GIP completes acquisition of NRG's renewables business
Global Infrastructure Partners (GIP) has purchased the renewables business of American energy company NRG.
In a deal which was first announced in February but was finalised this week, NRG closed on the sale of its interest in NRG Yield and its Renewables Platform. GIP bought the renewable portions of the company in a transaction which reportedly resulted in $1.35bn in cash proceeds for NRG, as well as removing $6.7bn debt from the seller’s balance sheet.
The sale is in line with GIP’s commitment to the expansion of its renewables business. As part of the deal, GIP is now the controlling stockholder of NRG Yield, which will change its name to Clearway Energy Inc.
Mauricio Gutierez, President and CEO of NRG, stated: “The asset sales are a critical part of our transformation an we are pleased to achieve this significant milestone, which aims to focus our company while strengthening our balance sheet and delivering value to shareholders.”
Cristopher Sotos, President and CEO of the newly-named Clearway Energy, stated: “Clearway Energy’s outlook could not be brighter as the new sponsorship with GIP provides the company proven operational, development, and investment expertise to lead us through the next stage of our growth expertise.”
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.