The district heating market is evaluated at US$227.560 billion for the year 2020, growing at a CAGR of 4.34% to reach a market size of US$306.374 billion by the year 2027.
The increasing trend of industrialization and urbanization is one of the factors driving the growth of the district heating market. The rapid growth of urbanization and industrialization is driving the need for more energy sources and district heating systems. As new buildings require heating systems, advanced infrastructure developments, such as smart cities and planned projects, create the considerable potential for district heating solution providers. The wide applications of district heating systems in industries and commercial applications are also boosting the market value of district heating systems in the global market. Government initiatives in support of eco-friendly heating systems that are run by renewable and eco-friendly heat sources are also expected to boost the market growth of district heating systems in the forecasted years. The rising rate of carbon emissions and the increasing trend of global warming are making the major market players in the district heating market switch their energy sources from fossil fuels to renewable sources such as solar power, wind power, geothermal power, etc. District heating is particularly energy-efficient, and its flexibility allows for the replacement of environmentally friendly alternatives, both of which are anticipated to drive district heating's rise. The cost-efficiency showcased by district heating systems is also increasing the applications of district heating systems in households and domestic applications. The flexibility and integration of multiple heat sources in district heating systems are making the system more suitable and viable for all kinds of commercial and domestic applications. These trends showcased are expected to create large opportunities in the field of district heating systems in the future.
The recent outbreak of the COVID-19 pandemic has adversely affected the growth of the global district heating market. The COVID-19 pandemic crisis has severely affected the energy sector all over the globe. The lockdowns and isolations imposed by governments across the world have resulted in the shutdown of energy sectors and production plants all over the world. The unavailability of human resources and workers also adversely affected the proper functioning of certain industries and production plants, thereby declining the demand for district heating systems in the global market. The regulations and interruptions in the supply chain sector of industries and production sectors also affected the export and import rate of components all over the world, resulting in the downfall of district heating in the international market.
The increasing trend of urbanization and industrialization
The rising trend of urbanization and industrialization is one of the major factors that give potential to the growth of the global district heating market. The increasing population and the migration rate are driving the need for the development of infrastructure in residential, industrial, and commercial areas. The developments in industrial sectors and urbanization are also increasing the demand for proper district heating systems in the global market. According to a case study by Oxford University, after 20 years, about 2/3rd of the world population is likely to live in urban and developed regions. The developments in the infrastructure of industries will also increase the usage of energy applications. The rise in disposable income and the living standards of people are also expected to drive the demand for district heating systems during the forecast years.
Government support for eco-friendly heat sources
The support of the government towards eco-friendly heating sources in heating systems is positively influencing the growth of the district heating market. Because of the rising rate of carbon emissions and global warming, the government and international organisations are increasingly relying on eco-friendly and renewable energy sources to meet the needs of consumers. The flexibility showcased by district heating systems in integrating with renewable energy sources is boosting the demand for district heating systems in the global market. Keep Warm, a project funded by the EU's Horizon 2020 program, intends to speed up the upgrading of district heating systems throughout Eastern Europe. Projects like these are providing new opportunities for district heating market players. According to a report by the International Energy Agency, in 2019, Europe invested around 5.8 billion in district heat systems. The initiatives of international organizations in support of the district heat systems market are expected to increase the demand for district heat systems in the future.
Asia-Pacific's market share is increasing.
Geographically, the Asia-Pacific region is showing drastic growth in the market share of the district heating market. Growing urbanization and increasing demand for energy-efficient and cost-effective heating solutions in Asian countries are credited to the region's rapid expansion.
|Market size value in 2020||US$227.560 billion|
|Market size value in 2027||US$306.374 billion|
|Growth Rate||CAGR of 4.34% from 2020 to 2027|
|Forecast Unit (Value)||USD Billion|
|Segments covered||Plant Type, Application, Heat Source, And Geography|
|Regions covered||North America, South America, Europe, Middle East and Africa, Asia Pacific|
|Companies covered||Fortum, Vattenfall AB, Danfoss Group, Engie, NRG Energy, Inc., Statkraft AS, Logstor A/S, Shinryo Corporation, Vital Energi Ltd., Göteborg Energi, Alfa Laval AB, Ramboll Group A/S|
|Customization scope||Free report customization with purchase|
Frequently Asked Questions (FAQs)
Q1. What is the size of the global district heating market?
A1. District Heating Market was valued at US$227.560 billion in the year 2020.
Q2. What will be the district heating market size by 2027?
A2. The district heating market is projected to reach a market size of US$306.374 billion by 2027.
Q3. What are the growth prospects for the district heating market?
A3. The global district heating market is projected to grow at a CAGR of 4.34% over the forecast period.
Q4. What factors are anticipated to drive the district heating market growth?
A4. The rapid growth of urbanization and industrialization is driving the need for more energy sources and district heating systems.
Q5. Which region holds the maximum market share in the district heating market?
A5. Geographically, the Asia-Pacific region is showing drastic growth in the district heating market due to the growing urbanization and increasing demand for energy-efficient and cost-effective heating solutions.
NRG Energy, Inc.
Vital Energi Ltd.
Alfa Laval AB
Ramboll Group A/S
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