POWER Notebook: Duke Energy Sells Renewable Assets in $1.25 Billion Deal

Duke Energy this week said it has a definitive agreement to sell a minority interest in part of its commercial renewable energy portfolio owned and operated by its affiliate, Duke Energy Renewables, to the John Hancock Infrastructure Fund and John Hancock Life Insurance Company. Duke in an April 24 release said the interest is valued at about $1.25 billion.

Duke said the deal includes 49% of 37 operating wind, solar, and battery storage assets, and 33% of 11 operating solar assets across the U.S. John Hancock’s interest will represent about 1.2 GW of power generation capacity after the deal is closed. John Hancock will also have the right to acquire a minority interest in certain additional wind and solar projects in the future, providing a potential source of future growth capital to Duke Energy.

“We look forward to working alongside John Hancock as we continue providing clean and affordable energy to our customers across the country,” said Rob Caldwell, president of Duke Energy Renewables.  “We will continue to develop projects, grow our portfolio and maintain overall operational responsibilities for the projects just as we do today. John Hancock’s investment offers clear validation of the strength of our existing portfolio, and this partnership provides an opportunity for ongoing collaboration and investment as we deliver long-term value to our customers and investors.”

The sale still needs approval from agencies including Federal Energy Regulatory Commission, the Public Utility Commission of Texas, and the Committee on Foreign Investment in the United States. The deal is expected to close in the second half of 2019.

Duke Energy’s deal comes just days after Sempra Energy on April 22 completed the sale of 724 MWof wind generation and battery assets to American Electric Power for $1.05 billion.

Czech Group Buying Two Power Plants in Northern Ireland

Czech-based coal mining and energy group EPH on April 23 said it would buy two power plants in Northern Ireland that are currently owned by U.S.-based AES Corp. The two plants, a gas-fired plant in Ballylumford and a coal-fired plant in Kilroot, have a combined generation capacity of 1.4 GW. Details of the transaction were not disclosed. EPH is owned by Czech billionaire and media mogul Daniel Kretinsky.

EPH is a vertically integrated energy utility that has assets in power generation, natural gas transmission, gas storage, and electricity distribution in several European countries.

AES bought Ballylumford, which began commercial operation in 2003, in 2010 for about $114 million. EPH in a statement said, “The acquisition includes a combined cycle gas turbine, a battery storage facility, open cycle turbines and a coal-fired power station.” The Ballylumford plant is Ireland’s largest with 600 MW of generation capacity. EPH in its statement said, “The transaction is subject to EU merger clearance and is expected to close during the summer of 2019.”

Coal Plant Project in Japan Scaled Back

Electric Power Development Co., commonly known as J-Power, on April 24 said it will scale down a project to build a 1.2-GW coal-fired thermal power plant in Yamaguchi Prefecture in western Japan. J-Power said the project, being developed along with partners Osaka Gas Co.  and Ube Industries Ltd., made the decision in light of concerns about emissions from coal-fired power generation. Osaka Gas is withdrawing from the project, in which it held a 45% stake in the joint company—Yamaguchi-Ube Power Generation Co.—that would run the plant. J-Power also holds a 45% stake, with Ube Industries holding the rest. The plant was scheduled to come online in 2026 in the city of Ube.

Takehiro Honjo, president of Osaka Gas, said the company decided to withdraw after assessing business risks associated with environmental regulations from 2030. Honjo cited concerns about the profitability of the plant. J-Power and Ube Industries are now considering halving the planned output to 600 MW and upgrading the plant’s emissions-reduction equipment. The companies also will pursue a new environmental assessment for the project. The timeline for commercial operation has been moved to the late 2020s.

 POWER staff (@POWERmagazine).