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At present, the traditional fossil energy technology is relatively complete, and related enterprises have achieved economies of scale in production and operation. In contrast, in the various industries related to new energy, the overall technology is still in the development stage, except for a very small number of industries such as photovoltaics, where the cost of use is lower than that of traditional energy, the vast majority of enterprises are still in the capital investment stage, and there is still a long distance from the marginal effect of profits. In the short term, traditional energy companies will invest extremely high costs in new energy business, and new energy companies will lack competitiveness in capital financing due to lack of profit support. In the model of mergers and acquisitions of new energy enterprises by traditional energy enterprises, traditional energy enterprises will carry out business with new energy at a lower cost, which will play a positive role in establishing a good social image for enterprises, and new energy technology will also receive more capital support and achieve scale profits as soon as possible.
China's capital market also shows the driving factors for mergers and acquisitions of energy companies, according to PwC's "Review and Outlook of China's Energy Industry M&A Market in the First Half of 2021" data, the amount of M&A transactions in the domestic power and utilities industry in the first half of 2021 increased by 98% compared with 2020, the amount of transactions in the oil and gas industry rose by only 39%, and there were 240 transactions in the new energy sector, with a transaction amount of 147.8 billion yuan. It brings pioneering inspiration and firm confidence to future mergers and acquisitions.