French oil and gas giant TotalEnergies has entered a $635m deal with Texas-based power company TexGen to acquire three gas-fired power plants with a combined capacity of 1.5GW.
The three power plants are connected to the Electric Reliability Council of Texas (ERCOT), which operates the state’s electrical grid, and supply power to the cities of Dallas and Houston.
The 745MW Wolf Hollow I combined-cycle gas turbine (CCGT) plant in Granbury, on the outskirts of Dallas, began operations in 2003.
The Colorado Bend I plant in Wharton, south of Houston, has a 530MW CCGT and a 74MW open-cycle gas turbine. It generates additional dispatchable energy to meet high demand during summer.
Its 530MW section first began operations in 2007 and the 74MW section began in May 2023.
The 150MW La Porte power plant has four separate gas-fired simple-cycle units and powers the Houston Ship Channel refinery complex.
Their significance was highlighted during weather events that impacted the generation of renewable power in the state.
TotalEnergies intends the three power plants to complement its renewable capacity: 2GW of gross installation, 2GW under construction and a further 3GW in development.
The 1.5GW capacity will strengthen TotalEnergy's trading capabilities in the gas and power markets, and support the company’s goal of providing affordable and sustainable energy for the 26 million ERCOT customers in the state.
The deal awaits clearance from relevant authorities.
TotalEnergies gas renewables and power president Stephane Michel stated: “We are delighted with the agreement signed with TexGen to acquire 1.5GW of CCGT in ERCOT. After the signing of several corporate PPA over the last couple of years and the recent start-up of the utility-scale Myrtle solar plant, this deal is a major milestone for our integrated power strategy in the ERCOT market.
“These plants will enable us to complement our renewable assets, intermittent by nature, provide our customers with firm power, and take advantage of the volatility of electricity prices. This acquisition will contribute positively to our profitability target of 12% ROACE [return on average capital employed] by 2028 for our integrated power business segment.”
