Process Instrumentation Market Update: The Energy Transition

Process Instrumentation and the Transition to Lower Carbon Resources

Capstone Partners released its December 2021 Process Instrumentation Market Update, reporting that efforts to reduce the carbon footprint of energy production have been driving a shift in capital investment away from legacy high-pollutant activities like oil production and refining and towards lower carbon resources such as natural gas, including liquified natural gas (LNG), renewable power, and other technologies (hydrogen, carbon capture & storage, etc.). This investment in new infrastructure and distributed power generation in turn requires investment in smart device and automation to monitor and control for optimal efficiency.

The report also discusses the role of process instrumentation in the broader industrial automation movement and the adoption of digital technologies. Process automation can reduce system costs by lowering operational and maintenance costs, improving plant and system efficiency, reducing unplanned outages and downtime, and extending the operational lifetime of assets. Capstone expects financial and strategic buyers to pursue process instrumentation companies leveraging automation technologies, augmenting sector merger and acquisition (M&A) activity.

Also included in this report:

• A breakdown of the three-fold impact that the energy transition has on the Process Instrumentation sector.
• A summary of recent notable transactions in the space.
• Discussion of the sector’s role in the Power markets’ transition to renewables and a carbon free energy future.