TIDMGRID
RNS Number : 9389C
Gresham House Energy Storage Fund
28 February 2022
28 February 2022
GRESHAM HOUSE ENERGY STORAGE FUND PLC
("GRID" or the "Company")
Capacity Market (CM) Auction 2022 and NAV uplift
Gresham House Energy Storage Fund plc (LSE: GRID) is pleased to
provide shareholders with an update on the 2022 Capacity Market
auction results for the portfolio.
The recent T-1 and T-4 Capacity Market ("CM") auctions* which
took place on 15 and 22 February respectively have both cleared at
record prices. The Company entered operational and pipeline
projects into both auctions and as a result has been awarded
several Capacity Market contracts which are expected to earn
revenues of over GBP108m (assuming CPI at 2%) over the life of the
contracts. These revenues are incremental to revenues currently
used in our valuation models and in producing our Net Asset Value
("NAV") per ordinary share ("Ordinary Share") estimate.
Key highlights of the auction results include:
- T-1 auction for 1-year contracts starting in October 2022, cleared at GBP75,000 per MW
- T-4 auction for 15-year contracts starting October 2025, priced at GBP30,590 per MW
- GRID was awarded contracts for:
o 112.0MW of de-rated capacity** in the T-1 auction for 325MW of
projects
o 180.4MW of de-rated capacity** in the T-4 auction for 463MW of
projects
- Contracts were awarded to both operational and pipeline projects
- T-1 contracts are expected to add GBP8.4m in revenues over one year
- T-4 contracts are expected to add approximately GBP100m in
revenues over the 15-year period, assuming CPI at 2%
GRID's project valuation models assume no CM revenues until
contracts are in place. These contract awards will directly
contribute to the Company's NAV and are expected to add
approximately 15 pence per Ordinary Share to NAV over time. The
impact on the Q1 22 NAV is expected to be a positive uplift of
approximately 5 pence per Ordinary Share. The remaining NAV uplift
of approximately 10 pence per Ordinary Share is expected to come in
subsequent quarters from assets which are under construction as
they are revalued based on future cashflows, in line with the
Company's valuation policy, and include the benefit of these CM
contracts.
The Company expects to publish its Q4 2021 NAV alongside its
Annual Results in April 2022. The uplift from these recently
awarded CM contracts will not be included in Q4 2021 figures. The
Q1 2022 NAV is expected to be published in early May 2022 and is
expected to include around 5 pence of the approximately 15 pence
overall NAV uplift announced today.
The full results of both recent CM auctions can be found on the
EMR delivery body website:
https://www.emrdeliverybody.com/CM/Auction-Results.aspx
John Leggate CBE, Chair of Gresham House Energy Storage Fund plc
commented:
"The Capacity Market offers valuable government backed
contracted revenues to the portfolio. The 15-year T-4 contracts in
particular will further enhance dividend cover and shareholder
returns over the longer term."
Ben Guest, Lead Fund Manager and Managing Director of Gresham
House New Energy, added:
"The Capacity Market is a vital tool for National Grid to ensure
sufficient dispatchable generation to meet demand requirements as
renewable generation expands, intermittency rises and as battery
storage installations continue to lag renewable deployment.
We are very pleased with the results of the latest auction and
the large volume of contracts we were able to secure for the
Company's portfolio and pipeline. This increased level of
contracted revenues also supports our existing financing
arrangements and any potential future arrangements."
* T-1 and T-4 auctions relate to contract start dates occurring
one and four years respectively after the most recent 1(st) of
October, in these instances referring to 1 October 2022 and 1
October 2025.
** Contract prices are paid against the de-rated capacity of
assets. De-rated capacities are determined by applying the relevant
de-rating factors for the technology type, and in the case of
batteries also their duration, to the connection capacity of the
asset. The de-rating factors are set by the Electricity System
Operator ahead of each auction so that available energy is
comparable between different technology types.
For further information, please contact:
Gresham House New Energy
Ben Guest +44 (0) 20 3837 6270
Jefferies International Limited
Stuart Klein +44 (0) 20 7029 8000
Gaudi Le Roux +44 (0) 20 7029 8000
KL Communications gh@kl-communications.com
Charles Gorman +44 (0) 20 3995 6673
Will Sanderson
JTC (UK) Limited as Company Secretary GHEnergyStorageCoSec@jtcgroup.com
Christopher Gibbons +44 207 409 0181
About the Company and the Manager:
Gresham House Energy Storage Fund plc seeks to provide investors
with an attractive and sustainable dividend over the long term by
investing in a diversified portfolio of utility-scale battery
energy storage systems (known as BESS) located in Great Britain,
Northern Ireland and the Republic of Ireland. In addition, the
Company seeks to provide investors with the prospect of capital
growth through the re-investment of net cash generated in excess of
the target dividend in accordance with the Company's investment
policy.
The Company targets an unlevered Net Asset Value total return of
8% per annum, calculated net of the Company's costs and
expenses.
Gresham House Asset Management Limited is the FCA authorised
operating business of Gresham House plc, a London Stock Exchange
quoted specialist alternative asset manager. Gresham House is
committed to operating responsibly and sustainably, taking the long
view in delivering sustainable investment solutions.
www.greshamhouse.com
Definition of utility-scale battery energy storage systems
(BESS)
Utility-scale battery energy storage systems (BESS) are the
enabling infrastructure that will support the continued growth of
renewable energy sources such as wind and solar, essential to the
UK's stated target to reduce carbon emissions. They store excess
energy generated by renewable energy sources and then release that
stored energy back into the grid during peak hours when there is
increased demand.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCPPUMAPUPPGMQ
(END) Dow Jones Newswires
February 28, 2022 02:00 ET (07:00 GMT)
Gresham House Energy Sto... (LSE:GRID)
Historical Stock Chart
From Mar 2024 to Apr 2024
Gresham House Energy Sto... (LSE:GRID)
Historical Stock Chart
From Apr 2023 to Apr 2024
