Could private equity re-energise the US power sector?

The US electric power sector will require $800bn of investment by 2020 to keep the lights on. And though it may have its critics, private equity could prove the answer.

What prompts me to write about PE is its current relation to investments in the energy arena. According to one authoritative estimate by Cambridge Energy Research Associates (CERA - which has been so opposed to Peak Oil theory, but which also does quite good work in other areas), the U.S. electric power sector will require about $800 billion of new investment by 2020. By way of comparison, the current net book value of the U.S. power sector is about $700 billion. So right away, the discerning mind can figure out that it will require significant outside investment to keep the lights on in the U.S. over the next 15 years. Much of that new investment will probably come from PE.

Private equity and energy: proposed TXU takeover

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