With the global population forecast to rise to 11.2 billion by 2100, sourcing the power needed to meet demand will be one of the key challenges of the 21st century. Where exactly that power will come from – and what equipment, technology and services will be required to meet this soaring demand – are among the most pressing questions for governments.
The recent launch of a $1bn Breakthrough Energy Ventures Fund for new technologies by Bill Gates and other leading global executives was a sign of the increased urgency towards finding workable clean-tech solutions. “We need affordable and reliable energy that doesn’t emit greenhouse gas to power the future, and to get it we need a different model for investing in good ideas…”
The smog that afflicted a huge part of China in early 2017 – some 24 cities issued the highest ‘red alert’ for pollution – was a graphic illustration of the need to drastically reduce coal-fired electricity generation in emerging economies. In fact China has rapidly become a global leader in the development of clean power and low carbon forms of energy.
Despite the huge drive towards renewables, traditional power sources will continue to play a significant part in the global energy mix. Contrary to perception coal is far from dead, with coal power plants still supplying 39% of the world’s power in 2015. Although China is taking action to limit coal imports and close small and inefficient mines, new modernised mines and coal-fired power stations are still being built.
Recent transactions in the power equipment and services sector exemplify the move into energy management and renewable power supplies. There is increasing appetite from both strategic buyers and private equity investors for businesses operating in these areas, while recent deals demonstrate how scaleable companies with exciting international growth prospects can attract high valuations.