Evolving Utility Investment Opportunities

In a CNBC article, Navigant discusses what sectors financial investors should capitalize on in the evolving utility industry

According to a CNBC article, some of today’s financial experts see utility consolidation as an investment opportunity.

In the article, Navigant’s Ted Walker, managing director, explained how the utility industry is evolving and what that will mean for investors.

In the next 5-15 years, centralized energy generation is expected to have a relatively low return. While the past decades have been dominated by regulated utilities and their investments, Walker expects new investment opportunities will become available in the smart grid, cybersecurity, and electric transportation sectors.

An even bigger investment opportunity, he said, is the energy-as-a-service offering, which is based on cloud computing solutions. He explained that private equity (PE) money is chasing that opportunity, creating a threat to the traditional utility model.

PE companies are creating a platform of startup companies to package these services to companies across industries.

“The energy landscape will be massively disrupted over the next decade or two,” Walker said. “I am not in the capital allocation business and if I was, I would be looking hard into these spaces as long-term plays. There are lots of economies of scale and disruption that will happen, and new opportunities to build new platforms transcending the traditional model.”

 
Read the CNBC Article

About the Experts

Back to top