District Heating Market Share, Size, Trends, Industry Analysis Report, By Heat Source (Coal, Natural Gas, Renewable, Oil & Petroleum Products, and Others); By Plant Type; By Application; By Region; Segment Forecast, 2024 - 2032
- Published Date:Jan-2024
- Pages: 119
- Format: PDF
- Report ID: PM3146
- Base Year: 2023
- Historical Data: 2019-2022
Report Outlook
The global district heating market was valued at USD 174.04 billion in 2023 and is expected to grow at a CAGR of 5.7% during the forecast period. The increasing utilization of district heating systems to provide heat for monitoring temperature in the industrial, residential, and business areas coupled with the increasing prevalence of district heating systems as an effective technique of distributing heat generated in a centralized location are primary factors driving the growth of the global market.
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Furthermore, the growing implementation on research & development activities and increasing government support to establish district heating systems worldwide are likely to have positive impact on the demand and growth of the district heating market.
For instance, in August 2022, Smurfit Kappa, announced the introduced district heating project, that is likely to benefits around 20,000 homes across 3 different communities. The project will capture the surplus heat generated from the mill to the local homes, schools, & businesses.
The outbreak of the COVID-19 pandemic has significantly impacted the growth of the district heating market. The emergence of deadly coronavirus has resulted in the delay in several infrastructure projects and temporary closure of various industrial and manufacturing enterprises, which led to the overall decline in the demand for district heating systems. Moreover, nearly all construction projects were on hold during the pandemic and many stringent regulation and trade barriers have been imposed by governments around the world, which further hampered the global market.
Industry Dynamics
Growth Drivers
The emerging trend of urbanization across the globe, that results in higher infrastructure development and increased public expenditures and a rise in the urban cities worldwide crate huge demand for sustainable, reliable, and efficient utility services including district heating & electricity production, are prominent factors influencing the global market growth. Renewables and gas to be employed progressively in such systems and serve in achieving the energy goals.
Furthermore, as power generation has shifted far way from the fossil fuels, while considering the various environmental determinants, natural gas has grown gradually in the recent years and accounted for healthy share owing to its numerous benefits of natural gas including cheaper cost, lower carbon emissions, and exceptional efficiency, which has paved the way for market growth exponentially over the coming years.
Report Segmentation
The market is primarily segmented based on heat source, plant type, application, and region.
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By Heat Source |
By Plant Type |
By Application |
By Region |
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Renewable segment is expected to account for considerable growth rate over the forecast period
The renewable segment is expected to hold a considerable market share during the forecast period, as power utilities are constantly upgrading to the clean energy form fossil fuels to boost their power generation facility because of the growing awareness regarding concerns related to environmental safety among folks. Moreover, governments from various countries are imposing and implementing of several regulations towards the emissions and pollution, which will further extend the installation of renewable resources for heat generation and positively impacting the segment market growth.
The coal segment is also expected to witness significant revenue share in the global market over the coming years. Coal is gaining popularity as a cheap heat source which is used to commercial buildings, hot tubs, greenhouses, pools, and homes among others with coal-fired furnaces, which is acting as a major driving factor for the segment market growth.
Combined heat and power segment accounted for the largest market share in 2022
The combined heat and power segment accounted for highest market share in 2022, and is likely to retain its position throughout the projected period on account of the growing re-enforcement of the existing energy emitting plants worldwide & decline prices due to the rise in hydrocarbon production along with the its numerous advantages including low fuel consumption, ease of operation, high product deployment, and increased efficiency. In addition, the growing adoption of the gas powered systems inferable from the low fossil fuel by-products with the developing tendency of clean energy will also propel the segment growth in the coming years.
The boiler segment is projected to account for substantial market share over the study period, which is mainly accelerated by rapidly surging petrochemical and chemical industries and high investment to develop and empower the mega projects especially in developing countries such as India, China, and South Korea. Several environmental legislation and increased availability of these systems in low and medium-sized economies will further boost the demand and growth of the market.
Residential segment dominated the global market in 2022
The residential segment dominated the global market with a healthy market share, which is driven by continuously growing requirements of heating networks at various residential locations for different uses including space heating and water heating along with the rise in the number of construction projects in the residential sector due to rapid urbanization. The adoption of district heating mainly in the singly-family houses is comparatively lower than the apartment owing to the cost-effectiveness and availability of other heating options such as fireplaces and furnaces.
The industrial segment is expected to grow fastest over the anticipated period owing to increasing industrialization and constantly growing investment on the infrastructure development within the industrial sector with the continuing revolution, that will increase the implementation of several heating areas across the globe.
Europe region held the largest market share in 2022
The growth of the regional market is mainly attributed to the growing demand for the energy efficient systems and rise in the number of government regulations for the reduction of greenhouse gas emissions. The rising installation of various renewable sources of energy and the waste heat produced from several plants operating in the region is widely used for heating purpose only because of the extreme weather conditions, thereby fueling the growth of the market in Europe at significant pace.
North America is expected to be the fastest growing region and likely to account for considerable market share over the coming years on account of facing low temperature for a longer period of time in a year, which increases the demand and need for heating water across all industrial, residential, and commercial spaces coupled with the early adoption of advanced technologies in the region.
Competitive Insight
Some of the major players operating in the global market include Danfoss Group, Dall Energy, Helen, Alfa Level, FVB Energy, Vital Energi, Shinryo Corporation, NRG Energy, GE COWI, Fortum Corporation, Engie, Vattenfall, LOGSTOR Denmark Holding, NextGen Heating, Ramboll, Kelvion, and Dall Energy.
Recent Developments
- In March 2022, Liaoning Hongyanhe Nuclear Power, entered into a strategic agreement with country’s largest central heating enterprise, for a district heating project at Hongyanhe plant. The project is being commenced with an aim to provide heating to the Wafangdian City and Dalian City. The total heating areas is 242,200 square meters, that is likely to benefit the heating services of around 20,000 residents.
- In July 2022, Bavaria announced the launch of its new green district heating platform, that supports various municipalities to effectively implement the heat transition. The company is working together with the partners including public utility company Stadtwerke Rosenheim and a geothermal energy project developer named Erdwarme Grunwald, and are currently looking for new possible sites for geothermal energy extraction.
District Heating Market Report Scope
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Report Attributes |
Details |
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Market size value in 2024 |
USD 183.49 billion |
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Revenue forecast in 2032 |
USD 286.87 billion |
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CAGR |
5.7% from 2024 – 2032 |
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Base year |
2023 |
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Historical data |
2019 – 2022 |
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Forecast period |
2024 – 2032 |
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Quantitative units |
Revenue in USD billion and CAGR from 2024 to 2032 |
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Segments covered |
By Heat Source, By Plant Type, By Application, By Region |
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Regional scope |
North America, Europe, Asia Pacific, Latin America; Middle East & Africa |
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Key companies |
Danfoss Group, Dall Energy, Helen, Alfa Level, FVB Energy Inc., Vital Energi, Shinryo Corporation, NRG Energy, GE COWI, Fortum Corporation, Engie SA, Vattenfall AB, LOGSTOR Denmark Holding, NextGen Heating, Ramboll, Kelvion, and Dall Energy. |
FAQ's
Key companies in district heating market are Danfoss Group, Dall Energy, Helen, Alfa Level, FVB Energy, Vital Energi, Shinryo Corporation, NRG Energy, GE COWI, Fortum Corporation, Engie, Vattenfall, LOGSTOR Denmark Holding.
The global district heating market expected to grow at a CAGR of 5.7% during the forecast period.
The district heating market report covering key segments are heat source, plant type, application, and region.
Key driving factors in district heating market are growing implementation on research & development activities.
The global district heating market size is expected to reach USD 286.87 billion by 2032.
