Cheap Natural Gas Lures Private Equity to Power Industry
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The companies most bullish on U.S. power aren’t from the energy industry. They are private equity firms, and here’s why: natural gas.
Firms from Panda Power Funds to Energy Investors Funds are financing about 10 gigawatts of new gas-fired plants over the next five years in the 13-state mid-Atlantic grid. That’s enough power to run New York City on all but the hottest summer days. Traditional power companies are building less than 4 gigawatts. Part of the electric grid sits atop the Marcellus shale formation in Pennsylvania, which supplies 18 percent of U.S. gas production, up from 1.8 percent in 2007.