Swiss-based global private equity firm Partners Group has finalised the acquisition of a 1.9GW portfolio of 11 natural gas power plants in the US state of California from the Avenue Golden Continuation Fund, managed by Avenue Capital Group.
The acquisition also includes Avenue Capital Group’s Middle River Power, the company operating the assets.
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The transaction assigns an enterprise value of $2.2bn to the portfolio and Middle River.
The portfolio consists of nine simple-cycle peaking facilities and two combined-cycle gas turbine plants.
Middle River has introduced a strategy to create hybrid energy centres by installing on-site battery energy storage systems (BESS) at its existing gas-fired power plants. The BESS are charged using surplus renewable energy from the grid.
The stored energy can then be discharged during periods of high demand or when renewable generation is low, thus reducing emissions and improving grid stability.
The hybrid energy centres have positioned Middle River and the portfolio to secure long-term contracts with utilities, some extending up to 15 years.
Additionally, Middle River extends its asset management expertise to third-party power plant owners, overseeing 4.8GW capacity outside California.
Partners Group partner, co-head Infrastructure Americas Todd Bright stated: “We identified the portfolio and Middle River through our development of a power transition thematic, which is 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 centres is emblematic of this power transition thematic.”
The acquisition is expected to capitalise on the increasing role of natural gas-fired plants and BESS in maintaining grid reliability amid surging renewable energy sources.
Partners Group plans to expand the construction of new hybrid energy centres, progress standalone battery projects and enhance asset optimisation.
Partners Group infrastructure Americas managing director Patrick Langan stated: “The strategic location of the portfolio allows Middle River to develop customised product solutions for its utility and community customers. Middle River’s hybridisation strategy for the Portfolio cost-effectively enhances grid reliability while also decarbonising the emissions from peaker plants, which count among the hardest emissions to abate.
“The investment provides tangible value creation from the execution of already contracted hybridisations, with further upside from advancing the development pipeline and further growth initiatives.”
Legal and financial advisories for the transaction were Davis Polk & Wardwell for Partners Group, while Avenue Capital Group relied on Guggenheim Securities and Morgan Stanley & Co. for financial guidance and Latham & Watkins for legal counsel.
In mid-March 2025, Partners Group sold the Greenlink Interconnector, a 504MW subsea electricity link between Great Britain and Ireland, to Baltic Cable and Equitix.
