Partners Group has agreed to a $2.2bn (€2bn) deal to acquire a portfolio of 11 US natural gas power plants and operator Middle River Power.
The private-markets investor said it has agreed to buy the 1.9GW portfolio in California from the Avenue Golden Continuation Fund as part of the transaction which includes taking over Middle River.
Middle River, the portfolio’s operator, has implemented a strategy involving the integration of onsite battery energy storage systems (BESS) at its gas-fired power plants, creating hybrid energy centres.
The BESS units utilise surplus renewable energy from the grid for charging and storing energy for later discharge. The development of the hybrid energy centres has enabled the singing of longer-term contracts of up to 15 years with utilities.
Middle River also offers asset management services to third-party power plant owners, representing approximately 4.8GW of capacity outside of California.
Todd Bright, partner, co-head infrastructure Americas at Partners Group, said: “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 centres is emblematic of this power transition thematic.”
Patrick Langan, managing director, infrastructure Americas at Partners Group, said: “Middle River’s hybridisation strategy for the portfolio enhances grid reliability in a cost-effective manner while also decarbonising the emissions from peaker plants, which count among the hardest emissions to abate.
“The investment provides tangible value creation from the execution of already contracted hybridisations, with further upside from advancing the development pipeline and further growth initiatives.”
Mark Kubow, CEO of Middle River Power, said: “California is a global leader in driving the clean energy transition, and we expect Middle River to accelerate its contribution towards the state’s reliability, affordability and decarbonisation goals.
“We look forward to our new partnership with Partners Group, which has significant operational experience in building infrastructure platforms, to leverage our existing energy infrastructure to redefine the future of the grid.”
To read the latest IPE Real Assets magazine click here.
