Partners Group, acting on behalf of its clients, has agreed to purchase a portfolio of US natural gas power plants with a combined capacity of 1.9GW for $2.2bn.
The private equity firm will acquire the assets from Avenue Golden Continuation Fund. The acquisition also includes Middle River Power, the firm responsible for operating these facilities.
The acquired portfolio encompasses 11 natural gas power plants located in California, including nine simple-cycle peaking facilities and two combined-cycle gas turbine plants.
Middle River Power has implemented a strategy to develop on-site battery energy storage systems (BESS) at its gas-fired power plants, to create Hybrid Energy Centers. These centres utilise stored energy from excess renewable sources to help manage the carbon footprint of the plants and improve grid reliability. This approach has also enabled the portfolio to secure long-term contracts with utility companies.
The acquisition is poised to capitalise on the increasing need for natural gas-fired plants and battery energy storage systems due to the rising incorporation of renewable energy sources into the energy mix. Partners Group plans to enhance Middle River and the portfolio’s value through the construction of new Hybrid Energy Centers, further development of standalone battery projects, technical and commercial optimisation of assets, and strategic acquisitions that can adopt Middle River’s hybridisation model.
Partners Group Infrastructure Americas co-head Todd Bright said: “We identified the Portfolio and Middle River through our development of a ‘power transition’ thematic, which is focused on making the most out of existing generation assets on the grid to meet growing demand.
“These assets can serve as anchors for redevelopment through the use of surplus interconnection capacity and other infrastructure in the development of new co-located generation and load. The transformation of the Portfolio into Hybrid Energy Centers is emblematic of this power transition thematic. We look forward to working with Mark Kubow, the Middle River management team, and our operating directors.”
The announcement of this acquisition follows Partners Group’s recent decision to offload Greenlink Interconnector to Baltic Cable and Equitix for nearly €1bn.
