Shell Expands Energy Portfolio with Acquisition of U.S. Combined-Cycle Power Plant

Shell is poised to strengthen its energy portfolio through the acquisition of a combined-cycle power plant in the U.S., reinforcing its long-term energy supply and capacity in the deregulated Independent System Operator New England (ISO New England) market. The acquisition involves SENA, a company that has held an energy conversion agreement with RISEC since 2019, guaranteeing 100% of the plant’s energy output.

Huibert Vigeveno, Shell's Director of Downstream, Renewables & Energy Solutions, remarked, “Shell has successfully operated in the ISO New England market for over 20 years. This acquisition not only secures our trading position but also enhances our ability to leverage the plant’s performance within our existing trading operations.” This move is strategically timed to take advantage of anticipated market growth, driven by increasing electricity demand linked to decarbonization efforts in sectors such as home heating and transportation.

The financial implications of this acquisition will be managed within Shell’s existing cash capital expenditure framework, which will remain stable. The transaction is subject to regulatory approvals and is expected to finalize in the first quarter of 2025.

This acquisition enables Shell to uphold the energy supply agreement established in 2019, securing a consistent energy source while sustaining SENA’s current operations. The plant, situated near Providence, Rhode Island, has been in operation since 2002, boasting a maximum capacity of 609 MW and an average operational capacity of 594 MW. Utilizing combined-cycle gas turbine technology, the plant enhances efficiency and lowers emissions by generating electricity with gas turbines and capturing waste heat to produce steam for additional power. This technology plays a crucial role in balancing the intermittent nature of renewable energy sources, such as wind and solar.

Shell anticipates that this acquisition will yield an internal rate of return (IRR) significantly above the threshold established for its Power division. RISEC’s parent company is predominantly owned by funds managed by the global investment firm Carlyle, while the remaining interest is held by EGCO RISEC II, LLC, a subsidiary of Thailand’s Electricity Generating Public Company Limited (EGCO). With over 25 years of experience in North American wholesale energy markets, SENA is recognized as a leader in wholesale and retail power, natural gas, and environmental products.

In summary, this acquisition represents a strategic advancement for Shell, further cementing its position in the ISO New England power market and enhancing its capability to meet future energy demands while supporting the transition to a more sustainable energy landscape.