TIDMGRID
RNS Number : 4641O
Gresham House Energy Storage Fund
30 January 2019
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PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES,
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WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.
Gresham House Energy Storage Fund plc (GRID)
30 January 2019
Factsheet publication and quarterly NAV update
Gresham House Energy Storage Fund Plc (GRID) (the "Fund")
announces that its factsheet for the period ended 31 December 2018
is available at:
http://newenergy.greshamhouse.com/esfplc/
Extracted text of the commentary is set out below:
NAV update & operational highlights
The Fund listed, before fees and expenses, on 13 November 2018
with GBP100m of gross proceeds.
The Fund is currently ca.60% invested in five seed Energy
Storage Systems ("ESS") projects, described below, and Gresham
House Asset Management Limited (the "Manager") expects the
remaining proceeds from the IPO to be fully committed in the first
half of 2019.
As at 31 December 2018, the Net Asset Value ("NAV") of the Fund
was 98.04p, taking into account net income, launch costs and costs
associated with the acquisition of the seed assets.
The Fund's first dividend is expected to be declared in April
and paid to investors in May 2019.
The Fund's ESS projects generate revenues primarily from Firm
Frequency Response (FFR), Asset Optimisation (Trading), Capacity
Market (CM) and other grid connection-related charges, including
Triads. Revenues from the portfolio's seed ESS projects are
currently skewed to FFR revenues, FFR being the provision to the
National Grid of a dynamic response service to maintain the grid's
electrical frequency at 50Hz. Over the coming year, operations are
expected to be increasingly targeted towards Asset Optimisation, as
this becomes the more profitable business activity. There are
several additional revenue opportunities emerging for the portfolio
as a series of regulatory changes are implemented.
The Manager has been actively working to earn as many of the
three winter Triad payments available between November and
February, as possible. To do this the Fund's ESS projects must
generate during certain half-hourly peaks in demand over the
National Grid. The Manager has hit the three potential peaks so far
this winter. Triad revenues will be notified to the Fund during
March 2019, once National Grid publishes its review of the 18/19
winter period.The Fund models a 66.6% success rate for achieving
these peaks.
Portfolio activity & market outlook
The Fund's seed portfolio was acquired at the IPO in November,
with an effective transaction date of 30 September 2018. The
acquisition was for 70MW at a cost of GBP57.2m. The Manager is now
focused on deploying the remaining cash raised at IPO.
The construction of the Fund's next project, Wolverhampton, a
5MW symmetrical battery project, is underway. Acquisition of this
project will complete after commissioning which is expected to take
place in Q2 2019.
During February, signing of an EPC contract for the next 50MW
project is set to commence, for potential acquisition by the Fund
in Q3 2019. Other pipeline projects are expected to follow over the
coming months (see table below).
In order to build out the remaining pipeline of exclusive
projects highlighted at the time of the IPO, it is our intention to
raise additional funds in 2019 as part of the placing programme
allowed under the Prospectus.
The Manager is of the view that the UK's exposure to renewable
energy generation has increased significantly over the last few
years and the pace has not lessened despite the removal of legacy
subsidies to onshore wind and solar. This is largely because the
development of offshore wind installations has continued apace. As
a result, generation from wind is having a growing impact on the
grid, generating a volatile supply of energy which underpins the
opportunity for ESS.
Current portfolio
Project Location MW Site type Commissioning
Staunch Staffordshire 20 Battery and generators, Operational
net export
----------------- --- ------------------------ --------------
Rufford Nottinghamshire 7 Battery and generators, Operational
symmetrical
----------------- --- ------------------------ --------------
Lockleaze Bristol 15 Battery, symmetrical Operational
----------------- --- ------------------------ --------------
Littlebrook Kent 8 Battery, symmetrical Operational
----------------- --- ------------------------ --------------
Roundponds Wiltshire 20 Battery and generators, Operational
net export
------------- ----------------- --- ------------------------ --------------
Total 70
-------------------------------- --- ------------------------ --------------
Pipeline
Project (1) Location MW Site type Commissioning
(2)
Wolverhampton West Midlands 5 Battery, symmetrical Expected Q2
2019
----------------- ---- ------------------------ --------------
Wickham Market Suffolk 50 Battery, net Expected Q3
export 2019
----------------- ---- ------------------------ --------------
Hereford Herefordshire 28 Battery and generators, Expected Q3
net export 2019
----------------- ---- ------------------------ --------------
Thurcroft South Yorkshire 50 Battery, symmetrical Expected Q4
19/Q1 20
----------------- ---- ------------------------ --------------
Red Scar Lancashire 49 Battery and generators, Expected Q4
symmetrical 19/Q1 20
----------------- ---- ------------------------ --------------
Littlebrook Kent 5 Battery, symmetrical Expected Q1
2 (extension) 2020
(3)
---------------- ----------------- ---- ------------------------ --------------
Total 187
----------------------------------- ---- ------------------------ --------------
(1) All projects are owned by Gresham House Group or are
projects in which members of the Gresham House New Energy
management team have an interest and exclusivity over the projects
has been granted in favour of the Fund;
(2) Expected commissioning dates are indicative only and based
on conversations with relevant DNOs; and
(3) Remains subject to planning consent.
For further information, please contact:
Gresham House New Energy
Ben Guest +44 (0) 20 3837 6270
Lizzie Darbourne +44 (0) 20 3903 5562
Cantor Fitzgerald Europe
Richard Harris +44 (0) 20 7894 8229
Robert Peel +44 (0) 20 7894 7719
Alan Ray +44 (0) 20 7894 8590
Montfort Communications greshamhouse@montfort.london
Gay Collins +44 (0) 779 862 6282 /
Louis Supple +44 (0) 203 770 7907
Notes:
Gresham House Energy Storage Fund PLC (GRID or the "Fund") seeks
to capitalise on the growing intraday supply and demand imbalances
caused by Great Britain's ever-increasing reliance on renewable
energy. The Fund aims to provide investors with an attractive and
sustainable dividend by investing in a portfolio of utility-scale
Energy Storage Systems ("ESS") located in Great Britain, which use
batteries and sometimes generators to import and export power,
accessing multiple revenue sources within the power market.
The Fund targets a Net Asset Value (NAV) total return of 8.0%+
per annum, once the Fund is fully invested, before leverage and net
of Fund expenses, and a minimum target dividend of 7.0p per
Ordinary Share (1),(2). Returns are not correlated to the absolute
level of wholesale power prices and are not dependent on any
subsidies.
(1). this is a target only and not a profit forecast. There can
be no assurance that this target will be met or that the Fund will
make any distributions at all. This target return should not be
taken as an indication of the Fund's expected or actual current or
future results. The Fund's actual return will depend upon a number
of factors, including but not limited to the Fund's net income and
the Fund's ongoing charges figure. Potential investors should
decide for themselves whether or not the return is reasonable and
achievable in deciding whether to invest in the Fund.
(2). 4.5p+ per Ordinary Share in the first year
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END
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