Brookfield Mulls Bid for InterGen’s UK Power Portfolio

Jun 24, 2022 by Bloomberg

Brookfield Asset Management Inc., the Canadian investment giant, is among suitors exploring bids for InterGen BV’s UK power portfolio, people with knowledge of the matter said. 

InterGen has asked for initial offers in July, the people said, asking not to be identified because the information is private. The assets could fetch as much as £500 million ($613 million), according to the people.

InterGen said in April it was working with Greenhill & Co. on a sale of its UK business, which includes four operational gas plants that can generate more than 2.8 gigawatts of power. The portfolio also includes a 450-megawatt battery energy storage project. Edinburgh-based InterGen’s plants supply about 5% of the UK’s generating capacity, according to its website. 

No final decisions have been made, and it could still keep the assets, the people said. A representative for Brookfield declined to comment. 

“Intergen’s shareholders are currently undertaking a review of the structure of the business to best facilitate growth moving forward,” the company said in a statement. 

The profitability of generating electricity from gas has surged, prompting Chancellor Rishi Sunak to look at a introducing a windfall tax for the sector. The government has set its sights on “extraordinary profits” it says the sector is making after announcing a levy on oil and gas producers in May. 

Higher power prices are making generating assets an attractive investment in the UK. The clean-spark spread, a measure of profitability for gas-fired power stations, was about £54 per megawatt-hour in the fourth quarter, compared to about £136 for coal. 

UK month-ahead power prices have surged with rising gas prices to more than double usual levels for this time of year, trading at about £200 per megawatt-hour, according to broker data.

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By Dinesh Nair

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