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.

Cooling Towers Market Trends

The surging demand for the cooling tower is ascribed to the growing industrial and commercial activities across the globe. Additionally, the emergence of data centers and the increasing construction of hyperscale data centers are anticipated to propel the demand for cooling towers. The IT equipment across data centers requires optimum temperatures to operate effectively. As such cooling towers can be deployed at the data center facilities to carry away the heat generated by the equipment.

The outbreak of COVID-19 has substantially impacted several industrial sectors. Cooling towers primarily find their application among petroleum refineries, thermoelectric powerplants, commercial and industrial HVAC, and heavy industries. All these verticals require on-field presence to carry out production. The on-field activities were stagnated due to restrictions imposed by the governments globally amid the pandemic. This has impacted the overall cooling towers market due to the decreased demand across these verticals. However, as the situation normalizes and the restrictions are lifted, the market is expected to grow gradually and achieve the pre-pandemic level growth over the next three years.

Rapid industrialization, rise in disposable income, and globalization are the key factors leading to a tremendous demand for electricity across the globe, particularly in developing economies. The rise in the number of electric power plants is expected to drive growth in the cooling tower market. The power generation plants generate enormous amounts of heat, leading to the mandatory use of cooling towers. Cooling towers play a vital role in removing the excess heat generated in the power plants and hence contribute to the safer operations of power plants, which is expected to drive the demand for cooling towers over the forecast period.

Cooling towers are a key component in commercial and industrial facilities. The industrial sector is important to the economy, but at the same time consumes the most energy in the country to manufacture products. Among the utmost energy-intensive industries are chemicals, aluminum, forest products, metal casting, mining, petroleum refining, and steel. These industries emit huge amounts of heat during the production process, which needs to be eradicated from the plant in an efficient manner in order to protect the environment. Cooling towers are required to remove that excess heat from the plant.

Technologically advanced cooling towers provide optimal cooling along with providing eco-friendly features. Cooling towers comprise various components including louver, drift eliminator, air-inlet, loads, fans, nozzles, motor, and fills, which have undergone technological advancements to make the towers energy-efficient. Cooling towers lead to water conservation by minimizing the use of water as the same water can be used again for cooling. They minimize the water loss by using efficient evaporative systems that prevent excess water from getting evaporated.

Despite the energy benefits associated with cooling towers, scaling and corrosion remain the major concerns as they increase the energy consumption and hence the maintenance costs of cooling towers. While water treatment remains vital, it is necessary for the cooling tower operator to continuously monitor the water treatment process for any potential problems.

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

Asia Pacific accounted for the highest market share of 30% in terms of revenue in 2021. The cooling tower market is expected to witness tremendous growth across Asia Pacific owing to the high rate of industrialization, leading to an ever-increasing demand for cooling towers for various applications across several countries including China, India, Korea, and Singapore. Furthermore, the continued establishment of new data centers in Asia Pacific is presenting immense opportunities for the growth of the cooling tower market.

China cooling towers market is expected to exhibit high growth on account of the growing manufacturing facilities and infrastructure spending in the country. Additionally, the growing number of data centers across the country is one of the primary factors for the market to stay upbeat over the forecast period. Further, China is the largest consumer of electricity globally. The high amount of power generation required to suffice the increasing energy demands is also expected catapult the overall demand for cooling towers.

North America, led by the U.S. and Canada, accounted for a significant market share of the global immersion cooling market in 2020 owing to the presence of intelligent building, large-scale data centers, and building automation vendors. Furthermore, the rapid growth of structured, as well as unstructured data along with the increasing demand for cloud computing, is anticipated to propel the global data center market growth over the forecast period, subsequently driving the demand for cooling towers.

The U.S. accounted for largest market share the North America cooling towers market in 2021, owing to high energy demand, industrialization, and investments for power generation in the country. Growing investments by oil & gas companies in exploration & production activities in the country are projected to boost the demand for cooling towers in the oil & gas industry.

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

Global Cooling Towers Market Segmentation

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