Cogeneration Equipment Market Size

Global Cogeneration Equipment Market size was valued at USD 28.3 billion in 2023 and is poised to grow from USD 31.02 billion in 2024 to USD 64.58 billion by 2032, growing at a CAGR of 9.6% during the forecast period (2025-2032). 

Cogeneration usually saves energy and is an economic process that increases energy supply security, thus increasing the demand for cogeneration systems. This can be a significant driver for the growth of the global cogeneration equipment market share over the forecast period.

With rising energy prices and markets becoming increasingly volatile, cogeneration equipment is an economic alternative to onsite power generation and thermal energy generation. Cogeneration plants, which generate electricity while conserving waste heat to provide heating or cooling, can assist companies and institutions in reducing their use of grid electricity and lowering overall energy costs, making them more competitive and bottom-line efficient. According to the United States Environmental Protection Agency (EPA), cogeneration plants can have a combined efficiency of 65-90% as opposed to the 35-40% that conventional power generation technology has. This greater efficiency translates into significant cost savings for consumers. Industrial cogeneration systems can save energy costs between 20-40% compared to grid-supplied power and purchased heat, according to a study by the American Council for an Energy-Efficient Economy (ACEEE).

Can Smart CHP Units Improve Energy Efficiency and Reliability?

Cogeneration (CHP) systems are being upgraded to smarter, data-driven systems through the implementation of artificial intelligence (AI) and the Internet of Things (IoT). AI algorithms process the temperature, pressure, and energy output data continuously gathered by IoT sensors to enhance fuel consumption, load balancing, and predictive maintenance. Intelligent systems maximize overall energy efficiency, minimize downtime, and reduce operating expenses. The outcome is a more flexible and robust power infrastructure that can be used for commercial and industrial purposes.

• For example, renowned German CHP manufacturer 2G Energy AG collaborated with UK and French industrial customers in 2024 to install intelligent CHP hardware that feature AI-driven maintenance forecasts and IoT-driven remote diagnosis. These technologies boosted fuel efficiency up to 8% and reduced unplanned outages more than 30%, primarily in factory plants and universities. Towards a fully automated cogeneration networks goal, the company started deploying AI-based demand forecasting technologies around 2025 to assist in grid-balancing in areas where renewable input has been unreliable.