Partners Group, one of the largest firms in the global private markets industry, acting on behalf of its clients, has agreed to acquire a 1.9 GW portfolio of 11 natural gas power plants in California from the Avenue Golden Continuation Fund, L.P., as well as Middle River Power, the company that operates the assets.
The transaction values the portfolio and Middle River at an enterprise value of $2.2 billion.
The portfolio includes nine simple-cycle peaking facilities and two combined-cycle gas turbine plants with a combined capacity of 1.9 GW.
Middle River has developed a strategy under which it develops on-site battery energy storage systems at its existing gas-fired power plants to create Hybrid Energy Centers.
The creation of these Hybrid Energy Centers has enabled the portfolio of plants and Middle River to unlock longer-term contracts of up to 15 years with utilities. Middle River also provides asset management services to third party owners of power plants totaling around 4.8 GW of capacity outside of California.
"The Portfolio is set to benefit from thematic tailwinds such as the growing penetration of intermittent renewable sources in the generation mix, which means natural gas-fired plants and BESS are becoming increasingly critical for ensuring grid reliability," Partners Group said.
Partners Group said it will "leverage its deep experience in building power and renewables platforms to execute a transformational value creation plan for Middle River and the Portfolio."
Key initiatives will include constructing new Hybrid Energy Centers, advancing the pipeline of standalone battery projects, optimizing assets technically and commercially, and strategically acquiring add-on plants where Middle River can replicate its hybridization strategy.
