LONDON--(EON: Enhanced Online News)--Technavio analysts forecast the global fuel cell market for combined heat and power (CHP) applications to grow at a CAGR of close to 25% during the forecast period, according to their latest report.
“Further, by installing fuel cells for CHP at the site, power and heat are generated onsite, therefore, eliminating the T&D losses that occur in a centralized power system. These are also the primary reasons for governments in several countries providing incentives for the adoption of CHP systems”
The research study covers the present scenario and growth prospects of the global fuel cell market for CHP applications for 2016-2020. The report segments the market into residential and non-residential based on application, with the non-residential segment accounting for over 53% of the market in 2015.
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Technavio energy analysts highlight the following three factors that are contributing to the growth of the global fuel cell market for CHP applications:
- Increasing demand for efficient and cleaner technologies
- Rising adoption of fuel cell products
- Growing government incentives for FC-CHPs
Increasing demand for efficient and cleaner technologies
Thermal power plants produce excess heat, and this waste heat is usually released into the atmosphere through cooling towers and other means, which results in lower power generation efficiency. The growing demand for electricity and the consciousness toward using cleaner energy sources are driving the need for CHP, where the waste heat is captured to either produce heat for industries and businesses or to power turbines to generate more electricity.
The rise in GHG emission levels and the need to diversify the energy mix have driven the demand for efficient and clean fuels. Fuel cells are regarded as an emerging power source that offers the potential to produce clean, efficient, and quiet power and heat. Fuel cells are scalable in nature, allowing them to be used in diverse facilities in residential, commercial, and industrial sectors.
“Apart from the economic and environmental benefits provided by using fuel cells as CHP over a larger grid, their adoption also helps in reducing CO₂ emissions. These benefits have resulted in the adoption of fuel cell technologies in applications ranging from small mobile devices to large facilities such as hospitals and residential complexes,” says Thanikachalam Chandrasekaran, a lead analyst at Technavio for energy storage research.
Rising adoption of fuel cell products
Fuel cells are a great way to generate grid-independent power, as they are cleaner, operate silently, and offer higher efficiency than other related technologies. These factors have resulted in their greater application in stationary uses. Some of the different areas where fuel cells are used in stationary applications include prime power, CHP, telecom towers, and in remote monitoring.
The production of electricity in fuel cells is through an electrochemical reaction and does not involve a combustion process to convert fuel into electricity because of which the emissions are not harmful. Thus, fuel cells are being adopted in residential, commercial, and industrial buildings.
“Further, by installing fuel cells for CHP at the site, power and heat are generated onsite, therefore, eliminating the T&D losses that occur in a centralized power system. These are also the primary reasons for governments in several countries providing incentives for the adoption of CHP systems,” says Thanikachalam.
Growing government incentives for FC-CHPs
Various governments worldwide have released targets for fuel cell-CHP (FC-CHP) such as Japan's ENE-FARM program, which aims to achieve 1.4 million residential units by 2020. These objectives, even if not met 100%, would still be resilient enough to provide a boost to the global fuel cell market for CHP applications during the forecast period.
Purchase incentives are amongst the most relevant and effective instruments for promoting fuel cell sales. For instance, in Germany FC-CHP installations receive incentives from the government as the government aims to achieve 25% of electricity generation from CHP by 2020, up from the current level of 15%. South Korea includes an electricity feed-in tariff for CHP users who sell their excess electricity.
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