The global cogeneration equipment market is forecast to grow at a compound annual growth rate of 9.4 per cent by 2016, new analysis has found.

Growing electricity demand worldwide and increased use of cogeneration technology in the renewable energy sector were cited as reasons for the market growth in a report, The Global Cogeneration Equipment Market 2012-2016, from analysis firm TechNavio. However, the authors warned, fuel price volatility could pose a challenge for future growth.

A previous report from Global Industry Analysts predicted that the global cogeneration equipment market will reach US$15 billion by 2018, citing climbing energy prices, favourable policies and adoption in the renewable energy space. Developed regions such as the US and EU will lead the field, the report said, while growing demand for decentralised energy in developing countries also bodes well for cogeneration.

According to TechNavio, key segment vendors include Alstom Power, Caterpillar Inc, Kawasaki Heavy Industries and Siemens .