In every region, P&U companies are focusing on climate goals. They are growing investments in renewables, improving the efficiency of natural gas-fired generation to ensure the stability and security of the grid, and committing to phasing out coal and, in some regions, decommissioning nuclear. More companies are exploring new technologies, including battery storage, electric vehicle infrastructure and digital grid technologies. We are seeing an industry-wide attitude shift as corporates pursue these investments – P&U executives are beginning to embrace disruption instead of seeing it as the largest barrier to growth.
Potential tailwinds to the utilities M&A market may come from risks to growth from policy missteps, such as trade wars. P&U executives say geopolitical issues are their greatest near-term barrier to growth. More than one-third (39%) of executives cite regulation, policy and political uncertainty as the biggest risk to dealmaking over the next 12 months. This political uncertainty has the potential to derail industry confidence and disrupt market outcomes, unless tightened regulatory controls can be achieved.