OPC Energy Ltd. has announced it’s conducting negotiations with Israeli partners Clal, Migdal, and Poalim Capital Markets to acquire American private electricity generation company Competitive Power Ventures (CPV). CPV is best known for its green electricity and renewable energy operations across several states in the US.
OPC Energy Ltd. has signed a letter of intent to acquire control of CPV, investing a further $700-800 million in its pipeline of projects. The negotiation process is expected to be completed as soon as it receives regulatory approvals and clearances from the US government, which should take between three and six months.
CPV has successfully implemented 31 wind farms with a capacity of about 4,850 megawatts (MW) and has several renewable energy projects in different stages of development — mostly based on solar energy.
It also owns, with partners, five active power plants powered by natural gas that are the newest on the market and can reach a total capacity of 4,045 MW. These stations are based on advanced integrated cycle technology and are not only efficient but also meet high environmental standards.
A significant increase in installed capacity of renewable energies is expected in the next decade, with the United States market considered one of the most strategic. The growing momentum is helped by a renewed focus on reducing carbon emissions and a desire to modernize the electric grid and build more efficient and flexible power plants.
OPC is the leading private electricity company in Israel. They have developed and operate power plants across the country, providing electricity to private companies and the International Electrotechnical Commission (IEC). Their focus is conventional technology and cogeneration technology — a combination of natural gas with diesel oil as a backup.
Rotem Power Plant (owned by Rotem and Veridis) began commercial operations in 2013 and uses dual-fuel conventional technology to reach a capacity of 466 MW. Hadera Power Plant opened in 2020, operates in cogeneration technology to produce both electricity and steam, and has a capacity of 144 MW. Zomet Power Plant is an open-cycle natural gas plant that’s under construction and is expected to reach a capacity of 396 MW.
In 2017, OPC became a public company and was listed for trading in the Tel-Aviv Stock Exchange. Last month, OPC reported revenues of over $168 million for its first half of 2020 and shareholder’s equities of $236.
CPV is a leading company in the US electricity market. It has developed, financed, and manages conventional and renewable power plants in the Northeastern United States, supplying about 100 million inhabitants.
CPV’s goal is to increase America’s energy sustainability through safe, reliable, environmentally responsible, and cost-effective electric power.
With headquarters in Boston and Washington, CPV’s operations cover New York, New Jersey, Virginia, Maryland, Pennsylvania, Ohio, and Massachusetts. CPV also has a presence in Texas and California.
The company’s total installed capacity is 14,803 MW. Its natural gas stations have an installed capacity of 9,953 MW in markets, and four conventional projects are in different stages of development and are expected to reach 3,995 MW.
Through community engagement and strategic partnerships, CPV has successfully developed and financed six state-of-the-art energy centers in the past six years. Their aggregated production has been able to power more than 5 million homes.
Toward Cleaner Energy
CPV’s pioneering energy initiatives combined with OPC’s investment and expansion platform are expected to bring dynamic growth to the electricity market.
This segment is undergoing a process of change in the United States. Coal power is progressively being replaced by natural gas and renewable energies, which are significantly cleaner and can be cheaper.
American coal plants average an age of 40 years, which creates difficulties in dealing with pollution regulations. This is particularly the case for the northeastern states of the US, where local rulings have determined energy targets based on significant restrictions on greenhouse gas emissions.
The Energy Information Agency has reported that some 130,000 MW of coal-fired, fuel oil and diesel power stations will be closed by 2030, replaced by cleaner and more renewable options.
Although the COVID-19 crisis has hurt global growth in renewable power capacity and the number of power installations is set to fall this year, growth is expected to resume in 2021, aided by supportive policies.
The acquisition of CPV by OPC puts the focus on the areas of green energy — in particular natural gas, wind, and solar stations. They are expected to generate significant growth for OPC and its partners, which could include several institutional investors from the Israeli capital market such as Migdal, Clal, and Poalim.