French multinational integrated oil and gas company Total has signed an agreement with KKR-Energas to acquire two gas-fired combined cycle power plants in the northern and eastern regions of France.
The power plants have a combined potential electricity generation capacity of approximately 825MW.
Total Gas, Renewables and Power president Phillipe Sauquet said: “This acquisition allows Total to continue its integration along the gas and electricity value chain, from production to marketing. With the addition of two gas plants acquired from KKR-Energas, and a growing portfolio of renewable power, the group will have the capacity to generate over one-third of the cumulated consumption of its B2C and B2B customers.
“Gas-fired power generation sources are an ideal complement to intermittent renewable sources of electricity. These flexible power plants enable the group to optimise the cost of electricity supply to its customers.”
The transaction is subject to approval by the relevant authorities.
Through its 73% in natural gas distribution company Direct Energie, the company also owns two power plants with a combined generation capacity of 800MW. One is located in France and the other in Belgium. Total plans to develop another 400MW power plant in the Brittany region.
Within the next five years, the oil and gas giant is aiming to achieve a 15% market share of the B2C gas and electricity supply market in France and Belgium.
When announcing the sale of the two combined cycle power plants last year, KKR-Energas CEO Antonio Haya told French national newspaper Les Echos: “We are looking at whether the market has an appetite (for these plants).”
He added that the alternative would have been to raise €100m in debt finance, which was not possible at the time of purchase due to difficult financial situations.
The power plants were used primarily to supply electricity during peak winter consumption, and benefitted from France’s new capacity market, which rewards back-up power generation.