Plutus PowerGen has entered into a collaboration agreement for equity funding for new gas peaking plants. Plutus and the counterparty intend to work together to  develop and fund four  projects totalling 80MW. A further 160MW of gas peaking plants may follow on.

The company says it expects to maintain a majority equity interest in the gas plants. The plants will be operated in within day, day ahead and balancing mechanism markets as merchant plants.

Plutus currently has a 44.5% equity stake in six diesel plants in operation and one gas site under development, which have been funded by Enterprise Investment Scheme (EIS) investors through Rockpool Investments. Its management of these sites is to be terminated, on a six month notice period to accelerate the sale of this portfolio.

James Longley, interim chief executive, said: “The financial metrics for the gas sites are superior to that of the existing portfolio, and with an established entity who understands the demand and potential of the peaker market.

“…With regard to the Rockpool sites we believe the ending of the management contracts will assist in the facilitation of the sale of the assets which should generate significant profit and have an attractive yield potential for investors and potential buyers once the Capacity Mechanism is reinstated.”