and Challenges
Figure 17 China to Dominate Growth of District Heating Market During Forecast Period
Figure 18 Americas: Snapshot of District Heating Market
Figure 19 Europe: Snapshot of District Heating Market
Figure 20 APAC: Snapshot of District Heating Market
Figure 21 Ranking of Key Players in District Heating Market (2017)
Figure 22 Agreements/Contracts/Collaborations/Partnerships Was the Key Strategy Adopted By Major Players From 2015 to 2018
Figure 23 Fortum: Company Snapshot
Figure 24 Vattenfall: Company Snapshot
Figure 25 Engie: Company Snapshot
Figure 26 Danfoss: Company Snapshot
Figure 27 NRG Energy: Company Snapshot
Figure 28 Statkraft: Company Snapshot
Figure 29 Shinryo : Company Snapshot


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