EY's review of Q3 2016 deal activity within the
power and utilities (P&U) sector shows ongoing
stability to be expected into 2017. Highlights from the quarter
include ongoing premiums on prices for regulated assets, increased
investment in renewables and diversification into disruptive
technologies.
Regulated network assets (i.e., transmission and
distribution assets) are described as "safe havens" for
investment, translating into transactions worth US $23.6 billion in
Q3 2016. EY reports that this sum accounted for more than half of
the quarter's overall deal value. Investors view regulated
network assets as stable with long-term returns in a relatively
volatile market.
Renewable energy assets continue to record strong valuation
multiples. Q3 2016 saw 23 deals worth US $2 billion in the
renewables segment, with offshore wind assets in particular
receiving spotlight attention from investors.
