SHERIDAN, WYOMING – November 04, 2024 – Shell Energy North America (SENA), a subsidiary of Shell plc, is making a significant move to solidify its position in the U.S. energy market. The company recently announced the acquisition of a 609-megawatt combined-cycle gas turbine power plant in Rhode Island, a move that underscores Shell's commitment to providing reliable and efficient energy solutions.
This acquisition isn't just about expanding Shell's portfolio; it's about strategically positioning the company in a region poised for growth. The Independent System Operator New England (ISO New England) power market, served by the acquired plant, is expected to see increased demand in the coming years due to the region's focus on decarbonization. This means a greater need for reliable energy sources to support the transition to cleaner energy solutions in sectors like home heating and transportation.
"Shell has had a successful integrated gas and power business in the growing ISO New England market for over 20 years, and this acquisition secures valuable trading opportunities by guaranteeing SENA’s position in the market,” said Huibert Vigeveno, Shell Downstream, Renewables & Energy Solutions Director. “Our strong understanding of this plant’s performance positions Shell to capitalise on its value within our existing trading portfolio.”
The acquisition brings several key advantages for Shell:
Secured Supply and Capacity: The plant will provide a long-term source of energy and capacity, ensuring Shell can meet the growing demands of the New England market.
Enhanced Trading Opportunities: Owning this power plant gives Shell a stronger foothold in the deregulated market, opening up new trading opportunities and enhancing its competitive edge.
Operational Stability: By acquiring a plant with which it has an existing energy conversion agreement, Shell ensures continuity of operations and mitigates potential market risks.
Supporting the Energy Transition: Combined-cycle gas turbine power plants offer a bridge between traditional energy sources and renewables. Their efficiency and flexibility make them ideal for balancing the intermittency of solar and wind power, ensuring a stable energy supply as the region transitions to a cleaner energy mix.
The Rhode Island plant, operational since 2002, boasts a maximum capacity of 609 MW and an average operating capacity of 594 MW. Its combined-cycle technology uses both gas and steam turbines to generate electricity, maximizing efficiency and reducing emissions compared to single-cycle plants.
This strategic acquisition aligns with Shell's broader energy strategy, which focuses on providing a diverse range of energy solutions to meet the evolving needs of its customers. While Shell continues to invest in renewable energy sources, it recognizes the crucial role that natural gas plays in the transition to a lower-carbon future.
The acquisition is expected to be finalized in the first quarter of 2025, pending regulatory approvals. It's a significant investment that is projected to generate strong returns, exceeding Shell's internal rate of return targets for its power business.
About Shell Energy North America
Shell Energy North America is a full-service energy company with over 25 years of experience in the North American market. As a leader in wholesale and retail power, natural gas, and environmental products, SENA is committed to providing innovative energy solutions to meet the diverse needs of its customers