The appetite for mergers and acquisitions (M&A) in the power and utilities sector is up 12% to a seven-year high.

A new survey from EY shows 59% of executives in the sector expect to actively pursue an acquisition in the next year.

Around 89% of respondents expect their deal pipeline to increase or remain stable in the next 12 months, suggesting the momentum that characterised the beginning of the year is set to continue, with deal values expected to reach $45.5 billion (£35.4bn).

Transmission, distribution and renewable energy assets attracted a combined $35.6 billion (£27.7bn) in investment in Q1, 78% of total deal flow.

Traditional power and utility players are facing increased competition for market share from outside the sector.

Around 80% of the quarter’s total M&A value originated in the Americas at $21 billion (£16.3bn) and the Asia-Pacific region at $15.1 billion (£11.7bn) – this is likely to continue as executives identified the US, Brazil and Canada within their top five targets for the next year.

Matt Rennie, EY Global Power & Utilities Transactions Leader, said: “The global power and utilities transaction environment in the first quarter of the year saw the trends established in 2016 endure.

“In developed countries, investors continued to seek assets that guaranteed secure returns, while in developing countries, the need for electrification and greenfield infrastructure drove investment.”

The EU has cleared the acquisition of a Danish wind firm by a US turbine manufacturer.