2020 Power & Water Industry Outlook

Strong investment opportunities will be keeping capital intensity high in utilities

Electric Power & Water Industry Outlook


As we come ever so closer to the year 2020, there have been nigh countless changes and noteworthy highs and lows for the industries that run the world. Truly, there is nothing permanent in the world but change, especially with the surge of ground-breaking technology and automation, palm-sized smart gadgets that give you a ton of features and capabilities, and app and software with internet access. Once a thing only conceptualized in works of science-fiction, technology in any form is what more than half of the world’s populace are dependent on. This is most expressly true for the power and water industry.

Power Industry Outlook

Fortunately for the individuals working in the power industry, there is general stability on the outlook on Europe Middle East and Asia integrated utilities and the unfettered power and gas sector. This means that the inner workings of the power industry have been smooth sailing and are continuing to operate with little to no obstacles in the way to a more efficient, cleaner 2020.

Water Industry Outlook

Based on research, transmission & distribution, power generation, wastewater and clean water production prices have done nothing but improve. While this is good in and of itself, those at the industry remain cautious about sustainability.

Prices: Power & Water Industry Outlook

The material enhancement in power and water prices ought to benefit power generators and water distributors, primarily the producers of nuclear and hydro energy, which are two highly-priced sources of energy and utilities. Still, despite the efficacy in using them, users must still keep the natural world in mind so as not to infringe upon the notion and trend of sustainability.

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Politics: Power & Water Industry Outlook

Politics are also playing a major game in terms of contravening in industry endeavors. The political environment is always a key engine for the sector, but recent alterations to the political landscape in the countries of the world are exacerbating the risk.

Of course, no trend is every complete with key risks and opportunities which are waiting to be interacted with.

Debt: Power & Water Industry Outlook

First off, as an opportunity, earnings upside could benefit shareholders rather than debt reduction. Since most corporations in the industry have experienced completion, or at the very least, are in the process to achieving 100% completion on their transformation plans, and growth prospects are more evident, the industry believes that newfound and well-deserving management teams will likely be under pressure to increase shareholder remuneration.

Capital: Power & Water Industry Outlook

Second, strong investment opportunities will be keeping capital intensity high all while bringing significant technology, country and execution risk. If the sector sees increased shareholder remuneration as a potential risk, they must also recognize that capital intensity remains particularly high for the sector.

M&A: Power & Water Industry Outlook

Lastly, mergers and acquisitions will continue despite whatever change the world and the landscape may bring. Most of the utility sector’s strategic plans come to an end by Q4 of 2018 or 2019 and establishments have either achieved 100% completion or are about to complete their ambitious transformations. The industry, however, believes that equity market expectations for the main water utilities and electric power players’ upcoming business plans for 2020 and beyond may therefore be too high.

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2020 Power & Water Industry Outlook

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