The district heating market was valued at USD 170 Bn in 2021 and is expected to grow at a CAGR of 4% to approximately USD 260 Bn by 2032. District energy is a rapidly growing industry around the world, fueled by the aggressive climate goals set by the world’s economies.
Based on preliminary evaluations, some district heating and cooling companies like Vattenfall and Goteborg are identified as operations with extraordinary growth and value potential with a different holding structure. Higher renewable energy levels can be used for thermal purposes by incorporating electrically powered heat pumps into the district heating supply, resulting in integration and balance between energy systems.
With a growing global wind turbine capacity, large heat pumps will play an important role in sustaining global green energy development and the quest to phase out fossil fuels by 2050.
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District heating is a method of delivering thermal energy to buildings (both residential and commercial) in hot water via a network of highly insulated pipelines. The potential for increased use of industrial district heating, on the other hand, is limited. Moreover, converting industrial processes to district heating involves varying heat loads across industries and processes.
The conversion to district heating results in an 11 percent reduction in electricity use, a 40% reduction in the use of fossil fuels, and a total energy end-use savings of 6% among industries.
It is possible to reduce global carbon dioxide emissions by 112,000 tonnes per year by converting industrial processes. However, the residential and commercial markets are expected to account for a sizable portion of the district heating market.
Major companies operating in the district heating market include Fortum, Vattenfall, Goteborg Energi, Statkraft, STEAG, RWE, Shinryo Corporation, Ørsted, NRG Energy, Ramboll Group A/S, Korea District Heating Corporation, Keppel DHCS Pte Ltd., LOGSTOR A/S, Kelag Warme GmbH, and Hafslund.