An assessment of trends in the power sector during 2023 reveals an industry adapting to a changing technological scene and investing in renewables.
GlobalData estimates that electricity from solar PV (photovoltaic) and wind in 2023 will be 1,699 terawatt-hours (TWh) and 2,253TWh, respectively. It expects these levels to reach 2,088TWh and 2,476TWh by 2024.
The scaling up of the global renewable portfolio and the challenges presented by a still-developing energy storage industry have shaped the trends of the past 12 months.
Artificial intelligence (AI)
AI will continue to impact the power sector and is already driving progress in renewables forecasting, grid operations and optimisation, the coordination of distributed energy assets and demand-side management.
Francesca Gregory, an energy transition analyst at GlobalData, tells Power Technology: “AI was the most touted technology of 2023, but, beyond the hype, this technology is already delivering tangible benefits to the power sector.”
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Gregory notes that $385m worth of capital was allocated to AI through venture financing deals in the power sector in 2023, with transmission and distribution receiving the bulk of investment.
She adds: “COP28 has sent a clear signal that the fossil fuel era is quickly approaching its end, with the pledge to triple renewable capacity by 2030 also promising to boost the presence of clean sources of energy within energy mixes. However, while this will curb emissions, decarbonisation at this pace and scale will present a significant operational challenge to the power sector.
“Overall, the sector is set to become much more decentralised, with a complex network of renewable energy projects and storage projects catering for an increasing share of demand.”
Mergers and acquisitions (M&A) deals
According to GlobalData, there were 1,434 acquisitions announced in the power sector in 2023, worth a total of $258.64bn. There were also 1,015 asset transactions, worth $193.79bn, and 63 mergers announced, worth $4.55bn.
Most of these deals related to the solar and wind industries, with 689 made in relation to solar and 479 in relation to wind. Other sectors that saw a high number of M&A deals over the year include transmission and distribution, energy storage, fossil fuels, and water and waste management.
However, the most financially significant deal of 2023 was Xylem’s acquisition of Evoqua Water Technologies for approximately $7.5bn (£5.92bn). The deal – made in January – saw Xylem become the largest water technology company globally, with pro forma revenue of $7.3bn and more than 22,000 employees globally.
Geographically, Europe saw the highest number of deals of all regions, with 964 deals worth $176.74bn (€161.24bn). This value represents a significant 32.2% increase from the $133.65bn value of European power deals in 2022, despite an overall decrease in the number of deals.
The US saw the second-highest number and value of deals, reflecting Europe’s trend for having fewer deals but a higher overall value across the year. In 2023, the US saw 674 deals with a total value of $116.29bn, representing a 19.9% increase in value from 791 deals worth $96.97bn in 2022.
GlobalData analytics suggest that the power industry is continuing a trajectory of growth, becoming a significantly bigger hirer: in the third quarter (Q3) of 2023, the industry accounted for 3% of all posted jobs, up from 0.4% in Q3 2022.
However, this was still significantly below several other sectors including oil and gas, which accounted for 6.5% of jobs posted in Q3 2023, as well as technology and communications, which accounted for a significant 17.3% in the same period.
Across the global power sector, the highest number of active roles were in software and web development, programming and testing, suggesting that the industry is increasingly relying on new digital technologies. These roles were followed by computer and information systems managers, line installers and repairers, and database and network administrators and architects.
Towards the end of the year, the biggest recruiters were RWE, EnBW Energie Baden-Wurttemberg and the state of Nebraska in the US.
Industry leaders in power
According to GlobalData, most of the world’s biggest power plant owners were based in the US, which was home to the headquarters of 22 of the top 100 owners, followed by China with 14 and Russia with 7.
Of the top 100 power plant owners identified by GlobalData analysts, China Huaneng Group (CHNG) had the greatest capacity, with 151.19GW in July 2023. It was followed by Electricite de France (EDF) with 118.73 GW and Korea Electric Power with 93.16 GW.
CHNG maintained the top spot in thermal technology, with 110.8GW of thermal capacity across coal, gas and oil. Meanwhile, EDF dominated the nuclear scene, with 67.96GW of generation capacity. NextEra Energy emerged as a surprise leader in solar and wind, despite ranking 12th overall.
NextEra Energy owned the second-highest solar power capacity in July 2023, with 7.84GW, just below SPIC with 7.96GW. It also had the highest capacity of wind power with 21.22GW of onshore wind, above its closest competitor – Iberdrola – with 19.36GW.