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What’s Next For The UK CHP Market?

Date: 10 February 2016

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8 pages

EXECUTIVE SUMMARY

The combined heat and power (CHP) market is mature in the UK – with over 2,000 schemes in operation according to Department of Energy & Climate Change (DECC) data. This report provides an overview of the projected evolution of the UK CHP market in the next three years for multiple market participants, including CHP specialists, energy service providers, power utilities and facilities management firms. Our analysis finds that while the pace of installations has slowed in recent years, there will continue to be strong growth across small to mid-sized CHPs in sectors such as hotels, hospitals and universities due to favourable economics. Market players should expect competition to intensify in the 1-2 MWe CHP segment, as suppliers hone in on the fast growing parts of the market and new entrants establish offerings. In response, CHP suppliers should focus on advertising competitive differentiators and continue to review technology innovations that could add value for customers.

TABLE OF CONTENTS

What’s Next For The UK CHP Market?
Market Growth Has Been Supported By Positive Spark Spreads And Regulation
Long Payback Periods And Poor Reputation Are Slowing Down Uptake Across Some Customer Segments
The Most Attractive Segments For CHP Will Be Hospitals, Leisure and Hotels

Increasing Levels Of Competition In The CHP Market Will Put Pressure On Established Players
CHP Suppliers Must Focus On Differentiation In The Bid Processes

TABLE OF FIGURES

Figure 1. Drivers For The UK CHP Market
Figure 2. Number Of CHP Schemes By Size 2009-2014

ORGANIZATIONS MENTIONED

2G Energy, AB Energy, Ameresco, American DG Energy, Association for Decentralised Energy, Baxi, Bloom Energy, Bosch, British Gas, Centrica, Ceres Power, Cofely, Cogenco, Department of Energy & Climate Change (DECC), E.ON, EDF, ENER-G, ENGIE, Eurosite Power, Gloucestershire Hospitals, Hoval, International Energy Agency, Liverpool University, Marriot Group, National Grid, npower, Orcan Energy, Queen’s Medical Centre, SSE, St Bartholomew’s Hospital, University of Birmingham, University Of East Anglia, University Of Edinburgh, Veolia, Vital Energi, York Teaching Hospital