UK Power Reserve (UKPR) has been bought by the Sembcorp energy group for £216 million in a surprise deal that will see the Singapore-based company take in over 1GW of additional capacity, including 120MW of under-development battery storage projects.
The agreement covers the business, assets and debt of the Solihull-based firm which has been sold by Equistone Partners Europe and Inflexion Private Equity who invested in the company in late 2015, five years after it was founded.
Currently Sembcorp supplies energy, centralised utilities and services to industrial firms on Teesside but will now oversee UKPR’s flexible distributed energy generating assets - predominately gas - spread across 32 locations in England and Wales.
The company also has 120MW of Capacity Market contracts for battery projects previously said to come online by the end of 2018.
In total, Sembcorp’s new portfolio comprises 533MW in operation with a further 480MW in construction and development and all expected to come online by 2019.
The company says its new portfolio will create a strong integrated energy business, poised for further growth, combining UKPR merchant energy capabilities with Sembcorp’s existing business on Teesside to better meet the needs of the energy market.
Nomi Ahmad, head of Sembcorp’s UK utilities business, said: “Sembcorp is delighted to have secured this exciting business, which deepens our presence in the UK considerably and provides major opportunities for further expansion.
"UKPR and Sembcorp’s existing Teesside business will form a strong integrated energy business in the UK, combining centralised services at Wilton with multiple flexible assets across the country along with expertise across the full spectrum of UK energy markets.”
Sembcorp UK currently has 210MW of generation capacity at Wilton International industrial site in Teesside, comprising Combined Heat and Power, steam power and renewable generation to service energy-intensive industrial and commercial customers.
It is also seeking UK planning approval to develop two combined cycle gas turbine units of up to 1,700 megawatts at Wilton.
Tim Emrich, who is stepping down as CEO of the UKPR to be replaced by current chief commercial officer Sam With, said the deal promised to be an “exciting new chapter” for the company and that integration with Sembcorp opens up “huge possibilities for the future”.
Wither added: “Sembcorp’s coming on board as UKPR’s key shareholder is a vote of confidence in our company and team. Moving ahead, UKPR looks forward to growing as part of the Sembcorp Group’s integrated energy business in the UK. We will also look to continue the close working relationships we have built with our existing commercial partners over the years.”