Private-equity investor 3i believes an increase in gas-fired power is the only way to prevent a shortfall in generation capacity within the next decade.
The company said yesterday that large investment was required in new generation capacity to meet growing demand across Europe, expected to rise from about 800 gigawatts (GW) to more than 1,000GW in 2030.
It said that, with more than half of Europe’s existing capacity needing replacement over the next two decades, the International Energy Agency estimated that about £500billion would be needed to rebuild, replace and add to the current fleet of power stations over that period.
According to 3i, this need for more power was leading to a new “dash for gas”, similar to that seen in the UK in the 1980s and 1990s, when deregulation, combined with the availability of North Sea gas and technological developments, led to rapid growth of the sector’s capacity.
The company added that it expected gas to account for one-third of EU energy capacity by 2030, up from 20% today.
Mark Kerr, a director of 3i’s Aberdeen-based oil, gas and power team, said: “The reality is that gas is the only option to fill our power requirements in the short term, and will be for the foreseeable future.
“At the moment, competition is increasing for gas supplies throughout the gas generation supply chain, creating opportunities for innovative and ambitious developers as well as supply-chain companies.”