The Europe District Cooling Market is expected to grow at a CAGR of 14.71% during the forecast period 2024-2029. The market value was at US$ 2.29 billion in 2023, and the value is expected to reach US$ 5.21 billion by the end of 2029.
A district cooling system provides efficient cooling and reduces the need for other appliances such as pumps, coolers, air conditioners, and similar products. In this respect, it proves to be extremely cost-efficient. On top of this, these cooling systems can run on electricity or natural gas giving them an edge over their counterparts. Increased spending on infrastructure has led to the instalment of cooling systems in these projects. Cooling energy demand in the European region, especially in urban regions is growing significantly owing to factors such as internal heat loads building design, etc.
District cooling systems are still relatively new in the market and have not reached a maturity stage where they can impose a huge market cap. As a result of this, many people still prefer conventional power sources over these products. The market penetration in the European region is comparatively low as compared to the United States and Japan because of the financial crunch and recession. These factors have slowed down market expansion.
District Cooling is still an undiscovered solution that cannot be prepared by any secured diagnosis or estimations of the development in the EU27 nations. It all depends on corporate determination, political determination, and the focus on the market’s interest.
Europe was the initial hotspot of the COVID-19 pandemic at the start of the year. It has negatively affected the demand for district cooling across various end-use industries such as infrastructure, construction, and hotel management. The disruption in the supply chain has resulted in delays or non-arrival of core materials, disrupted financial flows, and reduced morale among production line workers have compelled aircraft and residential workers to operate at reduced or sometimes at zero capacities. A lot of the investments were directed toward the healthcare and pharmaceutical industries as a mission to combat the virus and this led to a sluggish market for the district cooling systems. This has led to a reduction in demand for district cooling. The market is expected to recuperate from 2021 onwards.
The absorption cooling segment accounts for the majority of the market share in the Europe district cooling market. The growth in this segment is expected to remain the same until the forecasted period of 2026. One of the major contributing factors to this growth is the utilization of waste energy.
In the commercial sector, the increase in demand for glass exteriors in airports, hotels, and shopping complexes has increased indoor temperatures and caused a high demand for the District cooling market. In the residential segment, the district cooling industry continues to remain an autonomous solution for a single building. In this way more energy consumption takes place.
Nordic regions have a leading position in the development of district cooling in the European region. Also, 30% of the target market is concentrated in Sweden. This growth, however, is of less importance as very few people live in this region. 65% of the cooling market exists in the top 5 countries in Europe in terms of population, namely Germany, France, the UK, Italy, and Spain. The development processes are shifting towards these countries.
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