District Heating Market: By Energy Sources (Natural Gas-based District Heating, Coal-based District Heating, Oil-based District Heating, Electric-based District Heating, Biomass-based District Heating, Geothermal-based District Heating, Waste Heat-based District Heating, Solar Thermal-based District Heating, Other Renewable-based District Heating), Based on Technology (Combined Heat and Power (CHP) Systems, Biomass-based Systems, Geothermal Systems, Waste Heat Recovery, Systems Solar Thermal Systems, Others) Based on Usage (Residential, Commercial, Industrial), By Based on Models (Decentralized District Heating, Semi-Centralized District Heating, Centralized District Heating) and Geography

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District Heating Market is anticipated to witness significant growth in the forecast period from 2023 to 2029, with a projected increase from USD 155.6 billion in 2023 to USD 210 billion by 2029, at a Compound Annual Growth Rate (CAGR) of 3.3%. The district heating market has been steadily growing over the years due to its advantages in terms of energy efficiency and reduced carbon emissions. However, the market value can vary depending on the region and specific factors affecting each market. District heating, also known as heat networks or communal heating, is a centralized system that provides heating and sometimes cooling to multiple buildings or dwellings from a central heat generation plant. This system typically uses various sources of energy, such as natural gas, biomass, geothermal, waste heat from industrial processes, or combined heat and power (CHP) plants, to produce heat for distribution through a network of insulated pipes to end-users.

District Heating Market Dynamics:

Globally, the market is expected to witness significant growth over the forecast period owing to many marketing driving factors. 

  • Energy Efficiency and Environmental Benefits: District heating systems are considered more energy-efficient than individual heating systems because they can use waste heat from various sources, reducing overall energy consumption and greenhouse gas emissions.
  • Huge support from the Government and their Policies: Many governments have been actively supporting district heating systems as part of their efforts to reduce carbon emissions and transition towards cleaner energy sources. Incentives, subsidies, and favorable regulations have been driving the adoption of district heating.
  • Urbanization and Population Growth: As cities grow and populations increase, the demand for energy and heating rises. District heating systems provide a scalable solution to meet these increasing energy needs in a more sustainable manner.
  • Integration of Renewable Energy Sources: District heating systems can easily integrate renewable energy sources, such as biomass, geothermal, and solar thermal, to supply heat, which aligns with the global trend towards a more sustainable energy mix.
  • Modernization and Infrastructure Upgrades: In many regions, existing district heating systems are being modernized and expanded to improve efficiency, reduce heat losses, and accommodate new sources of heat generation.
  • Resilience and Reliability: District heating networks can offer increased energy resilience, especially when incorporating multiple heat sources, which can ensure a more reliable heat supply during extreme weather events or disruptions in the energy grid.

District Heating Market Summary

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Largest Market


Fastest Growing Market


District Heating Market Segmentation

By Energy Sources
  • Natural Gas-based District Heating
  • Coal-based District Heating
  • Oil-based District Heating
  • Electric-based District Heating
  • Biomass-based District Heating
  • Geothermal-based District Heating
  • Waste Heat-based District Heating
  • Solar Thermal-based District Heating
  • Other Renewable-based District Heating
By Based on Technology
  • Combined Heat and Power (CHP) Systems
  • Biomass-based Systems
  • Geothermal Systems
  • Waste Heat Recovery Systems
  • Solar Thermal Systems
  • Others
By Based on Usage
  • Residential
  • Commercial
  • Industrial
Based on Models
  • Decentralized District Heating
  • Semi-Centralized District Heating
  • Centralized District Heating

Frequently Asked Questions

The district heating market size valued at USD 155.6 in 2023

The district heating market key players are Danfoss Group, Fortum Corporation, Veolia Environnement S.A., NRG Energy, Inc., Engie SA, Vattenfall AB, Ramboll Group A/S

Rapid urbanization and the need for energy-efficient heating solutions are driving district heating market

Key Features of the Reports

  • The district heating market report provides granular level information about the market size, regional market share, historic market (2018-2022), and forecast (2023-2029)
  • The report covers in-detail insights about the competitor’s overview, company share analysis, key market developments, and their key strategies
  • The report outlines drivers, restraints, unmet needs, and trends that are currently affecting the market
  • The report tracks recent innovations, key developments, and start-up details that are actively working in the market
  • The report provides a plethora of information about market entry strategies, regulatory framework, and reimbursement scenario
  • Danfoss Group
  • Fortum Corporation
  • Veolia Environnement S.A.
  • NRG Energy, Inc.
  • Engie SA
  • Vattenfall AB
  • Ramboll Group A/S
  • Ørsted A/S
  • Helen Ltd
  • Statkraft AS
  • ON SE
  • Enwave Energy Corporation
  • Stadtwerke München GmbH
  • RWE AG
  • Wien Energie GmbH
  • KELAG Wärme GmbH
  • STEAG GmbH
  • Dalkia
  • Goteborg Energi AB
  • Hafslund Fjernvarme AS

Adjacent Markets