In 2022 & 2023, market players expected to sail in rough waters; might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain. Further, U.S. economy is expected to grow merely by 3% in 2022. Purchasing power in the country is expected to fell nearly by 2.5%.
On the other hand, European countries to see the worst coming in the form of energy crisis especially in upcoming winters!! Right after COVID-19, inflation has started gripping the economies across the globe. Higher than anticipated inflation, especially in western world had raised concerns for national banks and financial institutions to control the economic loss and safeguard the interest of the businesses. Increased interest rates, strong USD inflated oil prices, looming prices for gas and energy resources due to Ukraine-Russia conflict, China economic slowdown (~4% in 2022) disrupting the production and global supply chain and other factors would impact each industry negatively.
District heating is a system that generates heat at a centralized place and distributes the generated heat to the residential and commercial places through the system of insulated pipes for meeting the requirements such as water and space heating. This provide greater efficiency and better pollution control as compare to any other boilers. Wood pellets are used as an alternative fuel in many companies due to its capability of zero emission of greenhouse gases.
Combined heat and power district heating helps in emitting less carbon molecules in the environment. Advanced technology in district heating networks does not burn fossils on-site therefore emitting negligible CO2 and NO2. It utilizes heat transfer that uses electricity generated from remote fossil fuelled power stations or renewable energy.
The market is observing vibrant growth on account of growing concern for usage of recycling of waste energies and stringent rules and regulations of government for reducing the emission of CO2 in the environment. Rapid urbanization and industrialization is growing the demand for energy in the smaller cities that is anticipated to drive the market growth. Additionally, growing awareness about sustainability is rising the usage of renewable sources for generating energy which in turn is estimated to boost the demand for district heating. Ability to propose less operational cost while providing better environmental conditions and higher efficiency is fueling the growth of the district heating market.
The district heating market is anticipated to record a CAGR of 3.6% over the forecast period i.e. 2019-2027. The market is segmented into heat source such as renewable and non-renewable, out of which, renewable heat source segment is estimated to dominate the market on the back of stringent government rules and regulations for reducing the emission of carbon dioxide or greenhouse gas. Growing ability of renewable resources to not emit hazardous gases and rapid depletion of non-renewable resources is estimated to boost the market growth. Further, the market is segmented into plant type such as boiler plant and CHP, out of which, CHP is anticipated to dominate the market owing to less operational cost and higher capability to emit less greenhouse gases.
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Rising emission of greenhouse gases in the environment is expanding the implementation of stringent government rules and regulations regarding the environment safety which is estimated to support the growth of the market. Lack of availability of non-renewable resources for future use due to rapid depletion is fostering the usage of sustainable sources which in turn is anticipated to support the growth of the district heating market.
Rapid depletion of non-renewable resources or fossil fuels is rising the awareness for using renewable source of energy. Use of sustainable sources for generating energy emit less greenhouse gases and protect environment from hazardous gases is rising the demand for district heating that is estimated to fuel the growth of the district heating market.
The ability to offer low operational costs while providing better pollution control and higher efficiency is allowing the companies to make more use of district heating system for generating heat and energy by combining with CHP that is estimated to support the growth of district heating market during the forecast period.
Requirement of high investment during the initial installation of district heating systems is resisting the small and medium enterprises for using it to generate energy which in turn is anticipated to hamper the growth of the district heating market over the forecast period.
High cost for the equipment used in the transformation process is reducing the adoption of district heating system in large, medium and small enterprises that is expected to hamper the growth of the market.
Our-in depth analysis of the global district heating market includes the following segments:
On the basis of regional analysis, the global district heating market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region.
Europe is anticipated to dominate the market on the back of stringent government rules and regulations related to environment sustainability. Presence of major players of district heating in the region is fueling the growth of the market. North America holds the second position in leading the market due to rising adoption of advanced technology. Less emission of carbon and low operation cost is rising the demand for district heating systems among the players that is estimated to support the growth of the market.
Further, APAC is expected to have the robust growth on the account of rising demand for energy efficient and smart housing. Rapid urbanization and availability of opportunities for industries is anticipated to support the growth of the district heating market over the forecast period.
The global district heating market is further classified on the basis of region as follows: