Demand for Inexpensive, On-site Power Generation Energises the CHP
Market
Finds Frost & Sullivan
Environmental concerns add heft to the case for CHP equipment
Singapore, November 7, 2013 - The
escalating costs of the fuels used to generate electricity have spawned
a need for technology that can improve the efficiency of fuel
conversion. This has, in turn set the stage for combined heat and power
(CHP) to emerge as the distributed power generation technology of
choice. CHP not only generates on-site power, but also meets the heating
and cooling requirements of industries and enterprises at reasonable
costs.
New analysis from Frost & Sullivan
Global Combined Heat and Power (CHP) Markets, finds that the
market earned revenues of US$4.26 billion in 2012 and estimates this to
generate US$4.91 billion in 2017. The study covers Europe, North America
and the Asia-Pacific region across the application sectors of
residential, commercial, industrial and institutional.
The efficiency of electricity derived from the grid is only around 30
percent due to heavy losses incurred during transportation. Owing to
this, end users in Europe and Asia are increasingly turning to
distributed generation. Another reason for their preference for
distributed generation is the looming shortage of power generation
capacity and the utilities' inability to meet the growing demand from
various sectors.
"With the phasing out of nuclear power in countries such as Germany and
Japan and the decision to move away from polluting coal plants, power
shortage is a solidifying threat, unless more generation capacity is
added," saidFrost & Sullivan Energy & Environmental Research Analyst
Subha Krishnan. "CHP has the potential to significantly lower the
pressure on utilities with its ability to save energy and costs."
While the high energy costs are nudging end users towards CHP, some end
users are deferring their investments in CHP equipment, such as gas
turbines, until a time when the prices of natural gas are more stable.
Not only are these rising costs of natural gas delaying proposed
projects but are also causing existing projects to shut down.
Facility owners need to be made aware that CHP equipment can save
several projects from premature closure by providing greater flexibility
in allowing them to switch fuels, shift loads, and shave peaks,
depending on the economic conditions.
"The easy availability of fuels will promote the adoption of
cogeneration systems," noted Krishnan. "Most CHP systems are designed
for multiple fuel options and therefore, when the prices of oil and
natural gas increase, customers have the freedom to switch to biomass or
diesel. These benefits can further shield the facility from price
volatility and uncertainty, if it has access to a reliable renewable or
waste energy source."
The CHP market will get added impetus from the rising environmental
consciousness all over the world. The regulators of major countries in
North America, Europe, and Asia-Pacific have implemented strict policies
and a number of regulatory measures, such as carbon credits and
renewable portfolio standards, to protect the environment. This will
give a huge boost to the CHP market, as its efficient fuel conversion
translates to lower greenhouse gas emissions.
Global Combined Heat and Power (CHP) Markets is part of the Energy &
Power Growth Partnership Service program. Frost & Sullivan's related
research services include: Morocco's Infrastructure Sectors, Top 25
Fastest Growing Power Producers in the Turkish Market, Sri Lanka Diesel
Genset Market, and Investment Opportunities in the Turkish Energy
Market. All research services included in subscriptions provide detailed
market opportunities and industry trends evaluated following extensive
interviews with market participants.
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For More Information Contact
Donna Jeremiah
Corporate Communications -- Asia Pacific
P: +61-02-8247-8927
www.energy.frost.com
djeremiah@frost.com
----------------------------------------
Carrie Low
Corporate Communications -- Asia Pacific
P: +603-6204-5910
carrie.low@frost.com
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