Three Texas Gas-Fired Plants Sold in $635 Million Deal
A France-based energy group said it has an agreement to buy three natural gas-fired power plants in Texas. The facilities, one near Dallas and two south of Houston, represent about 1.5 GW of generation capacity.
TotalEnergies, a multinational company operating in several energy sectors and headquartered in Paris, France, announced the $635 million deal on Nov. 13. The plants have been owned by Houston-based TexGen Power. The facilities operate within the Electric Reliability Council of Texas (ERCOT).
The plants include:
- Wolf Hollow 1, a 745-MW combined cycle gas turbine (CCGT) plant in Granbury, southwest of Dallas.
- Colorado Bend 1, which includes a 530-MW CCGT and a 74-MW open-cycle gas turbine (OCGT), located in Wharton, southwest of Houston.
- La Porte, a 150-MW OCGT, located in La Porte southeast of Houston.
TotalEnergies on Monday said the gas-fired plants expand the company’s portfolio in Texas, which includes 2 GW of installed renewable energy generation capacity. TotalEnergies also said it has an additional 2 GW of renewable energy projects under construction, and another 3 GW under development. The company said the latest acquisitions will strengthen its trading capabilities in the Texas’ natural gas and electricity markets.
David Pierce, sales director for POWWR, a Connecticut-based energy software group, told POWER: “This is a very wise hedging strategy for TotalEnergies SE. It already has significant renewables capabilities. But, by buying these assets it can protect its renewable offtake contracts with reliable gas-fired low-cost power for when the renewable assets have them upside down in a hedge or contract.”
TotalEnergies said the purchase of the Texas plants is part of the company’s development as an integrated power player. “We are delighted with the agreement signed with TexGen to acquire 1.5 GW of CCGT in ERCOT. After the signing of several corporate PPA [power purchase agreements] 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,” said Stephane Michel, president of the Gas Renewables & Power group at TotalEnergies.
Michel continued: “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.”
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).