Shell Energy North America (US), L.P. (SENA), a subsidiary of Shell plc (Shell), says it has completed 100% equity stake acquisition of RISEC Holdings, LLC (RISEC), which owns a 609-megawatt (MW) two-unit combined-cycle gas turbine power plant in Rhode Island, USA. Shell had earlier announced its ambition for a 100% equity stake.
This acquisition according to Shell has strengthened SENA’s position in the deregulated Independent System Operator New England (ISO New England) power market thereby securing, for Shell, a long-term supply and capacity offtake. Power demand in the coming decades Shell says, is expected to increase in the ISO New England market, largely attributable to growing decarbonization efforts in sectors such as home heating and transportation.
Shell’s statement had added that the acquisition has been absorbed within Shell’s cash capital expenditure guidance, which remains unchanged.
Making further clarifications Shell said that the acquisition allows it to continue an energy supply agreement which has been in place since 2019. It also enables it (Shell) to secure a long-term energy offtake from the plant, thereby maintaining its position in the ISO New England power market. It will also help preserve SENA’s current operations while mitigating market risk by ensuring a reliable and stable power generation source.
The statement further notes that, RISEC’s two-unit combined-cycle gas turbine power plant has a maximum capacity of 609 MW and an average operating capacity of 594 MW. Serving the ISO New England market, the plant is located outside Providence, Rhode Island, and has been in operation since its completion in 2002.
That the plants will generate electricity via gas turbines, and capture waste heat to produce steam, which drives steam turbines for additional power, a process which Shell says will enhance efficiency and reduce emissions, compared to single-cycle power plants. “Such plants provide reliable, flexible power, which balances the intermittency of renewable energy sources like wind and solar,” Shell said.
That the acquisition is projected to generate an internal rate of return well in excess of the hurdle rate set for Shell’s Power business.
That prior to the transaction, the parent company of RISEC was 51% owned by funds managed by global investment firm Carlyle, while the remaining 49% ownership of RISEC, prior to the same transaction, was EGCO RISEC II, LLC, a subsidiary of Electricity Generating Public Company Limited (EGCO), a Thai public limited company.
That SENA is a full-service energy company providing energy solutions across all aspects of the market in North American wholesale energy markets for over 25 years, maintaining market leadership in wholesale and retail power, natural gas and environmental products.