Global power and utilities deal value hits record $241.8bn in Q3

A new report from EY suggests gas and renewables led the way

Pathway to COP26 report

A surge in gas and renewables deals in the third quarter (Q3) of 2018 saw global power and utilities year-to-date deal value rise to a record $241.8 billion (£187.1bn).

That’s according to the EY Power transactions and trends report for Q3, which shows gas utilities transactions reached an all-time quarterly high in Q3, representing 59% of global deal value at $36.5 billion(£28.25bn), with more than half of those deals conducted in the Americas.

All regions continued to invest in renewables, with 58 deals accounting for 41% of global deal volume. In Europe, renewables represented 78% of deal value, worth $8.1 billion (£6.2bn), underpinning a weaker-than-expected quarter.

Deal value in the Americas saw a 7% quarterly increase to $28.8 billion (£22.3bn), representing around 46% of total global deal value over the period.

Despite European deal value falling by 78% to $10.1 billion (£7.8bn), offshore wind offered investors strong returns, which is expected to be bolstered further by upcoming decisions regarding the future framework of the electricity market.

The report also indicates 57% of global sector executives expect to pursue a deal in the next year, with 86% of global power and utilities executives expecting to see improving growth conditions over the next year.

Miles Huq, EY Global Power & Utilities Transactions Leader, said: “The appetite for dealmaking remains robust among global power and utilities companies, particularly as the sector continues to seek investments in clean energy and emerging technologies.

“But with 39% of respondents to the latest EY Capital Confidence Barometer citing regulatory and geopolitical headwinds as the biggest risk to dealmaking over the next 12 months, ongoing trade tensions, in particular, have the potential to derail market outcomes.”

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