The total capacity of industrial distributed generation (IDG) is set to grow by at least 46% between 2011 and 2016, according to a report by Pike Research, but CHP’s market share may fall.

While IDG has been dominated by CHP in recent years, the report cautions that the resource mix is becoming increasingly diverse.

CHP makes up 86% of the total IDG market in 2011, with 9% aggregated generation, 4% opportunity fuels and just 1% renewables.

But CHP’s share could dip as low as 53% by 2016, says Pike.

Pike said that, although incentives have helped some sectors of the market to grow, the poor economy, uncertainties in natural gas prices, and diminished access to capital are all deterrents to IDG growth, particularly for CHP installations.

“Renewable energy, fuel cells, aggregated generation, opportunity fuels, and data centre applications are all showing strong potential to capture increasing shares of the industrial power market,” Pike Research president Clint Wheelock said.

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