Shell to Take Over 609-MW Gas Power Plant in Rhode Island

Shell to Take Over 609-MW Gas Power Plant in Rhode Island
'This acquisition secures valuable trading opportunities'.
Image by Thossaphol via iStock

Shell PLC has signed an agreement to acquire RISEC Holdings LLC to secure supply from the latter’s 609-megawatt Rhode Island power plant, which has been supplying Shell for its power trading operations in New England.

“With RISEC signaling an intent to sell, this acquisition allows Shell to continue an energy supply agreement that has been in place since 2019 and secure long-term energy offtake from the plant, maintaining Shell’s position in the ISO New England power market”, the British energy giant said in a statement. “The acquisition preserves SENA’s [Shell Energy North America (U.S.) LP] current operations and mitigates market risk by ensuring a reliable and stable power generation source”.

The two-unit combined-cycle gas turbine plant, located in Johnston, Providence County, has an average operating capacity of 594 MW according to Shell. It started generating electricity 2002. Shell is entitled to 100 percent of RISEC’s output under the 2019 deal.

The acquisition agreement was inked by SENA; funds managed by Carlyle, which own 51 percent of RISEC; and a subsidiary of Thailand’s Electricity Generating Public Co. Ltd. (EGCO), which owns the remaining 49 percent.

The parties expect to complete the transaction in the first quarter of 2025. “The acquisition will be absorbed within Shell’s cash capital expenditure guidance, which remains unchanged”, Shell said in the statement on its website, not disclosing the acquisition price.

“The acquisition is projected to generate an internal rate of return well in excess of the hurdle rate set for Shell’s Power business”, Shell added.

“Shell has had a successful integrated gas and power business in the growing ISO New England market for over 20 years, and this acquisition secures valuable trading opportunities by guaranteeing SENA’s position in the market”, said Huibert Vigeveno, director of downstream, renewables and energy solutions at Shell.

Shell expects power demand in New England to grow in the coming decades “due to growing decarbonization efforts in sectors such as home heating and transportation”, the company said.

EGCO president Jiraporn Sirikum said proceeds from the company’s portion of the sale will support new investments in the United States. EGCO entered the project just last year.

“The decision to sell shareholding in the RISEC power plant is part of EGCO Group’s strategy to continually optimize its asset and portfolio management”, Jiraporn said in a separate statement. “We continue to focus on increasing new power generation capacity in both domestically and internationally, including from both gas-fired and renewable energy projects that are high-value assets in support of the energy transition”.

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