District Heating Cooling Market to be Driven by Strict Environmental Laws

Posted by mandar on March 16th, 2021

In the last few years, the requirement for district heating and cooling systems has relentlessly expanded at a substantial level across the globe. Several factors such as strict environmental laws concerned with energy efficiency of a variety of systems, government incentives, long-term cost-savings, flexibility of fuel options, and outstanding return on investment (ROI) have contributed towards its growth. 

Few of the most prominent vendors that are operating in the global district heating and cooling market are Emirates National Central Cooling Company PJSC (Tabreed), Emirates District Cooling LLC (Emicool), Tekla Corporation, Emirates Central Cooling Systems Corporation (EMPOWER), and ADC Energy Systems LLC.

Transparency Market Research forecasts that the global direct heating and cooling market will rise at a 5.8% CAGR in terms of sales volumes over the forecast timeframe. Considering revenue, the market is likely to exhibit a 6.2% CAGR over the same timeframe. 

Increased Fuel Efficiency to Bolster Market Demand  

Depending on the condition of load profile and utility grid, district heating cooling systems exhibits outstanding flexibility in terms of usage of different types of energy options. Operators of district heating cooling system can switch between available sources of heat with ease in case of unexpected variations in costs of heat generation in the market. This ensures that the overall operational costs remain in check. It also assists in running the system at comparatively higher capacities by ensuring constant supply of cost-effective options of heat generation. Additionally, incentive schemes and favorable regulatory mechanisms play a major role in quicker penetration of market penetration. It also reinstates investors’ confidence in companies. These factors are anticipated to bolster growth of the district heating and cooling market in the forthcoming years.

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Installation of district-wide heating and cooling systems leads to cost savings and thus it contributes towards the expansion of district heating and cooling market worldwide. Studies revealed that district heating cooling systems contribute towards a substantial drop in the overall staffing and boiler expenditures and at the same time improves performance of boilers as well. Considerable reduction in the overall quantity of fuel required to run these systems due to increased fuel efficiency also make them eco-friendly.  Furthermore, district heating cooling systems scale up quite well due to increase in the number of households, requirement of less space, and for better equipment management.  

Environmental Concerns to Drive Regional Markets

Asia Pacific is currently the leading the district heating and cooling market and it held a market share of almost 55% of the global district heating and cooling market in 2015. Japan, South Korea, and China are some of the main nations that are likely to be propelling the district heating cooling market in the region. Rising temperature levels, government initiatives encouraging the establishment of district heating and district cooling systems across municipalities, and significance of renewable sources of energy and energy efficiency are likely to spearhead growth