The European energy and utility market is proving “particularly resilient” to the economic downturn and is still attracting investors, according to analysis from consultants at EY (Ernst & Young).

In its annual sector survey for investment attractiveness, energy and utilities comes second only to information and communication technologies as a lure for investors and is ahead of the pharmaceutical and biotechnology industries.

The report states that there are two key drivers behind European investment – renewables and nuclear: in particular nuclear in the UK, which has attracted interest from France, China, Japan and Russia.

On renewables, the biggest investment decisions from the likes of RWE, Vattenfall, Dong Energy and EDF are being made in regard to offshore wind projects.

Looking to the future, EY says the European utility sector “has much to gain from further innovation in technology”.

The report quotes Hendrik Bourgeois, vice-president of European Affairs for GE, who said: “The cost of energy is high in Europe, and natural gas is notably more expensive than in the US. We need to use technology to bring down costs. This includes extracting unconventional fuels in an environmentally sound manner.”

He added: “Europe also needs to continue to invest in renewable energies, such as wind, solar and biogas, and to build more interconnected and ‘smarter’ power grids.”