The report below gives a good overview of the Fall 2022 M&A activity in the Energy Industry Sector. The global energy market is expected to grow significantly, owing to rapid urbanization and industrialization, and increasing investment in clean energy. The fossil energy market is reaping the benefits of higher fossil fuel prices caused by limited supply and geopolitical insecurities caused by Russia Ukraine war. In September 2022, Russia halted gas supplies via the Nord Stream 1 pipeline which is a vital channel for Russia's massive gas supplies to Europe. Hence, Europe is in the grip of a full-fledged energy crisis, with prices reaching new highs and the EU pledging gas and electricity consumption reductions. Furthermore, France, which generates 70% of its electricity through nuclear power, witnessed a drop in its nuclear power output to 37.6% in August 2022, due to the shutdown of its nuclear reactor for corrosion, maintenance, and technical issues. These developments have led to Europe focusing on building LPG terminals to import energy from the US and increasing efforts of transitioning to renewable energy. The global demand for fossil fuels is expected to peak and start decreasing by 2035, due to increased awareness of the negative impacts of climate change and rapid adoption of renewable energy, as per report published by McKinsey & Company. Additionally, the allocation of $369 billion by the US government in 2022, to develop clean energy and decarbonization projects, would further fuel the growth in the renewable industry.
Posted by Roy Graham.