The hottest global power industry trading market 2

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2016 review and 2017 outlook of the global power industry trading market

Abstract: in the just past 2016, whether the power supply is sufficient is the key factor to distinguish the power industry trading markets in various regions. In developed markets, the continuous excess capacity still hinders new green space transactions, while in developing regions, with the passage of time, new opportunities become more obvious. Only after metal devices are implanted into the human body in Africa and the Asia Pacific region, 100million kW of new capacity must be arranged to meet market demand

in 2016, the trading momentum of the power industry in various regions was strong, in which regulated power assets and renewable energy investment dominated: the trading volume of regulated power assets reached US $89.3 billion, accounting for 46% of the total trading value, and the trading volume of renewable energy assets reached US $28.4 billion, accounting for 15% of the total trading value

the attractiveness of electricity assets and renewable energy in developed markets fully reflects the imbalance of the market: overcapacity and low wholesale electricity prices make the project supply in developed countries limited, which is difficult to match the relatively abundant capital supply in the region. Sellers in developed markets have gained a lot from this unprecedented battle for good assets, while emerging markets are just beginning to benefit from the availability of capital

2016 also began to witness major new energy transactions entering the market, and renewable energy technology, once regarded as risky and highly experimental, began to emerge. These technologies have now occupied a place in the investment field and become the main strategy of many investors who want to diversify as soon as possible and join the future value chain

Hot 2016

as the hottest asset in the industry, electric assets continue to receive high premiums in all regions. The most noteworthy M & A cases in 2016 include: US $18.4 billion. Next era energy acquired energy future Holdings Corporation, a Texas power service provider. US $14.4 billion, a consortium led by Macquarie infrastructure and real assets acquired 61% of the shares of national grid gas distribution. With us $12.6 billion, the guide of Aus, an Australian power transmission and distribution (TD) Company acquired by industry funds management Pty Ltd and australiansuper, puts forward that new materials refer to 50.4% of the shares of grid, a newly emerging material with excellent performance or special functions

in 2016, transactions in all sub categories of renewable energy continued to rise. In the Americas alone, there were 46 transactions totaling $8.3 billion

in the Americas, although Latin America is full of vitality, the region with the most transactions is the United States. The United States attracts a large amount of investment from foreign investors, including those from Canada, Europe, Australia and New Zealand, who hope to obtain high returns that are difficult to reach in their home countries. The most popular assets are those supported by high-quality power purchase agreements (PPA), which can provide robust returns, thus allowing a wide range of capital participation

on the other hand, due to the continuous market oversupply, the market of independent power producers is still not optimistic, and they are traded at a discount in all regions. America is 2% off the long-term historical average, Asia Pacific is 17% off the long-term historical average, and Europe is 13% off the long-term historical average. The situation of independent power producers has not significantly improved, and independent power producers are expected to remain depressed in 2017

new energy business is on the mainstream investment agenda. As we predicted about a year and a half ago, investors' preference turned to new energy business in 2016, and then trading activities in this field also increased. Some of the world's major utilities entered new energy technology in 2016: Energy announced that it would acquire 100% of the shares of demand energy, the developer and operator of power storage systems and software in the United States. Kit power solutions, a British start-up invested £ 5million in research on innovative technologies for high-altitude wind power generation. Innogy expanded its power storage capacity through the acquisition of photovoltaic (PV) and energy storage company bellectric solar battery. The national grid of the UK purchased 201000 kW of power storage capacity at US $864million

outlook for 2017

outlook for 2017, various regions will perform differently, but the global power industry trading market as a whole will continue to be active in 2016

first, Europe is still struggling, forcing investors to go overseas. In 2016, most electricity and utility trading activities in Europe were driven by the sale and purchase of regulated electricity assets. Power generation and renewable energy mergers and acquisitions have declined as investors and utilities have to deal with more complex transactions. For example, engie SA, a French utility, acquired opterra energy services, an American company that provides a full range of energy and sustainable development management services, for undisclosed consideration in the first quarter of 2016. Centrica, a British utility, acquired NEAs energy a/s, a Danish energy asset management company, for us $244million, hoping to bring synergy to its existing energy sales and trading business. In 2017, we expect investors to continue to look overseas, especially in the Asia Pacific region, to allocate capital and seek investment and divestment opportunities to enhance competitiveness

second, the United States needs to pay close attention. As the most important country in the power and utility industry in the Americas, the United States will become the focus of investors' attention in 2017. Rising interest rates and Trump's numerous changes in energy policies are likely to affect the investment environment, although the extent of the impact remains to be seen. It is worth noting that the US market is essentially oversupplied and does not need more power generation capacity. The areas most likely to be traded are speculative renewable energy investment, natural gas peak shaving power stations and new energy investment

third, capital will flow into the Asia Pacific region. As the investment situation in Europe and the United States may force investors in these markets to seek opportunities overseas, the Asia Pacific market will become the primary target of investment institutions, utility enterprises and funds with a global perspective

in the past, investors in this region only focused on large but uncomplicated transactions, and more difficult transactions were avoided. However, with the influx of global investors, the opportunities for simple transactions have been exhausted, and more complex transactions may appear in 2017, which requires the trading team to have stronger capabilities in order to harvest full value. The Asia Pacific and Middle East region is about to kick off the stage, with the world's most exciting transactions in 2017

finally, reform has made emerging countries a hot spot for investment. In 2017, we expect investors to remain optimistic about the energy industry in India, Mexico and many countries in Africa and the Middle East. Various international investors are attracted to these emerging hot spots because the local government is trying to carry out reforms to increase the competitiveness of its energy industry and provide a place for the global excess capital. Notable transactions in emerging markets in 2016 include: Tata power renewable energy, an Indian power company, acquired welspun renewable energy, a solar power developer, for $1.4 billion. Infraestructura Energetica nova, a developer of energy infrastructure in Mexico, purchased the ventika wind power project with a cumulative capacity of 252000 kW for us $852 million. U.S. Energy Fund I squared capital acquired Duke Energy Corporation's Latin American business, including power generation, transmission and distribution facilities, for $1.2 billion. Guangdong Yuedian group, a Chinese power enterprise, and YTL Power International Berhad, a Malaysian investment holding company, acquired 45% and 15% of the shares of attarat power company, a Jordanian company that manages 554000 kW power plants, respectively, for us $1.3 billion

in 2017, the energy market reform will continue to create meaningful new opportunities for investors

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