The number of players in the European utilities industry will shrink drastically over the next few years as the industry experiences massive consolidation, according to a report by PricewaterhouseCoopers.

The report, entitled "Power Revolution", predicts that the consolidation currently sweeping the German electricity sector, among others, is simply a foretaste of European and global developments.

Mr Geoff Green, PwC market leader in utilities for Europe, Middle East and Africa, said that when the Irish sector is liberalised early next year, it will start to suffer the same pressures as more liberalised markets in Europe. He said that the opening of the Irish market, if it follows current trends, will lead to consolidation by companies to achieve economies of scale to bring down costs and improve efficiency.

After that, companies will have to look at concentrating their strategies on becoming "best in class" in specific activities in which they can prosper against foreign competitors.