The gas and power sub-sector covers a range of activities, including:
- Delivering oil and gas to the consumer, through activities such as gas storage, transportation in liquefied form, refining and distribution.
- Generating power and transmitting and distributing it.
- Developing alternatives to oil and gas, including biofuels.
- All products/components (eg generators) and services (eg 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 aging and key components, such as nuclear power stations, are nearing the end of their economic life.
- Security of supply is an increasing concern. The UK, for example is becoming a gas importer for the first time.
- 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 niches, can quickly build material value.