Shell PLC has agreed to acquire a 169-megawatt natural gas-fired power plant in Pennsylvania while selling a 609-MW combined-cycle gas power plant in New England.
“These transactions reflect our dynamic approach to managing our trading portfolio. We selectively invest in assets that strengthen our market position and create value, while remaining ready to realise value when market conditions present attractive opportunities,” Shell president for Trading and Supply, Andrew Smith said in an online statement on Thursday.
Shell will acquire Hunlock Creek Generating LLC, which owns the plant in Pennsylvania, one of 13 states in the PJM power market. Hunlock is owned by Riverview Power Holdings LLC, part of Castleton Commodities International LLC.
“The acquisition secures supply and capacity offtake for SENA in the Mid-Atlantic power grid operated by PJM Interconnection, the largest wholesale electricity market and grid operator in the USA”, Shell said, referring to its subsidiary Shell Energy North America (US) LP.
“SENA’s focus is on power markets where it can play to its strengths, including trading and optimization, backed by increased access to battery energy storage systems and flexible power plants”, the British energy giant said.
Hunlock also owns a two-unit, 125-MW combined-cycle power plant and a 44-MW simple-cycle peaking plant, Shell noted. It did not disclose the purchase price.
In the other transaction, Constellation Energy Generation LLC will acquire RISEC Holdings LLC from Shell for $715 million. RISEC owns the Rhode Island State Energy Center, a two-unit combined-cycle gas turbine facility that generates up to 609 MW for the ISO New England wholesale electricity market.
“SENA’s earlier acquisition of RISEC ensured continued access to the plant’s capacity and associated trading opportunities in the market, enabling SENA to deliver substantial value as part of its asset-backed trading portfolio. With this transaction, SENA will bring forward the return it expected to generate from its longer-term ownership through a significant gain on the sale,” Shell explained.
Constellation said separately RISEC will grow its merchant generation portfolio. “As Constellation’s business in New England grows, we need a reliable asset that is well-positioned on both the electric grid and the natural gas pipeline system,” said Constellation chair, president and chief executive, Joe Dominguez.
