25/09/2017 05:48 AST

A significant number of energy companies and investors from the GCC and the Middle East are witnessing a major transformation in power distribution and supply as utility service providers are gearing up to capitalise on ongoing smart energy revolution.

Most of the companies are either into an acquisition spree of smart energy technology firms, or looking forward to establishing joint ventures (JV) with firms providing smart energy solutions, reveals a latest study by a leading tech company.

According to Mergermarket data, annual global energy M&A deal values doubled to approximately $300bn in 2016 from $150bn in 2012. Deal volumes have also increased by 45 percent from 544 in 2012 to 790 in 2016.

Energy technology bolt-ons has underpinned the future of the global energy industry as companies respond to the seismic shift in energy distribution and supply, consumer demand and to capitalise on the smart energy revolution, research by Pinsent Masons reveals. The study completed by 250 senior level executives at energy and energy investment companies from the EMEA and Asia-Pacific regions showed that 90 percent of energy companies are actively seeking a smart energy technology joint venture or acquisition. The appetite for JVs varies by region: almost half (49 percent ) of energy companies in Asia Pacific are enthusiastic about partnerships, compared with a third (33 percent ) in EMEA.

Pinsent Masons said lucrative opportunities in Europe and Asia could attract Middle Eastern investment with 85 percent of respondents naming Germany, China and the UK the top three destinations for their next smart energy investment. Furthermore, respondents highlighted the Nordics, North America and Western Europe as the regions with the most growth potential for smart energy initiatives.

The findings indicate investors and energy companies are prioritising smart metres, new methods of harnessing surplus power and in-house development of data analytics technology within the next two years, while cloud management systems and virtual power plants will see a surge of investment over the next six years.

While the lack of competitive electricity markets is stifling innovation in the Middle East, Pinsent Masons says Middle East-wide energy market collaboration and reform is crucial to the dismantling of government subsidies to kick start smart energy projects across the GCC sunbelt.

Sachin Kerur, partner and head of Pinsent Masons Middle East, sees opportunities opening up in the region. “Demographic drivers, growing demand for energy and the fiscal challenge of low oil prices will all contribute to a shift in gear for the Middle Eastern energy industry.” “For Middle Eastern investors and energy companies, the message is clear - innovation and dynamism will be the key to unlocking the smart energy revolution in the region. While pursuing greenfield opportunities on the ground is crucial, cash rich investors and acquisitive energy companies have an opportunity to reap the rewards of innovative new technologies across China, Germany and the UK,” he added.

On a global level, 62 percent of energy companies say they will not opt for in-house development of smart energy solutions due to high start-up costs and a lack of expertise but investors favour joint ventures or acquisitions. The survey shows that the biggest investment driver for investors (46 percent ) and energy companies (30 percent ) is access to new technology, offering first-mover advantage, improved profitability, end-customer satisfaction and enhanced brand image.

Energy partner at Pinsent Masons, Ian McCarlie, said: “Joint ventures and acquisitions are the key to this revolution if utilities are to play a role in the future of the energy industry, maintain security of supply and meet consumer demand in a highly competitive market. “What we’re seeing is energy companies stepping up to the plate and embracing the br


The Peninsula

Ticker Price Volume
QNBK 123.29 21,021
SABIC 98.36 2,678,948
PETRORABIGH 13.62 1,724,546
DARALARKAN 6.91 23,025,622
KINGDOM 10.18 49,926
WALAA 28.48 318,680
STC 68.60 268,047
Middle Eastern inbound M&A reaches all-time high of $7.3 billion

19/10/2017

According to estimates from Thomson Reuters, Middle Eastern investment banking fees totalled an estimated $669.2 million during the first nine months of 2017, four per cent less than the value of fee

CPI Financial

KAPSARC tackles challenges of electricity transition in GCC

19/10/2017

The King Abdullah Petroleum Studies and Research Center (KAPSARC) addressed the Climate Change Polices and Challenges of the Electricity Transition in the GCC, during the meeting of Association of En

Saudi Gazette

Arab Petroleum Investments Corp hires banks for dollar sukuk

19/10/2017

Arab Petroleum Investments Corporation (APICORP) has mandated banks to arrange a series of fixed income investor meetings ahead of a potential five-year benchmark U.S. dollar-denominated sukuk sale,

Reuters

Qatar draws on sovereign wealth fund to support struggling economy

19/10/2017

Qatar has been forced to repatriate significant sums from its sovereign wealth fund to shore up its struggling economy, which continues to experience the impact of an economic and political boycott b

The National

Saudi Arabia’s PIF sets up real estate refinance company

19/10/2017

The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, has set up a real estate refinancing company aimed at boosting home ownership in the kingdom, which suffers from a shortage of

The National