Partners Group Buy 11 US Natural Gas Power Plants

Partners Group, one of the largest firms in the private markets industry with its infrastructure business valued around $27 billion in assets globally, on Tuesday 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 for $2,2 billion.

The Portfolio includes nine simple-cycle peaking facilities and two combined-cycle gas turbine plants. Middle River has pioneered a strategy whereby it develops on-site battery energy storage systems (BESS) at its existing gas-fired power plants to create Hybrid Energy Centres.

The BESS, which are charged by surplus renewable energy from the grid, store energy that can be discharged when needed, reducing the overall carbon footprint of the peakers while enhancing reliability.

The creation of these Hybrid Energy Centers has enabled the Portfolio 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 GWs of capacity outside of California.

Todd Bright, Partner, Co-Head Infrastructure Americas, Partners Group, said that they have identified the Portfolio and Middle River through their development of a power transition thematic, which was focused on making the most out of existing generation assets on the grid to meet growing demand.

“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 Centers is emblematic of this power transition thematic,” he added.

Middle River Power CEO Mark Kubow said that California is a global leader and was driving the clean energy transition, and they expect Middle River to accelerate its contribution towards the state’s reliability, affordability, and decarbonisation goals.

Patrick Langan, Managing Director, Infrastructure Americas, Partners Group, said that the strategic location of the Portfolio allows Middle River to develop customised product solutions for its utility and community customers.

Hybridisation Strategy

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.

Partners Group has investment programs and custom mandates spanning private equity, private credit, infrastructure, real estate, and royalties.

With its heritage in Switzerland and primary presence in the Americas in Colorado, Partners Group is built differently from the rest of the industry. The firm leverages its differentiated culture and its operationally oriented approach to identify attractive investment themes and to transform businesses and assets into market leaders.