Steam & Air Conditioning Supply in France - Market Size, Industry Analysis, Trends and Forecasts (2025-2029)

Steam & Air Conditioning Supply in France industry analysis

The Steam & Air Conditioning Supply industry constitutes an important sub-section of France’s energy sector, accounting for a growing share of overall energy supply in recent years. Natural gas is a key input for heating and cooling networks, leaving companies exposed to fluctuations in natural gas prices. Policy support from the French government has also helped to shape the industry in recent years, with increased emphasis placed on district heating and cooling networks powered by renewables and recovered energies as part of France’s decarbonisation drive.
Revenue is forecast to increase at a compound annual rate of 6.8% over the five years through 2025, reaching €11.2 billion. After declining during the height of the pandemic, a surge in natural gas prices added to operating costs in the second half of 2021. This led to an increase in prices charged by heat network operators, contributing to strong revenue growth during the year. A renewed spike in natural gas prices led to exceptional revenue growth in 2022, as companies of heat networks powered by natural gas sought to protect profitability by raising prices. Revenue has since come down in line with a gradual normalisation in global energy markets, which has moderated natural gas prices. Nonetheless, prices remain above pre-energy crisis levels, ensuring revenue remains elevated. Simultaneously, the focus on integrating renewable sources into heating and cooling networks has accelerated, resulting in sustained expansion in the number of heat networks operating in France. Revenue is set to rise by 5.8% in 2025.
Over the five years through 2030, revenue is slated to expand at a compound annual rate of 2.3%, reaching €12.6 billion. Growth is anticipated to be underpinned by expansion in the number of heating and cooling networks which integrate renewables and recovered energies. This is set to gradually decouple the link between fossil fuel prices and operating costs, supporting more stable returns.

Trends and Insights

• CHP plants, known as cogeneration, play an important role. These power plants produce electricity and useful heat at the same time and produce energy more efficiently.
• Natural gas is the major energy source for heating. There is an energy shift from hard coal and lignite, to renewables like biomass and geothermal heating in some countries.
• Serving a more limited geographical area limits operating scope. The majority of steam and air-conditioning suppliers are country or region specific and the building of district heating systems can require lots of planning and investment, which limits expansion.