Cooling Towers Market Size, Share & Trends Analysis Report By Type (Open-Circuit, Closed Circuit, Hybrid), By Material, By Application, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global cooling towers market size was valued at USD 3.53 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 4.1% from 2021 to 2028. The growing demand for energy-efficient cooling systems in commercial and industrial applications is anticipated to drive the growth of the market over the forecast period. Cooling towers offer a cost-effective method for cooling large commercial spaces and process cooling applications in various industries and industry verticals, such as oil and gas, chemicals, and food processing. Cooling towers are also deployed on a large scale in thermoelectric power plants to remove the excess heat. Increasing electricity consumption is leading to the construction of new power plants, which is expected to fuel market growth.

The outbreak of the COVID-19 pandemic and the subsequent supply chain disruptions and temporary suspension of production across various industries and industry verticals took a severe toll on the market. Several end-use industries and industry verticals that require cooling towers had to confront declines in the wake of the outbreak of the pandemic. For instance, the production of chemicals plummeted by 3.6%, while the production in the oil and gas industry declined by 6.4% in 2020. The HVAC and the power generation industries also had to confront revenue declines in 2020, thereby affecting the adoption of cooling towers. Nevertheless, the market is poised for a gradual recovery in 2021 as manufacturing units reopen and manufacturing activities resume.

The continued establishment of hyper-scale data centers across different parts of the world is expected to drive the adoption of cooling towers over the forecast period. The adoption of cooling towers is particularly expected to gain traction in the Asia Pacific. Rapid industrialization and the establishment of new data centers are the primary factors driving the demand for cooling towers across the Asia Pacific. The data center capacity in the Asia Pacific stood at 3,042 MW in 2020 and is expected to reach 5,880 MW over the next 3 to 5 years, thereby fueling the market growth.

The increasing importance of cooling in data centers is expected to drive market growth. Adequate cooling is vital for data centers as the IT infrastructure housed in data centers generates excessive heat. Cooling towers can help in maintaining optimum temperature in data centers at lower energy consumption. The data center is a booming market with several upcoming hyper-scale constructions, which bodes well for the cooling tower market growth.

However, the environmental concerns associated with cooling towers are anticipated to moderately hinder the adoption of cooling towers. Cooling towers are often blamed for the plume and drift they produce. Nevertheless, the introduction of drift eliminators and plume abated towers can potentially help in overcoming these concerns. While cooling towers consume large volumes of water, plume abated towers are designed to separate water from the vapor and recirculate it. Ultimately, plume abated towers can help in conserving water while driving down operational costs. As such, the growing preference for plume abated towers bode well for the growth of the market.

Type Insights

The open-circuit segment accounted for the largest market share of over 40% in 2020. Open-circuit cooling towers have more surface area exposed to the atmosphere to facilitate rapid evaporation and help in achieving a more significant cooling effect. These cooling towers offer a high heat rejection capability and are hence ideal for cooling large facilities. However, these cooling towers also have high installation and maintenance costs and associated energy consumption. As a result, the adoption of open-circuit cooling towers is expected to grow steadily over the forecast period.

On the other hand, the hybrid segment is expected to register a CAGR exceeding 5% over the forecast period. Hybrid cooling towers reduce the steam drift and play a vital role in plume abatement. These towers also operate effectively in varied climatic conditions. Hence, the adoption of hybrid cooling towers is expected to gain traction over the forecast period.

Application Insights

The power generation segment accounted for the largest market share of over 20% in 2020. New power plants are being established all over the world to cater to the rising demand for power in line with rapid industrialization. Cooling towers play a vital role in removing the excess heat from power plants, and hence the demand for cooling towers is also expected to gain traction in line with the continued establishment of new power plants. The HVAC segment is anticipated to emerge as the fastest-growing segment over the forecast period owing to the increase in the construction of residential and commercial establishments.

Cooling towers also play a vital role in providing optimal cooling for industrial facilities. As such, incumbents of heavy industries, including chemicals, pulp and paper, cement, and oil and gas, are aggressively adopting cooling towers. However, most of the incumbents of these industries had to confront a dwindling demand in 2020 owing to the outbreak of the COVID-19 pandemic, thereby leading to a negative impact on the market. Although the market is poised for a gradual recovery in 2021, it would be able to attain its pre-pandemic growth levels only over the next three years.

Material Insights

The high-density polyethylene (HDPE) segment is expected to register the highest CAGR of more than 5% over the forecast period. HDPE cooling towers cost less and offer high resistance to corrosion. These towers are lighter in weight and hence easy to transport and install. They are also impervious to chloride attacks and provide better protection against corrosion and leakages.

The fiber-reinforced plastic (FRP) segment accounted for the largest market share in 2020. FRP cooling towers offer various benefits, such as high corrosion resistance and the ability to sustain varying environmental conditions. However, the high costs associated with FRP cooling towers are expected to hamper their adoption. The steel segment also accounted for a substantial market share in 2020. Steel cooling towers are made up of galvanized and stainless steel and hence offer high structural strength. These towers also offer good conductivity and enable effective cooling, and are hence ideal for large facilities.

Regional Insights

The Asia Pacific accounted for the largest revenue share of more than 20% in 2020. Continued industrialization and the increasing number of manufacturing facilities in the Asia Pacific are expected to drive the demand for cooling towers in the regional market. The increasing focus on the construction of nuclear power plants is particularly expected to increase the adoption of cooling towers. Furthermore, the rapid expansion of the IT and telecommunications industry across the Asia Pacific also bodes well for the growing adoption of cooling towers in the region.

The growth of the Europe market for the cooling tower can be attributed to the growing number of industrial facilities being established by the incumbents of various heavy industries and the stringent regulations being drafted by the governments in the region to reduce carbon emissions. On the other hand, the strong presence of oil and gas companies in the Middle East and Africa is anticipated to drive the demand for cooling towers in the region. Furthermore, several industries are setting up distribution centers and production facilities in emerging countries such as Brazil, Mexico, Argentina, and others, to serve the unattended market. This is expected to fuel the growth of cooling towers across Latin America.

Key Companies & Market Share Insights

The market is characterized by strong competition owing to the presence of both established players and relatively smaller vendors offering a range of products. The market can also be described as a moderately fragmented market owing to the presence of key players, such as SPX Corporation; EVAPCO, Inc.; S.A. Hamon; Paharpur Cooling Towers; Babcock & Wilcox Enterprises, Inc.; Enexio; and Baltimore Aircoil Company.

Market players are pursuing various inorganic strategies-, such as mergers and acquisitions and joint ventures, to sustain in the intense competition. Market players are also developing and introducing new products to maintain a competitive edge in the market. For instance, SPX Cooling Technologies, Inc. introduced the Marley BasinGard Filter in February 2020. The filter is designed to capture pipe rust, debris, and mineral scale and help in maintaining the hot water basin flow of the cooling tower. The filter would be available for both existing and new, factory-assembled, crossflow cooling towers. Some of the prominent players operating in the global cooling towers market are:

• SPX Corporation

• Babcock & Wilcox Enterprises, Inc.

• Baltimore Aircoil Company

• EVAPCO, Inc.

• S.A. Hamon

• Engie Refrigeration GmbH

• Paharpur Cooling Towers

Cooling Towers Market Report Scope

Segments Covered in the Report

The report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2018 to 2028. For this study, Grand View Research has segmented the global cooling tower market report based on type, material, application, and region:

• Type Outlook (Revenue, USD Million, 2018 - 2028)

  • Open-circuit

  • Closed-circuit

  • Hybrid

• Material Outlook (Revenue, USD Million, 2018 - 2028)

  • Fiber Reinforced Plastic (FRP)

  • Steel

  • Concrete

  • Wood

  • High-Density Polyethylene (HDPE)

• Application Outlook (Revenue, USD Million, 2018 - 2028)

  • HVAC

  • Power Generation

  • Oil & Gas

  • Industrial

• Regional Outlook (Revenue, USD Million, 2018 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Rest of Europe

  • Asia Pacific

    • China

    • India

    • Japan

    • Rest of Asia Pacific

  • Latin America

    • Brazil

    • Mexico

    • Rest of Latin America

  • Middle East & Africa