U.S. Power and Utilities Deals Decline

NEW YORK (Reuters) – The value of U.S. power and utilities deals fell to $27.8 billion, a 36% decrease from 2023, as political uncertainty surrounding the Nov. 5 presidential election impacted transactions, according to a PwC report released on Thursday.

Importance of the Decline

Renewable power deals thrived due to U.S. President Joe Biden's climate and infrastructure legislation, which offers substantial funding for electricity generation sources like wind and solar.

The possibility of an administration under President-elect Donald Trump, who has been critical of climate-related spending, has led to a multi-year low in transactions, a trend anticipated to continue into 2025.

By the Numbers

The number of completed mergers and acquisitions in the power and utilities sector fell to 30 in 2024, down from 52 in 2023. Past years saw the following numbers: 36 in 2022 and 56 in 2021.

The total deal value dropped from $43.3 billion in 2023, $36.3 billion in 2022, and $53.3 billion in 2021.

Interestingly, fossil-fired power generation deals increased in 2024, with natural gas and other fossil fuel power deals representing 19% of total deal value, more than double the previous year.

What's Next

Renewable power transactions are likely to slow under Trump and a Republican-led Congress, while fossil generation deals are expected to rise. Organic investments in renewables such as wind and solar are predicted to remain stable.

Key Quotes

PwC stated, "Most important was the re-election of Donald Trump as U.S. president, which will likely lead to policies favoring traditional energy sources, including a relaxation of environmental regulations and an uptick in investment in fossil fuel infrastructure."

PwC also mentioned, "Despite the changes in the White House, we expect renewables to continue to be a focal point in the industry for organic capital investment, as we do not anticipate wholesale changes to federal support in the sector in the near-term with upcoming demand growth expectations and historical bipartisan support."