The global market for district cooling has gained a significant momentum in the recent past. The rising urbanization across the world, especially in Asia Pacific and the Middle East and Africa, has influenced the real estate sector, global, which consequently, is impacting the demand for district cooling to a great extent.
The growing population in emerging Asian economies, such as China and India, leading to an increased consumption of building energy for heating and cooling needs, and the construction of high-rise buildings in Europe, North America, and the Middle East and Africa, which tends to decrease natural ventilation, thereby increasing the obstruction of buildings on each other, are likely to bring an upswing in the need for the mechanical means of air conditioning and, therefore, energy consumption.
The rising primary energy consumption, peak electricity demand, and greenhouse gas emissions, are projected to increase the requirement of district cooling services as a sustainable energy solution, enabling local communities to gain the economic and environmental benefits of this technology over the next few years. Expanding at a CAGR of 5.10% between 2016 and 2024, the global market for district cooling is estimated to increase from US$11.1 bn in 2015 to US$17.3 bn by the end of 2024.
Commercial Sector to Surface as Leading Application Area for District Cooling
On the basis of application, the global district cooling market is segmented into the residential, commercial, and the industrial sectors. The commercial sector has surfaced as the dominant application of district cooling across the world. In 2015, it led the overall market with a share of more than 50% and is anticipated to remain doing so over the next few years, thanks to the significant expansion in the commercial sector, worldwide. The growing emphasis on energy saving, together with the rising demands for BREEAM and LEED-certified buildings are likely to fuel the demand for district cooling in this sector in the near future.
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Hotels, restaurants, malls, shops, hospitals, data centers, laboratories, and various other commercial facilities are the key application areas for district cooling in the commercial sector. The industrial sector, on the other hand, includes power generation plants, manufacturing plants, chemical plants, and several other industrial facilities. Individual houses, buildings, and connections of individual flats in buildings come under the residential sector.
North America to Lose Ground to Middle East and Africa
The Middle East and Africa, North America, Latin America, Asia Pacific and Europe are the key regional markets for district cooling across the world. North America led the global market in 2015 with a share of nearly 48%. Although the rising temperature levels, increased incentives for the adoption of renewables, and the efficient usage of energy resources are expected to boost the adoption of district cooling technology in this region, the North America market for district cooling is likely to lose ground to the market in the Middle East and Africa in the years to come, thanks to its massive potential for DC development due to its hot climatic conditions.
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