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Our views on how changing market dynamics may lead to demand for capital in niche sectors of the economy.

Lighting up the UK economy – Growth and investment opportunities in the UK power sector

2368_viewpoint-lightbulbBritain will not be able to compete in the modern world unless we radically overhaul our energy infrastructure.

After decades of fragmented and reactionary investment into our energy infrastructure, the UK is entering a period of unprecedented expenditure to develop a network capable of supporting a dynamic, modern economy.

The sheer scale of what is required will dwarf that witnessed in previous eras. Ofgem estimates that up to £200bn of investment into generation and transmission may be needed by 2020.

Regulatory pressure is also driving the design of smarter gas and electricity networks for a low carbon future. The industry will have to grapple with balancing the often competing demands of security of supply, decarbonisation and affordability.

The necessity for an evolving energy mix will fuel continued innovation and the adoption of new technologies leading to a profound transformation of the way we produce, use and transport electricity.

If one looks outwards at the global infrastructure landscape, we see a level of spending in the emerging economies that completely eclipses the UK’s significant investment. RBS forecasts that Brazil, India and China’s combined economies will spend in the region of $15 trillion on infrastructure to 2030, with more than half of spending needs expected to be related to electricity.

This industry backdrop creates compelling growth opportunities for specialist product and service providers, not only now but for decades to come

Malcolm Coffin, Inflexion