The gas and power sub-sector covers a range of activities, including:
- Generating power, transmitting and distributing it through both conventional and renewable sources.
- Delivering oil and gas to the consumer, through activities such as gas storage, transportation in liquefied form, refining and distribution.
- Developing alternatives to oil and gas, including biofuels.
- All products/components for example, generators and services such as wind turbine maintenance relating to the above activities.
Several factors are driving change in this sector, making it an attractive prospect for investors:
- An increased focus on environmental impact is driving renewable ‘green’ technologies.
- Energy markets, including gas and electricity, are increasingly interconnected.
- In many countries, the energy infrastructure is ageing and key components nearing the end of their economic life.
- Security of supply is an increasing concern. UK North Sea Gas Production for example is now firmly in decline and the UK has become a net importer. Across Europe, the energy industry is continuing to deregulate.
- Developing economies such as China and India are showing strong energy demand.
The operators that succeed in the midstream gas and power sector have models that are focused but sufficiently flexible to respond to changes, such as new legislation. Their models are differentiated compared to those of the major energy developers, generators and suppliers and can grow rapidly as the business expands. In today’s fast-changing market, agile and knowledgeable players, often in particular segments, can quickly build material value.
