RNS Number : 7035A

Gresham House Energy Storage Fund

27 September 2022

27 September 2022

Gresham House Energy Storage Fund plc

("GRID" the "Company" or the "Fund")

Half-year results to 30 June 2022

Gresham House Energy Storage Fund plc, the UK's largest fund investing in utility-scale battery energy storage systems (BESS) to power the renewable energy transition, announces its half-year results for the period ending 30 June 2022.

Performance highlights in H1 2022

   --    Net Asset Value (NAV) up 53.5% to GBP785.4mn (31 December 2021: GBP511.7mn) 
   --    NAV total return of 27.2% with NAV per share rising to 145.11p (31 Dec 2021 :116.86p) 

-- Share price total return of 23.3% vs FTSE All Share Index total return of -4.6% in H1 22. Since IPO, returns have been 86.9% and 15.8% respectively

   --    Dividends of 3.5p per share paid in H1 22, with Operational Dividend Cover at 1.18x 

-- Underlying Operational Portfolio Revenue rose 20.6% to GBP30.1mn (H1 21: GBP24.9mn) and EBITDA stood at GBP22.7mn (H1 21: GBP22.4mn)

-- Weighted average discount rate of 10.79% for assets valued on a discounted cash flow basis (31 December 2021: 10.77%)

Deployment, Fundraising

-- 425MW across 17 operational projects as at 30 June 2022, which has risen to 500MW across 19 operational projects as at 31 August 2022

-- 602MW across 11 projects under construction as at 30 June 2022, 527MW as at 30 August 2022, and a further 90MW (Enderby and Coupar Angus) due to commission in the coming days

-- Total operating capacity of over 1GW / 1.2GWh(1) targeted by end Q1 23. All projects 100%-owned

   --    Target portfolio of 1.6GW by mid-2024 with a duration of 2.1GWh [1] 
   --    GBP150mn raised in oversubscribed equity placing in May 2022 

-- Significant additional pipeline in progress in GB as well as Overseas following recent Investment Policy changes

-- Timely commissioning of projects is our key focus by resolving connection bottlenecks in the industry

Market environment and outlook

   --    UK renewable penetration reached a record 45.5% [2] in Q1 22 driven by offshore wind 

-- 11GW of renewable capacity contracted in latest Contracts for Difference (CfD) subsidy auctions , which could drive renewable penetration above 65% within 5 years, underpinning the need for BESS

-- Power price volatility primarily driven by renewables as well as shortfalls in generation capacity and gas supply constraints in Europe in the near term

Other highlights

-- NAV per share increase in H1 22 assisted by upward revaluations of projects as they go from being valued at cost to a fair value using a net present value basis, reflecting the attractive underlying internal rates of return (IRRs) of our projects at the time they are acquired. Discount rate assumptions have remained unchanged during the period

-- Revenues have remained high, supported by elevated frequency response pricing and a strong trading backdrop. Frequency response pricing is beginning to drop as additional BESS capacity becomes operational

-- The very recent announcement by the Chancellor of the Exchequer of the cancellation of the previously planned Corporation Tax increase to 25% from April 2023, is expected to contribute positively to the Q3 2023 NAV, and NAV per share. In addition, we are still assessing the potential impact over time of FOREX movements

-- Awarded Best Sustainable Specialist Fund at the Investment Week Sustainable Investment Awards for the second year in succession

John Leggate CBE, Chair of Gresham House Energy Storage Fund plc, said:

"We are pleased with GRID's performance in the first half of the year as we continue to deploy essential battery energy storage infrastructure and deliver above-target total returns to shareholders. We have started to draw down on our debt facilities as expected. Combined with the GBP150 million equity we raised from shareholders, we expect these funds to deliver most of the existing pipeline, taking GRID to over 1GW of capacity, currently expected by the end of Q1 2023.

"We are ambitious to scale up GRID, both in the UK and beyond, enabling a cost-effective transition to net zero, supporting near-term energy security as gas supplies continue to be unreliable while helping maximise the output from low-cost renewable energy sources."

Ben Guest, Fund Manager of Gresham House Energy Storage Fund plc and Managing Director of Gresham House New Energy, said:

"It has been gratifying to see an increase in our operational capacity, with lots more expected, which is expected to drive growth proportionately in revenues, EBITDA and dividend cover, all things being equal.

"Our next batch of projects is in advanced stages of construction; as of today, a further 527MW across 9 projects are anticipated to commission in the next six months, going into 2023. Beyond that, our project pipeline into 2024 is also strong, with over 500MW planned for the 12-18 months that follow.

"GB needs at least 20GW of BESS by 2030, demonstrating its critical importance to the energy transition. We are working on additional pipeline both in GB and Overseas, and we look forward to providing updates as this work progresses.

"The rate of deployment of BESS continues to lag the deployment of renewables in GB and this will continue to underpin revenues for the sector for years to come. However, while this backdrop is positive it is important for the industry to acknowledge the need for the rate of deployment of BESS to accelerate. While lockdowns and supply chain issues caused constraints in recent times, the main bottleneck today is in the slow rate of grid connection activity, impacting the industrywide deployment of BESS. We invite Ofgem, grid companies and other stakeholders to act to solve this issue. It is not in anyone's interest to see the unnecessary curtailment of incremental renewable generation and for associated balancing costs to increase exponentially due to a lack of flexible generation."

The Company's Interim Report and Financial Statements for the period ending 30 June 2022 are included in this announcement http://www.rns-pdf.londonstockexchange.com/rns/7035A_1-2022-9-26.pdf , available on the Company's website https://greshamhouse.com/real-assets/new-energy-sustainable-infrastructure/gresham-house-energy-storage-fund-plc/ and also on the National Storage Mechanism https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

A webinar and Q&A session for investors, to discuss the results, will be held at 11am (BST) today, Tuesday 27 September 2022. This will be an opportunity to hear fund manager, Ben Guest provide an update on GRID's operational and financial performance and to ask questions. Registration is at https://greshamhouse.zoom.us/webinar/register/WN_aiAZNNgPTWOYT0J3lR3bwQ or via the GRID website https://greshamhouse.com/real-assets/new-energy-sustainable-infrastructure/gresham-house-energy-storage-fund-plc/ .

For further information, please contact:

  Gresham House New Energy 
   Ben Guest 
   Rupert Robinson                        +44 (0)20 3837 6270 
 Jefferies International Limited 
  Stuart Klein 
  Gaudi Le Roux                           +44 (0)20 7029 8000 
 KL Communications 
  Charles Gorman 
  Charlotte Francis 
  Millie Steyn                            +44 (0)20 3995 6673 
 JTC (UK) Limited as Company Secretary 
  Christopher Gibbons                     +44 (0)20 3846 9774 

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. BESS also provide Frequency Response services to National Grid whereby batteries import and export power with the aim to keep real-time supply and demand in near-perfect balance while also protecting against unexpected outages of major power plants.


Company Financial Highlights

   --    NAV per share (pence): 145.11p (31 December 2021: 116.86p) 

(as at 30 June 2022)

-- Company profit and total comprehensive income: up 291% to GBP141.9mn (30 June 2021: GBP36.3mn)

(for the six months to 30 June 2022)

   --    Total gross equity funds raised: GBP150mn (30 June 2021: GBPnil) 

(for the six months to 30 June 2022)

   --    EBITDA of underlying investment portfolio [3] : GBP22.7mn (30 June 2021: GBP22.4mn) 

(for the six months to 30 June 2022)

   --    Dividend per Ordinary Share (pence): 3.5p (30 June 2021: 3.5p) 

(for the six months to 30 June 2022)

   --    Ordinary Share Price Total Return since IPO: +86.9% 

(IPO to 31 December 2021: +51.5%)

(for the period from IPO to 30 June 2022)

   --    NAV per Ordinary Share Total Return : +27.2% 

(six months to 30 June 2021: +10.0%)

(total return for the six months to 30 June 2022)

   --    Operational portfolio reached 500MW (425MW as of 31 December 2021) 

(as of 31 August 2022)

Performance Highlights

 Net Asset Value (NAV) as of 30 June 2022 rose to GBP785.4mn or 145.11p per share (vs. 116.86p 
  as at 31 December 2021 and 109.89p as at 30 June 2021). 
 Full Operational Dividend Cover (1) of 3.5 pence dividend was achieved in H1 2022. This is 
  equivalent to a 4.5% annualised dividend yield based on the closing share price on 30 June 
  The Board reaffirms a target dividend of 7.0p for 2022 and expects full Operational Dividend 
  Cover for the full year. The Company will balance future dividend target levels with increases 
  in Operational Dividend Cover. 
  A new Prospectus was published in May 2022 with an initial equity raise of GBP150mn which 
  was oversubscribed. The share capital raised, combined with the debt facilities both available 
  and anticipated in the form of the accordion, will allow the Company to execute on the deployment 
  of most of its pipeline of Battery Energy Storage Systems, (BESS) which is expected to see 
  total operating capacity reach 1,597MW. 
  A first drawdown of GBP10mn was made from the GBP180mn total debt facility [4] in May 2022, 
  as deployment into BESS under construction progressed in the period. The Company expects to 
  fully utilise th e existing GBP150mn capex facility by Q 1 2023 and has begun looking at extending 
  the facility in the second half of 2022 through the uncommitted accordion already in place. 

Operational Highlights

   The underlying investment portfolio generated revenues [5] of GBP30.1mn (June 2021: GBP24.9mn) 
    and EBITDA of GBP22.7mn (June 2021: GBP22.4mn). 
    While Operational Capacity remained unchanged at 425MW in the six months ended 30 June 2022, 
    the Company is pleased to report that as of 31 August 2022 two additional projects have been 
    commissioned: the 35MW project at Arbroath and the 40MW Stairfoot project . 
    As flagged in the full year results, assets under construction have continued to experience 
    delays with equipment deliveries and grid connections being experienced industry-wide. The 
    future projections of the pipeline later in this report include these impacts. 
    The Company also expects the commissioning of the 50MW Enderby project and the 40MW Coupar 
    Angus project in the coming days which will increase Operational Capacity further. In addition, 
    further capacity currently under construction is expected to become fully operational in the 
    coming months. Total Operational Capacity is expected to reach 690MW by the end of 2022. 
    During the first half of 2022 four out of five, or 85MW out of 120MW, of the projects contracted 
    in Enhanced Frequency Response (EFR) reached the end of their 4-year contracts. These projects 
    have subsequently entered Dynamic frequency response services, resulting in a like for like 
    increase in revenues. The remaining 35MW project saw its EFR contract end in July 2022 and 
    was also successfully submitted into the newer services. 
    Work has begun to increase the duration of each of the EFR projects, most to two hours, with 
    construction completion planned for between Q4 2022 and Q1 2023, as detailed in the Investment 
    Manager's report. 


On behalf of the Board, I am pleased to present the Interim Report and Accounts of Gresham House Energy Storage Fund plc (the "Fund" or the "Company") for the six-month period ending 30 June 2022.


The Board is delighted that the Fund continues to thrive and scale up.

Strong share price performance has been underpinned by significant uplifts in the Fund's NAV per share which have largely been driven by upward revaluations of projects as they go from being fair valued at cost to a fair value using a net present value basis in accordance with the Company's valuation policy. These valuation uplifts reflect the attractive underlying internal rates of return (IRRs) of our projects at the time they are acquired. We look forward to this theme continuing to drive value as the current pipeline is built out over the coming quarters.

Following shareholder approval of changes to the Company's Investment Policy, the Company is now permitted to invest up to 30% of its gross assets internationally. This important change allows the Manager to pursue opportunities beyond British shores as the BESS market opportunity expands globally with energy security high on the agenda. Exciting as it is, this expansion will be approached in measured steps, to ensure that the risks of different geographies are well understood. The other changes to the Investment Policy approved by our shareholders will provide the Manager with welcome flexibility and ability to operate and execute transactions in a more streamlined and efficient manner.

The Fund's projects also continue to generate above budget cash returns as market fundamentals remain healthy. The key factor driving the revenue generation potential of batteries continues to be the rising penetration of renewables, combined with the falling contribution from gas-fired and coal-fired generation. In this vein, it has been positive to see renewables reach a new record share of electricity generation in the UK in Q1 2022 of 45.5%. The new UK Government is expected to continue to support renewables and decarbonisation in order to reduce reliance on fossil fuels and accelerate the UK's strategic agenda towards energy self-sufficiency.

Meanwhile a record 11GW of renewable capacity has been contracted in the fourth Contracts for Difference (CfD) subsidy regime's Allocation Round (known as AR4). 7.6GW of this capacity will be offshore and remote island wind which was contracted at a new record low price of GBP37/MWh (in 2012 real prices). This, along with other capacity already contracted in AR3, could take UK renewable penetration above two-thirds within the next five years, which might drive significant increases in required BESS capacity.

Whilst market fundamentals remain healthy, the markets are clearly becoming more volatile as inflation grips economies, as interest rates rise and as the geopolitical backdrop turns more unstable. In addition, supply chain challenges remain following two years of COVID-19 related lockdowns and other restrictions, including increased transport costs. The Manager is working hard to build resilience against future disruptions by taking advantage of our scale and expertise and by extracting maximum value from our operational portfolio and construction activities.

It is clear that Energy Storage is a business strongly driven by the use of data. The Manager's team continues to build on its digital platform, first mentioned at our Capital Markets Day in May 2022, to take advantage of this by combining the huge amounts of market, commercial, technical and other information to which it has access to optimise project designs and revenue generating operations. We look forward to sharing more on this topic shortly.

Last but not least, the Manager continues to progress its ESG (environmental, social and governance) considerations. The Company is committed to reporting against Diversity & Inclusion (D&I) standards and Task Force on Climate-related Financial Disclosures (TCFD) at the next annual report, as well as progressing internally motivated initiatives, with a current focus on a battery supply chain audit and the long-term recycling of batteries.

Fund performance update

The NAV rose significantly in the six months to 30 June 2022 to GBP785.4mn up from GBP511.7mn at 31 December 2021. NAV per share increased by 24% to 145.11p, driven mostly by gains from the revaluation of projects previously held at cost now being valued based on the Net Present Value of future cashflows in accordance with the Company's Valuation Policy. This valuation uplift primarily reflects the attractive IRR of projects relative to the Company's weighted average discount rate as well as the benefit of funding incremental projects with debt financing.

The Fund has continued the strong financial performance of 2021 into the first six months of 2022, achieving Operational Dividend Cover [6] of 1.18x (FY 2021: 1.32x). This has been achieved despite an increase in gross dividends paid (due to the increased share count following the Company's equity issuance in May 2022) and while not yet benefitting from operational earnings from the projects that this equity capital has funded. The latter is set to change with operational capacity of the underlying portfolio increasing by 75 MW to 500MW since the period end, as of 31 August 2022. Further capacity of 240MW is expected to be added in the remainder of 2022, bringing the anticipated operational capacity of the portfolio to 690MW by the end of 2022.

Performance has been underpinned by high prices earned from frequency response services, and from Dynamic Containment (DC) in particular. The volume procured by National Grid ESO has exceeded their forecast levels at the start of 2022, while delays in commissioning new BESS projects in general has resulted in a tight supply and thus high prices. We do expect the frequency response market to become saturated across all contract periods (each 4 hours long) on most days in H2 2022 as our own and other capacity edges the market into oversupply for this service, as the Manager has long expected and predicted.

Commissioning of our pipeline projects, combined with battery duration extensions at the projects that were previously in EFR contracts, is increasing the revenue-generating potential of the portfolio over the second half of 2022. This is expected to offset expected declines in frequency response service market revenues. Importantly, the Manager is confident that the portfolio will earn revenues at or above the level assumed in our valuation models which underpins the Company's NAV.

Fund strategy and market positioning

In Q2 2022 the Company received shareholder approval for amendments to its Investment Policy. The purpose of these amendments is to carefully position the Company to capture the growth emerging in Overseas Jurisdictions [7] and to drive incremental value for shareholders, by seeking permission to:

   --    Invest in Ready-to-Build Projects (up to 10% of GAV [8] ) 

-- Invest in BESS projects in Overseas Jurisdictions (up to 30% of GAV) with or without co-location arrangements [9]

   --    Acquire land in connection with BESS projects in the portfolio, and 
   --    Combine equipment and construction loan buckets into one (combined limit up to 25% of GAV) 

The Investment Policy changes will allow the Manager to deploy incremental capital into exciting opportunities in new markets, diversifying revenues and risks whilst maintaining the same focus on the fundamental wholesale market dynamics enjoyed by our BESS projects in the UK. The ability to buy land gives the Manager the opportunity to improve long-term project returns, while the other changes above give the Manager a greater degree of flexibility to execute projects as efficiently as possible.

Capital Markets Day

On 4 May 2022, the Manager hosted its inaugural Capital Markets Day. Over 200 participants registered for the event, which was hosted online and recorded. We appreciate the support of our growing investor base and deepening analyst interest as we continue to provide insights into the Company's business model and how the Company creates shareholder value.


The Company issued a Prospectus in May 2022 for the issue of up to 400 million new shares. Following the publication of the Prospectus, the Company raised GBP150mn through the issue of 103 million shares at a valuation of 145p per share.

The Board and Manager were encouraged by the strong uptake of the Company's shares with demand significantly exceeding the share issuance, and we are thankful to our shareholders for their support of the share offer.

Share price performance

During a turbulent time for the UK and global economy, it has been gratifying to see the continuing appreciation in the Company's share price, in particular the continuing premium to NAV per share. We would like to think this might be in part because of our operational track record, the Manager's prudent management of capital and acquisition strategy and the sector's return characteristics which are uncorrelated to broader markets.

The Share Price Total Return since IPO reached 86.9% through to 30 June 2022 (FY 2021: 51.5%) and 23.3% for the six months to 30 June 2022. By contrast, the FTSE all share index Total Return was -4.6% for the six months to 30 June 2022.

ESG - Sustainability

The Manager is working hard on its commitments to integrate sustainability metrics into its project evaluation and operations. The Manager has committed to seven core areas of focus which are highlighted in the Sustainability Report on page 15.

It is worth drawing out the highlights:

- a commitment to comply with all applicable standards starting with Task Force on Climate-Related Financial Disclosures (TCFD) (which include emissions) and Diversity, Equity & Inclusion disclosures in the next Annual Report and compliance with SDR (and potentially SFDR, the EU equivalent) once the UK standards have been finalised

   -     a commitment to proactivity and integrating guidance and feedback from our investors 
   -     completion of a third-party supply chain audit of the battery market 
   -     commitment to developing a working policy on battery recycling 

The Board is clear on the importance of aligning the ESG activities and measures with the Company's purpose, and that is an active area of discussion between the Board and the Manager.


The outlook for the Company remains exciting and the Manager remains focused on future growth opportunities. International markets are starting to open up for BESS investment, with regulatory changes and growing renewable penetration echoing the development seen in the UK, and the Fund is ready to take advantage of this opportunity. However, over the next two years, the Manager will primarily deliver against its UK and Ireland pipeline. Despite some delays, our ambitions are broadly on track. In summary, the Manager fully expects to continue to build on the pipeline, both domestically and abroad.

Our scale remains a competitive advantage that we continue to exploit. It allows the Manager to continue investing in its team, to extract synergies and to capture the interest and attention of even the largest battery and other critical equipment suppliers. That in turn allows the Manager to secure timely supplies, even in the current tight market for batteries.

Staying focused on near term delivery goals, the Company looks forward to the commissioning of the next suite of investment projects and markedly increasing the revenue generating potential of this portfolio as the MWs and MWh scale up.

Even in the face of the impact of the geopolitical tensions impacting the global energy markets, the Company remains in a strategic sweet spot of opportunity.

John S. Leggate CBE, FREng


Date: 26 September 2022


Gresham House Asset Management Limited (GHAM) is wholly owned by Gresham House plc (GH), an AIM-quoted specialist alternative asset manager with a market capitalisation of GBP 302mn as at 30 June 2022 . Gresham House provides funds, direct investments and tailored investment solutions, including co-investment , across a range of highly differentiated alternative strategies. GHAM's expertise includes strategic public equity, private equity, forestry, housing, new energy and infrastructure.

Portfolio and pipeline overview

In the first six months of 2022 the Company grew its overall portfolio through the acquisition of the project rights relating to Elland (50MW), York (50MW) and West Bradford (87MW) taking the total portfolio capacity to over 1GW as of June 2022 (December 2021: 850MW).

The average battery duration has also increased. New projects will be built with at least 1.5 hour batteries, and in addition, duration extensions are underway for 120MW of assets previously contracted in EFR, which will take the duration for most of those projects to c.2 hours.

The operational capacity of the Company's investment portfolio remained at 425MW across 17 projects as of 30 June 2022 (31 December 2021: 17 projects and 425MW) , although it increased to 500MW as of 31 August 2022 with the energisation of Arbroath and Stairfoot. Coupar Angus (40MW) and Enderby (50MW) are expected to be energised in the coming days taking total operational capacity to 590MW . Delays in both equipment availability and connection dates have caused a number of delays to commissioning dates meaning several projects which were originally planned for H1 2022 are now expected in H2 2022.

By the end of 2022, the Company is expected to have 690 MW of operational capacity as West Didsbury (50MW), and Penwortham (50MW) commission, resulting in a 62% increase in o perational c apacity from the half-year stage.

Planning and EPC agreements for the project extensions on the assets previously contracted in EFR (Glassenbury, Cleator, Tynemouth, Port of Tyne and Nevendon) have progressed well and planned outages are expected around the end of the year. Batteries for these project extensions are also ordered. Large total battery orders from the Fund in the last 12 months have resulted in favourable pricing from our suppliers considering the underlying increase in raw material costs . This is a good example of how the Fund is able to benefit from its scale.

In addition to the portfolio and pipeline shown in tables 1 and 2 below, there is a large yet-to-be-announced pipeline of projects at various stages of negotiations and/or development both in the UK and overseas. Further updates on this incremental pipeline will be announced in due course.

As at 30 June 2022 , the valuation of the portfolio was GBP 565 mn (FY 2021: GBP389mn, HY 2021: GBP 323mn), a 45% increase since the beginning of the year. The valuation primarily reflects 425MW in operational projects (FY21: 425MW), 487MW of assets in-construction (FY21: 150MW) and cash in hand. The assets in-construction are expected to commission within nine months of 30 June 2022. The MW capacity of projects valued above cost has increased by 337MW in the last six months, made up of the three acquired projects in the period (Elland, York and West Bradford totalling 187MW), plus Grendon 1 (50MW) and Melksham (100MW).

Table 1. Company portfolio

                                                      Battery    Battery                     Status 
 Map     Asset                             Capacity     size     duration                    on 30        Ownership 
  Ref.    Name           Location            (MW)      (MWh)      (hrs)     Site type*       June 2022     % 
        ==============  ================  =========  ========  ==========  ==============  ============ 
                                                                            Battery and 
     1   Staunch         Staffordshire        20        2.9       0.20       0.5MW import   Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
                                                                            Battery and 
     2   Rufford         Nottinghamshire      7         9.5       1.35       symmetrical    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
     3   Lockleaze       Bristol              15       22.1       1.45       symmetrical    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
     4   Littlebrook     Kent                 8         6.3       0.80       symmetrical    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
                                                                            Battery and 
     5   Roundponds      Wiltshire            20       25.8       1.30       16MW import    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
                         West                                               Battery, 
     6   Wolves           Midlands            5         7.8       1.55       symmetrical    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
     7   Glassenbury     Kent                 40       28.2*      0.70       symmetrical    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
     8   Cleator         Cumbria              10       7.1*       0.70       symmetrical    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
     9   Red Scar        Lancashire           49       74.3       1.50       symmetrical    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
                         West                                               Battery, 
    10   Bloxwich         Midlands            41       46.6       1.15       symmetrical    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
                         South                                              Battery, 
    11   Thurcroft        Yorkshire           50       75.0       1.50       symmetrical    Operational   100% 
        ==============  ================  =========  ========  ==========  ==============  ============ 
    12   Wickham         Suffolk              50       74.0       1.50       40MW import    Operational   100% 
                          and                                               Battery, 
    13   Tynemouth        Wear                25       17.4*      0.70       symmetrical    Operational   100% 
         Glassenbury                                                        Battery, 
    14    Ext.           Kent                 10       10.1       1.00       symmetrical    Operational   100% 
    15   Nevendon        Basildon            10*       7.1*       0.70       symmetrical    Operational   100% 
         Port of          and                                               Battery, 
    16    Tyne            Wear                35       28.0*      0.80       symmetrical    Operational   100% 
         Byers           West                                               Battery, 
    17    Brae            Lothian             30       30.5       1.00       symmetrical    Operational   100% 
         Total operational                   425        473       1.14 
                                                                            Battery,         COD: Q3 
    18   Enderby         Leicester            50       50.0       1.00       symmetrical     2022         100% 
                                                                            Battery,         COD: Q4 
    19   West Didsbury   Manchester           50       50.0       1.00       symmetrical     2022         100% 
                                                                            Battery,         COD: Q1 
    20   Melksham        Wiltshire           100       100.0      1.00       symmetrical     2023         100% 
         Coupar                                                             Battery,         COD: Q3 
    21    Angus          Scotland             40       40.0       1.00       symmetrical     2022         100%** 
                                                                            Battery,         COD: Q3 
    22   Arbroath        Scotland             35       35.0       1.00       symmetrical     2022         100%** 
                                                                            Battery,         COD: Q4 
    23   Penwortham      Preston              50       50.0       1.00       symmetrical     2022         100% 
                                                                            Battery,         COD: Q1 
    24   Grendon***      Northampton         100       200.0      2.00       symmetrical     2023***      100% 
                                                                            Battery,         COD: Q1 
    25   York            York                 50       75.0       1.50       symmetrical     2023         100% 
         Bradford        West                                               Battery,         COD: Q1 
    26    West            Yorkshire           87       174.0      2.00       symmetrical     2023         100% 
                         West                                               Battery,         COD: Q1 
    27   Elland           Yorkshire           50       100.0      2.00       symmetrical     2023         100% 
                         North                                              Battery,         COD: Q3 
    28   Stairfoot        Yorkshire           40        40        1.00       symmetrical     2022         100%** 
        ==============                                                                     ============ 
         Total portfolio 
          owned by the 
          Company                          1,077       1,387      1.29 
        ================================  =========  ========  ========== 

* Current size prior to increases expected from the planned upgrades

** Acquired subject to satisfaction of conditions

*** The commissioning date reflects the 50MW Grendon 1 project, a further 50MW known as Grendon 2 is expected to begin construction shortly with a commissioning date in H2 2023. Only 50MW for Grendon 1 is included in valuations at this stage.

Table 2. Pipeline summary

                                                 Battery                             Commissioning/ 
 Map     Asset                        Capacity     size    Duration   Site            Completion      Ownership 
  Ref.    Name      Location            (MW)      (MWh)     (hrs)      type           status           % 
        =========  ================  =========  ========  =========  =============  =============== 
         Elland                                                       Battery,       Target COD: 
    29    2         West Yorkshire      100       200.0      2.00      symmetrical    Q3 2023         100% 
        =========  ================  =========  ========             =============  ===============  ========== 
         Monet's                                                      Battery,       Target COD: 
    30    Garden    North Yorkshire      50       50.0       1.00      symmetrical    Q4 2023         100% 
        =========  ================  =========  ========             =============  ===============  ========== 
         Lister                                                       Battery,       Target COD: 
    31    Drive     Merseyside           50       50.0       1.00      symmetrical    Q4 2023         100% 
        =========  ================  =========  ========             =============  ===============  ========== 
         Bradford                                                     Battery,       Target COD: 
    32    West 2    West Yorkshire      100       200.0      2.00      symmetrical    H2 2023         100% 
        =========  ================  =========  ========             =============  ===============  ========== 
                    Rep. of                                           Battery,       Target COD: 
    33   Monvalet    Ireland            180       180.0      1.00      symmetrical    H1 2024         100% 
        =========  ================  =========  ========             =============  ===============  ========== 
         Shilton                                                      Battery,       Target COD: 
    34    Lane      Scotland             40       40.0       1.00      symmetrical    H1 2024         100% 
        =========  ================  =========  ========             =============  ===============  ========== 
         Total pipeline not 
          owned by the Company          520        720       1.38 
        ===========================  =========  ========  ========= 
         Total portfolio 
          and pipeline:                1,597      2,107      1.32 
        ===========================  =========  ========  ========= 

Fund performance

The first half of 2022 has been another exceptional period for the Company's investments as they continued to benefit from high pricing in Frequency Response services driven by National Grid's demand for these services continuing to exceed the supply (in MW) of BESS capacity.

This has enabled the portfolio to achieve record cash generation and Operational Dividend Cover of 1.18x [10] .

In May 2022, the Company raised GBP150mn in equity to fund new projects moving into construction. The placing was significantly oversubscribed but the Company exercised capital discipline by not accepting more funds than currently required. This placing , together with the available debt facility (GBP180mn plus up to GBP200mn in an uncommitted accordion facility ), will now provide the capital for the majority of the existing pipeline shown in Table 2 above.

The Company's share price has continued to outperform equity markets with the Share Price Total Return for the six months to 30 June 2022 reaching 23.3% compared with -4.6% for the FTSE All Share Index, supported by the historic and anticipated NAV growth as pipeline sites are acquired and commissioned.

NAV per share growth in the first half of 2022 was 24.2% to 145.11p (FY 2021: 116.86p) and was itself largely driven by the revaluation of in-construction assets previously held at cost, as well as strong cash generation from operational assets. We continue to focus on accretive acquisitions with returns above the weighted average discount rate to drive future shareholder value creation via NAV Total Return.

With the growth in NAV, AIFM fees are reducing as a percentage of NAV due to the tiered fee structure (fees on incremental NAVare lower above certain thresholds) helping to keep costs down . Annualised ongoing charges in the period were 1. 16 % based on the weighted average NAV for the six months to 30 June 2022 (FY 2021: 1.23%, FY 2020: 1.26%), which is among the lowest compared to other listed funds in the market.

Portfolio performance

The portfolio continued to deliver exceptional returns in H1 2022, following a strong year in 2021. Revenue from underlying assets for the period was GBP30.1mn , up 20.6% on H1 2021 (GBP24.9mn) and up 13.6% versus H2 2021 (GBP26.5mn). EBITDA from underlying assets was GBP22.7mn (H1 2021: GBP22.4mn, FY 2021: GBP42.5mn)

Revenues have remained high on the back of high Frequency Response service pricing due to the continued undersupply of MW capacity delivering Dynamic Containment (DC) during the period, compared with the amount procured by National Grid ESO. We expect Frequency Response pricing to begin to drop in the second half of the year as additional BESS capacity becomes operational - see the Market update section for further details.

Frequency Response services

In total, Frequency Response (FFR, EFR, DC, DM and DR) made up 88.6% of total revenues with DC contributing over half of the revenues at 52.8% of total revenues (2021: 59.6%).

The contribution from EFR fell during the period due to assets coming to the end of their contracts, with only Port of Tyne remaining in EFR at the period end and this contract came to an end in July. Each of the former EFR assets (Glassenbury, Cleator, Tynemouth, Nevendon and Port of Tyne) have now moved into the available services with DC and Firm Frequency Response (FFR) being the focus, delivering an uplift in revenue per MW for the portfolio. These assets will undergo a duration extension to allow them to be better equipped for the trading environment that the sector is moving towards.

Due to the growth in UK BESS capacity and limited overall Frequency Response requirement from National Grid, we had expected that the market would reach oversupply during the first half of 2022. However, delays to construction across the sector and higher demand than forecast have meant this anticipated saturation has not yet occurred but is naturally expected to happen soon as projects do commission.

The Manager has also made the most of relative opportunities in FFR and DC (the two largest end market in Frequency Response), maintaining a greater exposure to FFR in H1 2022 (26.2% of revenues) than in H1 2021 (3.9%), as it has offered better returns.

The higher procurement by National Grid ESO of DC, in particular over the spring/summer versus their own forecasts has meant saturation has been delayed and pricing has therefore remained high during the period. The Manager is particularly pleased to have been able to maximise upside by being in the DC service at times of peak pricing only and generating better revenues in FFR and trading the remainder of the time.

Also supporting strong DC revenues at peak times was a further change in National Grid ESO's pricing and procurement methodology for DC in April 2022 (following the change to 4-hourly contracts in Q4 2021) in allowing for higher price caps in DC (previously limited at GBP17/MWh) which then led to increased pricing volatility and higher peak prices.

This higher pricing manifested most impressively in June 2022 when National Grid ESO required significantly higher volume than planned, translating into over GBP7mn of revenues for the month for the underlying portfolio , as shown in the chart on page 8 . High prices have continued through July and into August; however, we are now seeing more periods of low DC prices. Based on current project commissioning timelines we are anticipating significantly higher o perational c apacity by the end of the year which will drive more market saturation and our transition to trading as this begins to offer better returns .

Capacity Market (CM) contracts

As announced on 28 February 2022, the portfolio secured a significant volume of record high-priced CM contracts in the auction held in February 2022. Initial expectations for these contracts were for them to add over GBP108mn of revenue over the life of the assets. As these contracts are CPI linked for 15 years, this amount is now likely to be much higher given recent inflation figures. The first of these contracts to start will be 112MW of 1-year contracts starting October 2022 which cleared at GBP75,000 per MW, driving a further source of additional revenues in H2 2022.

Cost focus

In addition to maximising revenues, we have been focused on cost savings throughout the construction and operational phases of these assets. The size of the Gresham House team has grown significantly over the past 12 months as we look to bring more resource for key functions from transaction execution, asset management, operations and maintenance and project delivery in particular.

The limited pool of insurers to date has meant insurance for projects remains relatively expensive across the sector. To combat this, we have been implementing additional safety measures across our sites where possible and are working with insurers to cover off areas of perceived risk. The work is also feeding into site design for new assets to ensure reduced risk and lower insurance premiums. We are hopeful of reducing rates as the latest safety measures can be demonstrated to reduce risk to insurers.

Market update

The following section provides insights from the Manager on the recent performance and outlook for the end markets the Fund participates in, rather than a report on its own performance.

   i)          Frequency Response services 

Frequency Response has been dominated by Dynamic Containment since its launch in October 2020; however, additional services have been launched during 2022 completing the suite of services known as Dynamic Frequency Response services first anticipated in National Grid ESO SNAPS plans established in 2017.

These services consist of Dynamic Containment (DC), Dynamic Moderation (DM) and Dynamic Regulation (DR), each of which provides a different power response for a given frequency deviation - see the RH chart. Each of these services is now procured separately for Low (export) and High (import) - each type of service is therefore further denoted by an L or H respectively after the service name.

DCL was the first to launch in October 2020 with DCH arriving in November 2021, DRH and DRL began in April 2022 with DMH and DML completing the set in May 2022. It is expected that Firm Frequency Response (FFR) will eventually be phased out, most likely in early 2023.

Each of the new services has different operating parameters resulting in a different level of battery cycling. DC is the least onerous and DR the most . L onger duration batte ries benefit further as they are less stressed in this service . DR actually has a longer duration design requirement due to the high level of cycling required of the batteries and as such is not feasible for <1 hour BESS. Due to the relatively low volume requirement from National Grid ESO for DM and DR to date (each c.10% of DC) DC has remained the primary service of interest.

D emand has been greatest in DCL . The higher requirement for the Low service reflects the fact that the primary need from National Grid ESO is on the export side i.e. for protection from " loss of load " such as the unplanned outage of a generator at which time the frequency collapses if not mitigated .

The DCL service has evolved in three key phases since launch in October 2020 (as depicted in the charts below) . The first of these represented the initial design of the service, procured in 24 hour blocks day ahead with a price ca p of c.GBP17/MWh and flat volume requirement of 1,100MW each day. During this time, the market participants all enjoyed consistent revenues at GBP17/MWh due to the market being undersaturated.

Phase 2 began in November 2021 when procurement was changed to 4-hourly blocks (EFA blocks) on a day ahead basis. Along with this came varied intraday volume requirements by EFA blocks. This drove greater volatility in DC revenues with volume requirements generally falling in many EFA blocks leaving some periods saturated, even clearing at GBP0/MWh in some instances where no volume was required. This also brought greater upside with price caps in some periods moving up to GBP48/MWh. These changes generally resulted in marginally lower average pricing than in Phase 1 but if combined successfully with FFR, it could lead to an increase in revenues overall as we prove d in February 2022 when the portfolio had a new record month.

Phase 3 began in April 2022 when National Grid ESO announced procurement of MWs against a continually changing "buy curve", driven by volume requirements from National Grid ESO's modelling. The result of this was to add volatility of price caps (now changing dependent on volume available) alongside the previously added procurement volume volatility. This period saw National Grid ESO's DCL volume requirements begin to increase as the UK headed towards spring and summer and, with it, higher solar renewable generation. Higher solar generation results in less gas generation which makes frequency prone to dropping more quickly if a power station comes offline unexpectedly, hence requiring more batteries to respond.

The net result of all the above is a much more merchant Frequency Response market. Prices have been able to reach >GBP100/MWh during this phase, and on occasion have also fallen as low as GBP0.5/MWh. The increased volatility can be seen by the frequency and magnitude of the spikes occurring from April 2022 in the charts. Through the six months to June 2022, overall National Grid ESO has procured higher volumes in DC than forecast at the start of the year, and this allowed pricing to remain extremely high on most days as the service remained undersaturated for longer despite a growing number of MWs competing for the service.

The Manager analyses " headroom ", the difference between maximum volume required versus volume actually procured, as the best indicator for how close to saturation the market is. This data is from National Grid ESO. In June 2022, headroom was 122MW in DCL with EFA 5 highest at 254MW. This has fallen in July 2022 to 72MW on average, with EFA 5 highest at 138MW of headroom.

As more BESS projects commission across the industry, the headroom will continue to shrink until it is disappears and the market is oversubscribed the majority of the time. The Fund's own pipeline is likely to cause this market to become oversubscribed in 2022 given the volumes set to commission.

Once the DC market is saturated, contract prices will be influenced by the next best revenue opportunity which is likely to be trading i.e. batteries will step away from offering DC and just trade once pricing falls .

This will support DC prices as supply comes out but alternative revenues from trading will primarily vary with battery duration. Longer duration assets can generate much greater revenues from trading . For example , a half hour battery looking to trade may need to position itself at half its MW-capacity to emulate a 1-hour battery, to overcome potential overheating when operating as a 30 minute battery, limiting its trading revenues materially.

As we get closer to the point of saturation in Frequency Response markets, we will begin to see greater emphasis on trading either through setting of Frequency Response prices or by moving to trading in the wholesale market and Balancing Market (BM) instead . This is why understanding, and being ready for trading, is key to any investment .

   ii)         Trading/Merchant markets 

Despite the limited exposure to trading from the portfolio in the period, due to the focus being on high Frequency Response, there have been continuing developments which have contributed to a strengthening trading environment for BESS.

Gas prices reached record levels in December 2021, on the back of high demand, low storage levels and fears around disruptions of Russian gas supplies before Russia invaded Ukraine in February 2022. After the invasion gas prices rose further reaching a record high.

Gas prices have remain ed high and are having a direct impact on electricity prices and volatility, with the price of gas generation often setting the electricity price - a topic capturing the public's and politicians' attention due to high cost of electricity, as t he uncertainty of gas supply across Europe remains.

In the longer term we expect for this to return to more 'normal' levels as higher levels of renewables and alternative supplies bring supply and demand back into balance at lower price levels, but in the short term we may experience more extreme pricing, particularly over the winter during higher demand periods.

This, in part, has led the UK Government to launch the Review of Electricity Market Arrangements (REMA) looking to reduce the cost of electricity to consumers, with further information provided later in this report. The wider political response to the rising gas costs has been to focus efforts on the rollout of renewable energy which supports the case for increased demand for BESS.

However, while BESS is a much cheaper alternative power to fossil fuel generation in providing flexibility to manage intermittency, there is simply insufficient BESS capacity to manage current levels of renewable generation and so to meaningfully reduce our reliance on gas . It is therefore likely that, no matter where gas prices head, volatility from renewable generation will continue.

Availability of Russian gas across Europe has driven concerns over energy security, particularly looking forward to the winter. To make matters worse, France has an increasingly unreliable Nuclear fleet. Given the reliance on Nuclear in France the loss of generation has led to the need to import power from other countries. This resulted in April 2022 being the first month of net export through interconnectors in Great Britain (GB) since 2017. Average interconnector imports in GB were 2.9GW in February 2022 and have since fallen to 2.5GW export in June 2022 effectively creating a c.5GW additional demand requirement to be covered by National Grid ESO.

The combination of high gas prices with increased demand has led to high peak energy prices, whilst high renewable output through the summer has also created negative prices at times, resulting in much greater daily energy price spreads than typically seen during a summer.

The system price chart demonstrates the growing spread between low and high prices with the current spreads in July and August 2022 significantly above previous norms for that time of year and more aligned with the high winter volatility we have seen in the last two winters.

All taken together this presents a favourable trading environment for BESS assets. As system demand increases, and as we head closer to winter, the current market drivers of gas prices and interconnector exports are likely to open up the potential for extreme pricing on particularly high demand days. With prices for Frequency Response services (ignoring any uplift from trading opportunity) expected to begin falling, trading is likely to become the main area of focus for the portfolio.

   iii)        International markets 

Consistent with the investment methodology used for UK and Ireland assets, the core focus for international investments will be on the evaluation of each market's underlying wholesale market dynamics. We will also be looking for markets with high renewable penetration and/or growth with present or expected wholesale volatility which offers returns in line with stated ranges. Any ancillary services, subsidies or ' locational ' opportunities at different locations within any given market will be treated as an additional but short-term benefit, aligning how we think about investments abroad with how we think about them in the UK .

Our team are working hard to evaluate new opportunities overseas and review the available markets to focus on the right areas for investment. There are a number of deals in progress already and we hope to notify shareholders in due course of additional pipeline sites to be added. The scale of opportunity overseas is significantly bigger than the UK market and whilst we remain committed to investment in the UK, and indeed have a considerable pipeline of assets in the UK already, now is the right time to be looking for opportunities to enter international markets , relatively early , in the same way we did in the UK.

Construction update

The Manager has experienced challenges energising new BESS projects, in common with other BESS players . A summary of the most significant issues and their current status is shown below:

   i)          High overall demand for renewables and BESS: Impact is ongoing 

There continues to be huge demand for new projects as a function of the investment appetite of both institutional investors and major corporations (such as the oil majors who are increasingly involved). In the context of BESS, this is creating tight supply chains for inverters, lithium-ion batteries and other electrical components as well as longer lead times. This means contractors are worried about potential higher prices during construction and are increasing their " risk" margins (essentially charging a higher profit margin to protect against unexpected cost increases). Our key mitigation is scale which ensures we have access to equipment and a stronger negotiating position than our competitors which allows us to manage price increases. We are also increasingly procuring components directly , which reduces the impact of "margins being charged on margins" by contractors.

   ii)         General inflation and weakening sterling : Impact is ongoing 

Higher general inflation and a weak pound is leading to higher labour costs and costs of components sourced abroad. This is also driving higher 'risk' margins from suppliers. Here, our mitigation is to increasingly source works on an EPCm basis to split out costs in controllable and transparent work packages and proactively manage each of these to minimise risks.

   iii)        Commodity prices :  Negative impact turning positive 

While we have yet to see significant benefits from this, various commodities and other costs have fallen sharply in recent months. This includes prices for iron-based products, concrete and copper as well as shipping costs. Debottlenecking of ports, all time high investment in new containers and other shipping and a sharp slowdown in China's housing market are likely to be among the drivers.

   iv)        Grid connection challenges : Impact is ongoing 

The large number of new grid connections is creating challenges for the grid companies which feeds into our portfolio projects. Capacity is now tight and therefore new capacity has to wait for reinforcements elsewhere in the network. This does not affect projects already in construction as the ability of a new project to connect is studied carefully before a grid connection offer is made.

The challenge for projects in construction is more practically linked to a lack of adequately experienced engineers at the Distribution Network Operators (DNOs) and in all likelihood impacting National Grid as well. Mitigation here is challenging: engaging positively with the counterparty on the one hand or making complaints (including to Ofgem) are limited remedies for late construction programmes . Further, regulations do not help much : DNOs and National Grid have next to no liability for delays to connections and have a huge amount of time to turn around grid connection offers (pre-construction) or design submissions (during construction). This, combined with the intrinsically intricate nature of the work, the need for safety and a workforce which has retired many of their best staffers and recruited too few over the COVID -19 lockdowns is leaving the industry in a challenging position. Fortunately, some pragmatism is rising to the surface unlocking some delays.

We are factoring in these delays, which are affecting all participants in the market, into new construction programmes and are hopeful that further significant delays at most projects can be avoided.

The Manager does have two key mitigants but as these are commercially sensitive, they cannot be disclosed here.

Valuations and NAV

NAV per share [11] has risen from 116.86p on 31 December 2021 to 145.11p on 30 June 2022. This equates to a NAV Total Return of 27.2% over the last six month interim period.

The largest contribution to NAV growth came from the revaluation of projects previously held at cost, representing GBP61.2mn (FY 2021: GBP38.0mn) or 12.12p per share gain. The portfolio valued on a Discounted Cash Flow ( DCF) basis consists of 425MW of operational projects as per Table 1 on page 6 and 487MW of in-construction assets. 115MW of projects are held at cost, these projects are under construction with Share Purchase Agreements signed but with completion subject to Provisional Acceptance Certificate issuance. These projects are Coupar Angus (40MW), Arbroath (35MW) and Stairfoot (40MW) with the latter two being operational and Coupar Angus expected to commission very shortly .

The value of the new CM contracts awarded to the Company's projects in the February 2022 auction has also benefited the NAV with a 6.68p per share (GBP30.6mn) contribution during H1 2022. The remaining uplift from the new CM contracts will come through the revaluation of remaining assets in H2 and once the construction premium is removed from discount rates when assets become operational.

Net issuance from equity raised above NAV in May 2022 contributed 2.32p per share to NAV, whilst working capital after deduction of fund costs, transaction costs, debt costs and dividends paid added 0.10p per share to valuations.

Third party revenue forecasts increased substantially in the period following relatively low forecasts at the year-end (which reflected the expectation that DC prices would fall to very low levels). The latest curves reflect the current market conditions of high DC prices on the back of higher volume procurement from the ESO as well as greater trading opportunities heading into the next winter. These therefore provide a short-term uplift in revenues forecasted, whereas the longer term projections remain consistent with previous quarters. The total impact of third party revenue forecast changes in the period was GBP30.9mn or 6.06p per share.

There have been no changes to the discount rate methodology in the period . The weighted average discount rate is 10.79% for the portfolio (December 2021: 10.77%). The w eighted average discount rate for operational assets was 10.55% (2021: 10.57%) whilst in-construction assets had a weighted average discount rate of 11.00% (2021: 11.35%) having fallen due to the addition of CM revenues to the model.

The main assumption changes for valuations came from updating the inflation rates, with a short-term increase in inflation to 7.5% in 2022, 4.5% in 2023 and falling to 2.5% from 2025. The impact of the update was an increase in valuations of 3.88p per share. We believe our current inflation assumptions are conservative. We will continue to monitor developments in the UK and potentially revisit inflation assumptions ahead of the year end. An increase in inflation rates is expected to increase valuations further.

Valuations by asset can be found in the notes to the financial statements in Note 9 with sensitivities performed on the discounted cash flow modelling for the portfolio shown in Note 15.

Regulatory update

On 18 July 2022 we saw the release of two significant energy market reports, the first being the launch of the government's Review of Electricity Market Arrangements (REMA) and the second being National Grid's Future Energy Scenarios (FES) Report for 2022.

REMA is a major review into the GB electricity market design with the aim to ensure cost benefits to customers in the long term. There are several proposals being considered in the review with the key areas of focus for BESS being:

-- Wholesale Markets: first, the introduction of Locational Marginal Pricing (LMP) or 'Nodal' pricing; second, the potential decoupling of the cost of electricity from fossil fuels; and third, changes to the design of the Balancing Mechanism

-- Reforms to the Capacity Market to support low-carbon, flexible technologies which contribute to energy security

-- Review of Contracts for Difference (CfD) and how to incentivise the deployment of renewable generation

REMA is likely to take several years to be fully completed. The deadline for consultation submissions is 10 October 2022 and we are in communication with the relevant parties to get further clarity and feedback on the proposals including ongoing conversations with National Grid ESO on more specific topics coming from REMA.

Given that the build - out of cheap renewables and batteries is a key target for the UK Government and National Grid ESO, and the acknowledgement for the need to encourage more low carbon flexibility to cope with this, we anticipate the net impact of changes to be neutral to positive for the BESS industry. The move to Nodal pricing (which will in any case be at least five years) may present opportunities for greater locational volatility and pricing opportunities for well positioned assets and any changes to CM auctions aimed to encourage BESS, should also be positive.

The Future Energy Scenarios (FES) report for 2022 released by National Grid ESO, was released in tandem with the REMA report. FES 2022 aimed to provide a roadmap for decarbonising energy usage in GB. In each scenario there is a heavy reliance on the further rollout of renewable generation. In all scenarios the ESO significantly increased the amount of storage they expect to see and how early it is deployed. BESS is expected to become the largest share of storage capacity in all scenarios by 2050. The ESO forecasts growth in BESS requirements from 1.6GW in 2021 to 20GW in 2030 and 35GW by 2050 under their 'Leading the way ' scenario. In addition to this they also note the need for policy, regulatory and market environments to change for storage assets in order to bring forward the levels of energy storage expected to be needed on the system with particular consideration for developing revenue streams and stacking of services to support business cases for storage projects.


Through the remainder of 2022 the core focus of the Manager is to increase the operational capacity and revenue potential of the portfolio by commissioning projects due , with the Company targeting 690 MW operational capacity in the portfolio by the year end and over 1GW of operational capacity by the end of H 1 2023.

This growing operational portfolio should ensure greater cash generation and support Operational Dividend Cover. We anticipate Operational Dividend Cover to increase progressively in line with projects commissioning and expect full Operational Dividend Cover for the year. Dividend levels will continue to be monitored against the level of Operational Dividend Cover.

NAV growth is expected to continue through the end of the year driven largely by revaluation of projects with Coupar Angus, Arbroath and Stairfoot in particular set to be revalued later in the year once they are operational and fully acquired.

As assets under construction commission, and others in the market also come online, we expect to see the remaining headroom for DC disappear, leading to falling Frequency Response service pricing. This should see longer duration assets focus increasingly on the trading potential available to them. The coming winter may see even greater volatility than in previous years, offering significant trading upside from those assets able to trade. We look forward to seeing our portfolio demonstrate their capabilities in this increasingly merchant environment.

The upcoming upgrades to our previous EFR portfolio will increase the duration of these legacy assets allowing them to trade more freely alongside the remainder of our portfolio and ensuring they are capable of earning the revenue opportunity expected over the short to medium term.

The GB electricity market is likely to experience large scale changes over the medium to long term as plans from REMA begin to be put in place. Overall, we believe the UK Government and the ESO remain supportive of BESS and we look forward to ongoing engagement with them to ensure the full benefit of BESS can be felt by the market and by consumers. We remain confident in the opportunity for BESS in the UK markets and are excited by further opportunities open to the Company overseas following the change to the investment policy during the period.

We are seeing comparable market drivers in numerous overseas markets presenting expectations for growing volatility in merchant markets and a solid revenue base. We remain committed to the investment thesis of the fund and hope to have further information on overseas projects in due course. We continue to develop the expertise and size of the team to appropriately match the opportunities ahead.

   4.    GRID 2022 Interim Report - Sustainability Report 

In the 2021 Annual Report and Accounts the Sustainability Report detailed the Company's approach to Sustainability including its focus areas. Having reported on 2021 achievements, the report also pointed to our "Future Objectives" which span the period 2022-2025. The aim of this Sustainability Report is to update our shareholders on the Company's progress on these Future Objectives, listed below as "Objectives" as follows.

   1.   Commitment to sustainability (Environment) 


Continue to increase capacity under management to increase GRID's contribution to the decarbonisation of the UK's electricity network and a reliable, low-cost energy system.

Update : This is reported on extensively in this Interim Report. In alignment with the Fund's commercial aims, the Manager remains fully focused on growing grid-connected MW and MWh capacity to make a valuable contribution to Net Zero and related goals.

   2.   Supply chain management (Social) 


a. Update the Supply Chain Policy to fully reflect best practice in the market and the commitments of the Investment Manager.

b. Have a comprehensive supply chain monitoring and management process in place to assess ESG risks in the supply chain and to ensure the compliance of suppliers with the Supply Chain Policy.

c. Include sustainability criteria into supplier contract renewal and supplier selection decisions.

d. Engage with key suppliers to enhance their sustainability processes and reduce the Fund's ESG risk exposure.

Update : The Manager is awaiting the completion of an audit of the BESS supply chain, from raw material production to the final product, commissioned earlier this year which is due in Q4. This will inform the actions required for each of the objectives listed above.

   3.   Marketplace responsibility: processes, policies and education (Governance) 


a. Assess all assets against our Sustainable Infrastructure Framework using the ESG Decision Tool and establish plans to rectify any material risks to create and protect value for shareholders.

b. Ensure the ESG Decision Tool remains up to date to reflect any enhancements to the sustainable investment processes and sustainability related policies.

c. Finalise ESG KPIs to monitor and measure sustainability performance of the Fund and report these regularly to stakeholders.

Update : These Objectives are ongoing. There is no significant change to report on this occasion. The ESG tool continues to be a valuable tool to focus the Manager on ESG topics.

   4.   Climate change and pollution (Environment) 


   a.   Report annual carbon footprint to stakeholders. 
   b.   Set targets and actions to reduce operational carbon emissions. 
   c.   Apply full TCFD guidance and report in line with recommendations. 

Update : The 2022 Annual Report will report against TCFD and the Manager, Board and our auditors are all preparing for this.

The Manager is also taking active steps to measure energy losses, through on-site energy consumption or losses through heat as the BESS charges and discharges. The Manager is considering alternative designs to reduce such inefficiencies on future sites. As with Objective 1, there is complete alignment between commercial, operational and ESG goals on the subject of carbon emissions.

   5.   Governance & ethics: engaged and active ownership (Governance) 


a. Identify and work with key industry bodies to drive positive industry outcomes linked to sustainability topics.

   b.   Track and report on engagement activities and key outcomes. 

c. Increase community engagement, where applicable, continuing to educate the public on the role of BESS in the UK's decarbonisation ambitions.

   d.   Solicit, where practical, feedback from key stakeholders who are in a position to contribute. 

Update : The Manager is working with industry bodies as well as key industry stakeholders to communicate on various topics. At the top of the agenda at the moment is the Reform of Electricity Market Arrangements, a consultation launched by the Department for Business, Energy and Industrial Strategy (BEIS). This consultation aims to address the challenges the electricity system faces as the energy transition progresses, as well as exploring various ways of addressing the 'cost of living crisis'. Consultation responses are due in October and the Manager is involved in submitting a set of responses.

In the last period we have also shared a questionnaire with our largest shareholders to identify their own priorities, so that in addition to complying with all reporting standards, we also take on board our investors' insights.

   6.   Natural capital (Environment) 


   a.   Measure and report on key natural capital impacts and dependencies. 

b. Enhance policies and processes to reduce, restore and enhance biodiversity and other key ecosystem services at asset sites.

Update : The Manager is monitoring developments following passing of the Environment Act which will require all developments to create a biodiversity 'net gain' (currently expected from Q4 2022).

   7.   Waste management (Environment) 


a. Work with contractors to incorporate full lifecycle analysis into BESS design to maximise asset life, reduce the overall carbon footprint of constructing and operating projects, and consider end-of-life use to reduce negative environmental and social impacts of battery production and the battery components including raw materials.

   b.   Engage with contractors/suppliers on their end-of-life process development and technology. 

Update : The Manager is working to fully understand the responsibilities resting with the importer of the batteries, whose obligation it is to recycle batteries at the end of their life. Due to how the construction of the projects has been contracted, this has generally fallen on the EPC contractor. Nevertheless, the Manager is working to understand these obligations too, in order to understand any indirect impacts on the Fund, as well as the implications of being the importer going forward.

5. Principal Risks and Uncertainties

Risk management approach

The Company continues to recognise that effective risk management is critical to enable it to meet its strategic objectives. The Company has a clear framework for identifying and managing risk, at both an operational and strategic level. Its risk identification and mitigation processes have been designed to respond to the changing environment in which it operates. The impact of emerging risks on the Company's business model are also considered and used to make informed decisions, including as to the delivery and evolution of the Company's strategy. The table below captures those risks that would have the most significant adverse impact on the Company (and the underlying investments), based on their impact and/or likelihood.

Existing risks

 Risk area             Gross impact               Mitigation                      Net impact 
 Availability          Inability of the           The Company's investments       This will remain 
  of batteries          Company to deploy          are within SPVs and             an issue in the 
  and other critical    capital raised             these are subject               future, although 
  components.           into investments           to a battery order              the size and scale 
                        due to incomplete          with a Tier 1 supplier          of the Company 
  Residual risk:        or lengthening             which has been secured.         provides the ability 
  high                  project timescales.        Due to the size of              to secure key 
  (2021 FY: N/A)                                   this order, advantageous        components. 
                        Price increases            terms have been secured. 
                        for components 
                        making investments 
                        less attractive 
                      -------------------------  ------------------------------  --------------------------- 
 Emerging business     Adverse changes            The Company's investments       Battery energy 
  model and impact      by National Grid           enjoy several different         storage is a versatile 
  on revenue            in relation to             income streams ranging          asset, and it 
  streams sourced       services contracted        from BM, Capacity               can perform a 
  from National         by them may reduce         Payments, FFR, TRIADs,          variety of roles 
  Grid mechanisms.      the size/scope             and DC as contracted            to manage risk. 
                        of income earning          services to National 
  Residual risk:        opportunities              Grid; the Company's             There is also 
  medium                to the Company's           investments are able            the potential 
  (2021 FY: high)       investments and            to change which income          to "revenue stack" 
                        potential impact           streams are contracted          and gain multiple 
                        on valuation.              and ascertain the               revenue streams 
                                                   most advantageous               from different 
                        HM Government              on any given time               services. 
                        Energy Strategy            period: this is continuously 
                        moves away from            monitored by the                The income stream 
                        intermittent renewable     Investment Manager              opportunities 
                        assets which impact        and optimisation                and usage of battery 
                        on future growth           partners.                       energy storage 
                        of the Company.                                            systems is expected 
                                                   Due to the progressive          to evolve over 
                                                   decommissioning of              time. 
                                                   other carbon intensive 
                                                   options available 
                                                   to National Grid 
                                                   for managing these 
                                                   services, and the 
                                                   need to support the 
                                                   security of this 
                                                   critical national 
                                                   infrastructure, BESS 
                                                   is expected to form 
                                                   an integral part 
                                                   of transforming the 
                                                   electricity sector 
                                                   in the UK. 
                      -------------------------  ------------------------------  --------------------------- 
 Environmental,        BESS are manufactured,     The supply for battery          Some aspects of 
  Social and            installed, and             manufacture relies              this are still 
  Governance:           operated with              on high quality global          evolving over 
  production            the intention              partners who ensure             time, especially 
  and recycling         of driving the             their supply chain              the end use/recycling 
  of batteries          transformation             does not involve                of BESS. 
  creates risk.         to a low carbon            the use of illegally 
                        energy supply              or unethically sourced          The ability of 
  Residual risk:        in the UK. However,        "rare earth" materials          the BESS market 
  medium                the lifecycle              or inadequate labour            to drive a low 
  (2021 FY: medium)     ESG impact of              standards. This could           carbon electricity 
                        the batteries              be mitigated by undertaking     system needs to 
                        needs to be considered     reviews of the supply           be considered 
                        and minimised.             chain.                          versus the other, 
                                                                                   mainly fossil 
                                                   The recycling of                fuelled, options 
                                                   the BESS systems                when considering 
                                                   is subject to constant          the overall ESG 
                                                   development and research;       impact of BESS. 
                                                   the importer of these           Work will continue 
                                                   batteries (not the              to minimise this 
                                                   Company or SPV companies)       over time. 
                                                   is responsible for 
                                                   their disposal, but 
                                                   the Company will 
                                                   facilitate this to 
                                                   ensure low environmental 
                      -------------------------  ------------------------------  --------------------------- 
 Valuation risk.       The Company's              The Company's investments       The Company utilises 
                        investments are            are impaired if income          a modelling methodology 
  Residual risk:        valued using discounted    streams are not as              which ensures 
  medium                cash flows and             profitable as expected          income streams 
  (2021 FY: medium)     assessment of              or costs are higher             are discounted 
                        future income              than expected.                  using appropriate 
                        streams: these                                             discount rates 
                        valuations may             Risk adjusted discount          dependent on the 
                        be materially              rates drive valuation           perceived risks. 
                        incorrect or not           along with the external 
                        held at fair value.        pricing curves.                 The weighted average 
                                                                                   discount rates 
                        The impact of                                              are reviewed regularly 
                        volatile inflation                                         and the Company 
                        and interest rates                                         believes the valuations 
                        may impact upon                                            are conservative. 
                        these valuations. 
                                                                                   A third-party 
                                                                                   valuer reviews 
                                                                                   valuations and 
                                                                                   confirms appropriateness. 
                      -------------------------  ------------------------------  --------------------------- 
 Operational           The BESS investments       The Company underwent           The Investment 
  and performance       do not perform             a programme of upgrades         Manager has substantial 
  risk in the           in the manner              to the seed assets              experience managing 
  underlying            expected (i.e.             to optimise these               BESS assets and 
  investments           degradation in             assets and has ensured          works with leading 
  leading to            performance) or            that the new assets             asset optimisers 
  loss of value.        are not optimised          being invested into             to ensure assets 
                        in the best commercial     are designed in a               are designed and 
  Residual risk:        manner to capture          flexible manner.                operated as expected. 
  low                   revenue streams            The battery duration 
  (2021 FY: low)        leading to reduction       for the new investments         Health and safety 
                        in valuations.             is also considered              performance is 
                                                   to ensure fullest               rigorously tested 
                        Performance within         flexibility for future          and reviewed. 
                        the SPVs may not           operation. 
                        meet planning 
                        or safety requirements     Design and commissioning 
                        and result in              testing takes place 
                        curtailment of             in each investment 
                        operations and             to ensure all relevant 
                        loss of investment         planning and HSE 
                        value.                     conditions are met. 
                                                   Fire risk, in particular, 
                        The portfolio              is carefully assessed 
                        relies on contracts        and sites are designed 
                        with suppliers             and operated to ensure 
                        to maintain certain        this risk is as low 
                        key equipment:             as practicable. 
                        these suppliers 
                        may fail to provide        Cyber security risk 
                        adequate support.          is managed via secure 
                                                   systems used by optimisation 
                                                   The portfolio has 
                                                   a number of alternative 
                                                   suppliers and optimisers 
                                                   to manage risk. 
                      -------------------------  ------------------------------  --------------------------- 
 Investment            The Company invests        The Company does                Limited exposure 
  in development        in projects via            not invest in speculative       to the Company 
  and construction      loans before and           project development.            due to careful 
  projects.             after the projects         Any investments in              vetting and management 
                        are owned by the           projects are carefully          of project development 
  Residual risk:        Company. There             assessed and vetted             activities and 
  low                   is a risk that             by the Investment               commercial arrangements 
  (2021 FY: low)        the project does           Manager: they will              with the Investment 
                        not complete,              have secured certain            Manager to manage 
                        and the Company            minimum requirements            construction risk. 
                        incurs financial           and are expected 
                        loss.                      to be ready to proceed          The Company is 
                                                   to construction in              usually investing 
                        The Company invests        a relatively short              in the advance 
                        in construction            timescale.                      purchase of equipment 
                        projects as part                                           which has inherent 
                        of its investment                                          value and can 
                        portfolio. There                                           be used on other 
                        is a risk of financial                                     projects if needed. 
                        loss or delay 
                        of revenue generation. 
                        Late delivery 
                        of plant items 
                        may lead to delay. 
                      -------------------------  ------------------------------  --------------------------- 
 Reliance on           The Company relies         The Company has long-term       The Investment 
  the Investment        on the Investment          contractual arrangements        Manager remains 
  Manager.              Manager as a key           in place with the               incentivised to 
                        supplier.                  Investment Manager,             continue to grow 
  Residual risk:                                   and the Investment              the Company and 
  medium                                           Manager has confirmed           drive value. 
  (2021 FY: low)                                   to the Company that 
                                                   the growth of the               The growth in 
                                                   Company is a key                scale and associated 
                                                   focus area of the               activity supplied 
                                                   Investment Manager.             by the Investment 
                                                                                   Manager will tend 
                                                                                   to increase this 
                      -------------------------  ------------------------------  --------------------------- 
 Financing risk.       Equity or debt             The Company does                Limited overall 
                        financing is not           not enter into unfunded         impact on deployment 
  Residual risk:        available and              commitments: all                of pipeline. 
  low                   the Company is             committed pipeline 
  (2021 FY: low)        unable to fund             can be funded from              As the Company's 
                        its pipeline of            existing equity finance         investments draw 
                        assets.                    or the existing debt            down more debt 
                                                   facility.                       this risk will 
                        The Company's                                              tend to increase. 
                        investments are            The banking covenants 
                        subject to banking         have been carefully             As debt is drawn 
                        covenants which            modelled by the Investment      the Company enters 
                        could be breached          Manager to ensure               into interest 
                        if the Company's           they are achievable.            rate hedging instruments 
                        investments do                                             to manage this 
                        not perform as                                             risk. 
                        Higher interest 
                        rates will increase 
                        the Company's 
                        cost of debt. 
                      -------------------------  ------------------------------  --------------------------- 
 Tax compliance.       The Company is             The Investment Manager          None. 
                        registered as              undertakes the relevant 
  Residual risk:        an Investment              tests each quarter 
  low                   Trust and must             and the Company's 
  (2021 FY: low)        comply with certain        tax advisers review 
                        tests.                     this regularly. 
                      -------------------------  ------------------------------  --------------------------- 

Emerging Risks

 Risk area             Gross impact            Mitigation                      Net impact 
 Emerging technology   The Company invests     The Company utilises             The Company will 
  replaces battery      in battery storage      proven technologies              also benefit from 
  energy storage        projects: a new         with associated Tier             lower costs and 
  assets.               or disruptive           1 supplier warranties            the valuation 
                        technology might        and performance guarantees.      model assumes 
  Residual risk:        adversely impact                                         continuing cost 
  low                   on the Company's        The Company continues            reductions for 
  (2021 FY: low)        investments.            to review available              replacement assets 
                                                technologies. It                 over time. 
                        Future income           is currently viewed 
                        streams may be          as unlikely that 
                        reduced if new          a completely new 
                        entrants have           reliable and cost 
                        significantly           competitive technology 
                        lower marginal          will appear during 
                        costs.                  the lifetime of these 
                                                batteries and impact 
                                                on the lifecycle 
                                                of these batteries. 
                      ----------------------  ------------------------------  --------------------- 
 Potential equipment   If China invades        The Company has relationships   The Company ensures 
  shortages if          Taiwan or takes         with other non-Chinese          it is securing 
  China is subject      other hostile           suppliers, but they             key equipment 
  to sanctions.         measures which          are likely to source            orders in advance. 
                        cause sanctions,        components from China. 
  Residual risk:        the supply chain 
  low                   of crucial equipment    The Company ensures 
  (2021 FY: low)        would be disrupted.     payments are protected 
                                                via Letters of Credit 
                                                to ensure no financial 
                      ----------------------  ------------------------------  --------------------- 

The Investment Team

Ben Guest (Managing Director, New Energy); Lead Manager of Gresham House Energy Storage Fund plc)

Ben was the founder and managing partner of Hazel Capital which was acquired by Gresham House in 2017. He has 28 years' of investment experience. Ben's expertise spans the investment spectrum, across infrastructure, public equities and venture capital. Today, Ben is Managing Director of Gresham House's New Energy division, and the Lead Manager of the Company. He is responsible for the origination and execution of investment opportunities and is responsible for the overall strategy and ongoing portfolio management of the Fund.

Ben started his fund management career at Lazard Asset Management in 1994 before going on to co-found Cantillon Capital and later founded Hazel Capital in 2007.

Ben currently serves as a Director of over 50, mostly project, companies.

Bozkurt Aydinoglu (Investment Director, New Energy)

Bozkurt joined Gresham House in 2017 as Investment Director having previously been at Hazel Capital and has 29 years' investment, advisory and businesses building experience.

Bozkurt's primary focus is on procurement, contracting, delivery and evaluation of new energy storage opportunities, in addition Bozkurt also manages the Gresham House New Energy VCTs containing a portfolio of solar and wind assets.

Bozkurt dedicated the early part of his career to funding and advising companies in the telecommunications and technology industries, whilst in roles at Nomura, Salomon Brothers, Bowman Capital and Deloitte & Touche.

In 2002, Bozkurt cofounded and built New Energy Finance (NEF), which became the leading provider of data, research and analysis to investors in the global cleantech industry.

Gareth Owen (Investment Director, New Energy)

Gareth was a Partner at Hazel Capital (now Gresham House New Energy) and has over 20 years' experience executing structured transactions across a variety of sectors.

Before Hazel Capital, Gareth worked at Barclays Natural Resource Investments, a captive private equity fund investing in the natural resource and renewable energy sectors.

Prior to this, Gareth worked in the Structured Capital Markets divisions of Barclays Capital and Deutsche Bank, handling the acquisition and disposal of various asset-based companies.

Rupert Robinson (Managing Director, Gresham House Asset Management Limited)

Rupert Robinson has been the Managing Director of Gresham House Asset Management Ltd since September 2015. Before joining Gresham House, Rupert was CEO and CIO of Schroders (UK) Private Bank for 11 years and prior to that spent 17 years at Rothschild where he was latterly Head of Private Clients at Rothschild Asset Management.

Rupert has a proven track record of delivering significant value to shareholders.

He has over 30 years' of experience in asset management, private banking and wealth management, focusing on product innovation, investment management, business development, banking and wealth structuring. He is a member of the Gresham House Group Management and Investment Committees.

Stephen Beck (Divisional Finance Director, Real Assets)

Stephen has 26 years' of industry experience and is a law graduate and Barrister and was called to the Bar in 1996. He is also a Fellow of the Institute of Charted Accountants of England and Wales and qualified with PricewaterhouseCoopers.

He leads an in-house finance team managing New Energy, Renewables, Commercial Forestry and Housing sectors.

Prior to this, Stephen worked at E.ON, where he held a variety of financial and commercial roles from 2000 onwards, ranging from leading large finance teams, developing power station projects, M&A transactions, and working with HM Government delivering low carbon solutions.

James Bustin (Investment Manager, New Energy)

James has nine years' of experience across investments, finance and accounting and joined the team in 2019 having previously worked on public equities and venture capital in the Gresham House Ventures team. James' role in the New Energy team covers fund and portfolio management as well as new investments.

James joined Gresham House in 2018 as part of the acquisition of Livingbridge VC where he had been working as an analyst since 2016. Prior to Livingbridge James worked in TMT audit at EY for three years, qualifying as a chartered accountant.

Charlie von Schmieder (Investment Director, New Energy)

Charlie has over 20 years' experience having started his career as a commercial solicitor before moving to Investment Management for the past nine years.

Charlie has extensive experience in the development, funding and asset management of distributed energy infrastructure projects and has worked on a wide range of technologies including solar PV, hydroelectric, anaerobic digestion, thermal heat networks, gas peaking and battery energy storage.

Charlie's current role began in February 2021, following a year in the team as a contractor. He is responsible for executing investments in energy storage systems, whether acquired before construction or when already operational.

Fernando Casas Garcia (Head of Operations and Asset Management, New Energy)

Fernando has 15 years' experience in the renewable energy sector, mostly in solar PV. Since joining the team in May 2021, Fernando has been focused on the design, development and deployment of processes and procedures that allow the growth in MWs under management and improvement in operational performance.

Prior to Gresham House Fernando was Global Head of Technical for a 2.2GW solar PV portfolio at WiseEnergy focused on the operation of their solar PV assets and increasing overall revenues.

Paul George (Health and Safety Manager, New Energy)

Paul is responsible for building risk management capabilities, systems, processes and culture to support the management of health and safety risks and opportunities in the New Energy team.

Paul has ten years' experience in health and safety risk management in the construction sector as well as a degree in occupational health and safety management.

Prior to Gresham House Paul worked at HS2 Ltd in their infrastructure integrated project team and prior to that worked at Network Rail.

Nick Vest (Finance Director, Energy Storage)

Nick joined Gresham House in January 2021. He has over 20 years' accounting and finance experience and is a Chartered Accountant and Chartered Tax Advisor.

Prior to Gresham House, Nick worked as Finance Director for an internationally focused property investment group and before that was Associate Director of Tax at Temenos Group SA in Switzerland.

The Board

John Leggate CBE, FREng (Chair and Independent Non-Executive Director) - John is highly experienced as an energy sector executive and is a venture investor in the "clean tech" and digital technologies. John has significant board experience and is currently on the board of cyber security rm Global Integrity in Washington DC and is a senior advisor in the energy sector to a "blue chip" international consultant. John was appointed to the Board on 24 August 2018.

Significant interests: John is a Director of Flamant Technologies and Global Integrity, Inc.

Duncan Neale (Audit Committee Chair and Independent Non-Executive Director) - Duncan is a CFO and Finance Director with over 20 years' of commercial experience working for both publicly listed and privately-owned companies. Duncan is a Fellow of the Institute of Chartered Accountants and quali ed with Price Waterhouse in London. Duncan was appointed to the Board on 24 August 2018.

Significant interests: Duncan is a Trustee of the Cambodian Children's Fund UK and a Director of DJN Consultancy Limited.

Catherine Pitt (Chair of the Nominations Committee and Management Engagement Committee and Independent Non-Executive Director) - Cathy is a legal adviser who has specialised in the investment company and asset management sectors for over 20 years, specialising in governance, regulation, capital markets and mergers and acquisitions. Cathy was appointed to the Board on 1 March 2019.

Significant interests: Cathy is a consultant and former partner at CMS Cameron McKenna Nabarro Olswang LLP, a director of Baillie Gifford UK Growth Trust plc and a member of the Advisory Council of Sex Matters, a not-for-profit company limited by guarantee.

David Stevenson (Chair of the Remuneration Committee and Independent Non-Executive Director) - David is a nancial journalist and commentator for a number of leading publications including the Financial Times (the Adventurous Investor), Citywire, and MoneyWeek. He is also Executive Director of the world's leading alternative nance news and events service www.alt .com, which focuses on covering major trends in marketplace lending, crowdfunding and working capital provision for small to medium sized enterprises as well as www.ETFstream.com . David was appointed to the Board on 24 August 2018.

Significant interests: David is a Director of Aurora Investment Trust plc; Altfi Limited; Altfi Data Limited; TF Stream Limited; Planet Sports Rights Limited; Rocket Media LP; The Secured Income Fund plc; Stockmarkets Digest Limited; and Windhorse Aerospace Limited.

The Company has a Board of four Independent Non-Executive Directors.

The Board has 25% female representation. This will rise to 40% following Isabel Liu's appointment to the Board from 1 October 2022. Ms Liu's appointment will also result in the Board having a member from a minority ethnic background (as defined in the Listing Rules). The Board has adopted a formal diversity policy and strongly believes that diversity in all its forms (whether of skills, background or characteristic) is an important contributor to strong decision-making and intends to prioritise diversity in its ongoing succession planning.

All appointments to the Board are, and will continue to be, subject to a formal, rigorous and transparent procedure as required by the AIC Code. The Board's requirements for vacancies on the Board are set with reference to objective criteria and promote diversity of sex, social and ethnic backgrounds, cognitive and personal strengths.

Further, the Board reviews, at least annually, its effectiveness and its combination of skills, experience and knowledge. The Board conducts an externally facilitated effectiveness evaluation every three years, with its first such evaluation having taken place dur ing 2021 and Ms Liu's appointment being made in response to that evaluation process.

The Directors will all stand for re-election at the Annual General Meeting of the Company.


The Directors present the Interim Report and Accounts of the Company for the period ended 30 June 2022.

The Directors during the period, including their appointment dates, are set out in the Board of Directors summary on page 23.

Company performance

The Directors have reviewed the performance of the Company throughout the period. Details of the performance of each investment owned by the Company are included in the Investment Manager's Report on page 5.

The Directors and Investment Manager have developed several tools to review ongoing performance. These include ongoing monthly and quarterly dashboards detailing the performance of each investment in relation to the individual income streams expected of each investment and performance against costs. As the Company deploys capital raised, the Directors have a focus on the underlying investment model for each new investment to ensure it meets the Investment Objectives of the Company.

The Directors are satisfied that underlying performance is being developed in line with expectations: the rollout programme of new investments and upgrades and extensions of investments acquired at IPO is continuing to progress well and has ensured an increasing level of operational performance throughout 2022 so far, which is summarised within the Chair's Statement on page 3.

Financial risk management

The Board believes that the main financial risks of the Company relate to the requirement to ensure the capital commitments of the Company are commensurate with the capital available and the ability of the underlying investments to generate income to the Company to ensure the targeted dividend payments can be paid to investors and total NAV return targets are met. The Board constantly monitors these financial risks.

The Company has the ability to assume up to 50% of gearing and may increase gearing in future ensuring any covenants or associated financial instruments are appropriate for the risk profile of the Company.

Share capital

At the period end, the Company had in issue 541,290,353 Ordinary Shares. There are no other share classes in issue. All shares have voting rights; each Ordinary Share has one vote.

All Ordinary Shares are entitled to receive dividends and interim dividends have been paid by the Company, as shown in the table below. No final dividend has been or will be declared, but the Company's dividend policy of paying four interim dividends will be tabled for approval at each annual general meeting.

 Period in relation   Announcement   Ex-dividend   Payment       Amount          Total amount 
  to which dividend    date           date          date          per Ordinary 
  was paid                                                        Share 
 1 July to 30         15 November    25 November   27 December   1.75 pence      GBP7,662,236.36 
  September 2021       2021           2021          2021 
                     -------------  ------------  ------------  --------------  ---------------- 
 1 October to         14 February    3 March       25 March      1.75 pence      GBP7,662,236.36 
  31 December          2022           2022          2022 
                     -------------  ------------  ------------  --------------  ---------------- 
 1 January to         4 May 2022     12 May 2022   27 May 2022   1.75 pence      GBP7,662,236.36 
  31 March 2022 
                     -------------  ------------  ------------  --------------  ---------------- 

Dividends are not recognised in the financial statements of the Company until paid.

The results of the Company are disclosed in the Investment Manager's Report on page 5 of this Report.

Substantial interests

As at 30 June 2022, and the date of this Interim Report and Accounts, the Company had been notified the following beneficial interests exceeding 3% of the issued share capital, being 541,290,353 Ordinary Shares.

 Shareholder                                  Number of Ordinary   Percentage 
                                               Shares to date       of Issued 
 Sarasin & Partners (London)                  51,964,886           9.60% 
===========================================  ===================  =========== 
 Border to Coast Pensions Partnership 
  (Leeds)                                     33,583,839           6.20% 
===========================================  ===================  =========== 
 Gresham House (London)                       28,928,388           5.34% 
===========================================  ===================  =========== 
 Close Asset Mgt (London)                     26,463,865           4.89% 
===========================================  ===================  =========== 
 Gravis Capital Mgt (London)                  24,492,210           4.52% 
===========================================  ===================  =========== 
 Schroder Investment Mgt (London)             24,207,069           4.47% 
===========================================  ===================  =========== 
 Newton Investment Mgt (London)               19,759,575           3.65% 
===========================================  ===================  =========== 
 BlackRock Investment Mgt - Index (London)    19,713,218           3.64% 
===========================================  ===================  =========== 
 CCLA Investment Mgt (London)                 18,363,884           3.39% 
===========================================  ===================  =========== 
 JM Finn & Co (London)                        18,208,842           3.36% 
===========================================  ===================  =========== 

Annual General Meeting

The Company's second Annual General Meeting (AGM) was held on 30 June 2022. All resolutions proposed to the Company's shareholders at this AGM were duly passed on a poll vote.

Directors remuneration and interests

Details of the gross fees paid to Directors in the period are set out below.

                       Fixed Salary      Short term     Total fixed   Total variable 
                       and fees for    variable pay    remuneration     remuneration 
                        period from     period from     period from      period from 
                         1 Jan 2022      1 Jan 2022        01/01/22      01/01/22 to 
                         to 30 June      to 30 June     to 30/06/22         30/06/22 
                               2022            2022 
                                GBP             GBP 
 Catherine Pitt              23,648               -          23,648                - 
                     --------------  --------------  --------------  --------------- 
 David Stevenson**           23,648               -          23,648                - 
                     --------------  --------------  --------------  --------------- 
 Duncan Neale(*)             32,844               -          32,844                - 
                     --------------  --------------  --------------  --------------- 
 John Leggate                42,040               -          42,040                - 
                     --------------  --------------  --------------  --------------- 
 Total fixed 
  remuneration              122,180               -         122,180                - 
                     --------------  --------------  --------------  --------------- 

In accordance with FCA Listing Rules 9.8.6(R)(1), Directors' interest in the shares of the Company (in respect of which transactions are notifiable to the Company under FCA Disclosure and Transparency Rule 3.1.2(R)) as at 30 June 2022 are shown below:

 Director           No. of Ordinary         Percentage 
                             Shares    of total issued 
                                         share capital 
 Catherine Pitt              30,615            0.0057% 
                   ----------------  ----------------- 
 David Stevenson             22,330            0.0041% 
                   ----------------  ----------------- 
 Duncan Neale                20,375            0.0038% 
                   ----------------  ----------------- 
 John Leggate               101,170            0.0187% 
                   ----------------  ----------------- 
 Total Shares               174,490 
                   ----------------  ----------------- 

Going concern

The Interim Report describes the Company's business activities, together with factors likely to affect its future performance and development and an assessment of the principal risks and uncertainties facing the Company. The key risks facing the Company include, but are not limited to, the risks mentioned on pages 17 to 20.

As at 30 June 2022, the Company had net cash and cash equivalent balances of GBP222mn (excluding cash balances within investee companies) and no debt. The Company is a guarantor to the GBP180mn debt facility (GBP150mn capex facility and GBP30mn revolving credit facility) entered into by the Midco in September 2021 which was partially drawn at the period end. It is anticipated that the capex facility will be fully drawn during 2022 and 2023 to purchase equipment and make payments under EPC contracts for pipeline projects.

Financial models have been prepared on a conservative base case and on a severe but plausible downside case which show that sufficient cash is expected to be available to the Company to meet current obligations and commitments as they fall due and that the debt covenants of Midco's debt facility are expected to be met. The base case assessment considers the Company's ability to continue in operation under the current planned strategy to fund and acquire the currently committed Exclusivity Pipeline. The severe but plausible downside case scenario assumes a reduction in underlying portfolio EBITDA of 25% to the base case. The downside case also takes account of the availability of mitigating actions available to the Directors, such as reducing discretionary spend and pausing the roll-out of projects.

The Directors confirm they have a reasonable expectation that the Company has adequate resources to continue its operations for at least 12 months from the date of signing these financial statements. As such, the Directors have adopted the going concern basis in preparing the Interim Report.

Directors' responsibilities

The Directors confirm to the best of their knowledge:

-- the Interim Report and Accounts have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company, as required by DTR 4.2.4 R of the Disclosure Guidance and Transparency Rules;

-- the Chair's Statement and Interim Investment Manager's Report include a fair review of the development, performance and position of the Company and a description of the principal risks and uncertainties, that it faces for the next six months as required by DTR 4.2.7.R of the Disclosure Guidance and Transparency Rules; and

-- the Investment Manager's Interim Report and Note 20 to the Condensed Financial Statements include a fair review of related party transactions and changes therein, as required by DTR 4.2.8.R of the Disclosure Guidance and Transparency Rules.

John Leggate CBE, FREng.


26 September 2022

Unaudited Condensed Statement of Comprehensive Income

  Six months ended 30 June 2022               Notes         Revenue         Capital           Total 
                                                        (unaudited)     (unaudited)     (unaudited) 
                                                              (GBP)           (GBP)           (GBP) 
------------------------------------------  -------  --------------  --------------  -------------- 
 Net gain on investments at fair 
  value through the profit and loss            5         13,584,083     131,571,872     145,155,955 
 Bank interest income                                        60,037               -          60,037 
 Other income                                               199,500               -         199,500 
------------------------------------------  -------  --------------  --------------  -------------- 
 Total income                                            13,843,620     131,571,872     145,415,492 
 Administrative and other expenses             6        (3,527,579)               -     (3,527,579) 
 Profit before tax                                       10,316,041     131,571,872     141,887,913 
 Taxation                                      7                  -               -               - 
 Profit after tax and total comprehensive 
  income for the period                                  10,316,041     131,571,872     141,887,913 
------------------------------------------  -------  --------------  --------------  -------------- 
 Profit per share (basic and diluted) 
  - pence per share                            8               2.26           28.88           31.15 
  Six months ended 30 June 2021               Notes         Revenue         Capital           Total 
                                                        (unaudited)     (unaudited)           (GBP) 
                                                              (GBP)           (GBP) 
 Net gain on investments at fair 
  value through the profit and loss            5         10,670,174      27,891,255      38,561,429 
 Other income                                                90,000               -          90,000 
 Total income                                            10,760,174      27,891,255      38,651,429 
 Administrative and other expenses             6        (2,153,981)       (172,546)     (2,326,527) 
 Profit before tax                                        8,606,193      27,718,709      36,324,902 
 Taxation                                      7                  -               -               - 
 Profit after tax and total comprehensive 
  income for the period                                   8,606,193      27,718,709      36,324,902 
 Profit per share (basic and diluted) 
  - pence per share                            8               2.47            7.95           10.42 

All items dealt with in arriving at the result for the period relate to continuing operations.

The notes on pages 31 to 44 form an integral part of these Condensed Financial Statements.

There are no other items of comprehensive income or expense apart from those disclosed above and consequently a separate statement of comprehensive income has not been prepared.

Unaudited Condensed Statement of Financial Position

As at 30 June 2022

Company number 11535957

                                             Notes       30 June   31 December 
                                                            2022          2021 
                                                       unaudited       audited 
 Non-current assets 
 Investment in subsidiaries at fair value 
  through profit or loss                       9     564,696,989   389,346,748 
------------------------------------------  ------  ------------  ------------ 
 Total non-current assets                            564,696,989   389,346,748 
------------------------------------------  ------  ------------  ------------ 
 Current assets 
 Cash and cash equivalents                    11     222,179,880   122,175,081 
 Trade and other receivables                  12         431,582       359,467 
 Total current assets                                222,611,462   122,534,548 
 Total assets                                        787,308,451   511,881,296 
------------------------------------------  ------  ------------  ------------ 
 Current liabilities 
 Trade and other payables                     13     (1,867,214)     (210,255) 
------------------------------------------  ------  ------------  ------------ 
 Total current liabilities                           (1,867,214)     (210,255) 
 Total net assets                                    785,441,237   511,671,041 
------------------------------------------  ------  ------------  ------------ 
 Shareholders' equity 
 Share capital                                18       5,412,904     4,378,421 
 Share premium                                18     495,230,992   349,058,720 
 Merger relief reserve                        19      13,299,017    13,299,017 
 Capital reduction reserve                    19      22,837,700    38,162,172 
 Capital reserves                             19     206,993,712    75,421,840 
 Revenue reserves                             19      41,666,912    31,350,871 
------------------------------------------  ------  ------------  ------------ 
 Total shareholders' equity                          785,441,237   511,671,041 
------------------------------------------  ------  ------------  ------------ 
 Net asset value per share (pence)            17          145.11        116.86 

The Interim Report and Accounts were approved and authorised for issue by the Board of Directors and are signed on its behalf by:



Date: 26 September 2022

The notes on pages 31 to 44 form an integral part of these Condensed Financial Statements.

Unaudited Condensed Statement of Changes in Equity

Six months ended 30 June 2022

                  Notes       Share         Share       Merger        Capital       Capital      Revenue           Total 
                            capital       premium       relief      reduction      reserves     reserves   shareholders' 
                                          reserve      reserve        reserve                                     equity 
                              (GBP)         (GBP)        (GBP)          (GBP)         (GBP)        (GBP)           (GBP) 
---------------  ------  ----------  ------------  -----------  -------------  ------------  -----------  -------------- 
 As at 1 
  2022                    4,378,421   349,058,720   13,299,017     38,162,172    75,421,840   31,350,871     511,671,041 
 Profit after 
  tax and total 
  income for 
  the period                      -             -            -              -   131,571,872   10,316,041       141,887,913 
  with owners 
  issued           18     1,034,483   148,965,516            -              -             -            -     149,999,999 
 Costs of 
  shares issued                   -   (2,793,244)            -              -             -            -     (2,793,244) 
  paid             18             -             -            -   (15,324,472)             -            -    (15,324,472) 
 As at 30 
  June 2022        18     5,412,904   495,230,992   13,299,017     22,837,699   206,993,712   41,666,912     785,441,237 
---------------  ------  ----------  ------------  -----------  -------------  ------------  -----------  -------------- 

Six months ended 30 June 2021

         Notes              Share         Share       Merger        Capital      Capital      Revenue           Total 
                          capital       premium       relief      reduction     reserves     reserves   shareholders' 
                                        reserve      reserve        reserve                                    equity 
                            (GBP)         (GBP)        (GBP)          (GBP)        (GBP)        (GBP)           (GBP) 
 --------------------  ----------  ------------  -----------  -------------  -----------  -----------  -------------- 
 As at 1 January 
 2021                   3,485,564   251,601,260   13,299,017     64,123,617   12,867,362   13,513,590     358,890,410 
 Profit after 
  tax and total 
  income for 
  the period                    -             -            -              -   27,718,709    8,606,193      36,324,902 
  with owners 
  paid             18           -             -            -   (12,199,472)            -            -    (12,199,472) 
 As at 30 
  June 2021        18   3,485,564   251,601,260   13,299,017     51,924,145   40,586,071   22,119,783     383,015,840 
----------------  ---  ----------  ------------  -----------  -------------  -----------  -----------  -------------- 

The notes on pages 31 to 44 form an integral part of these Condensed Financial Statements

Unaudited Condensed Statement of Cash Flow

                                            Note       Six months       Six months 
                                                    ended 30 June    ended 30 June 
                                                             2022             2021 
                                                      (Unaudited)      (Unaudited) 
                                                            (GBP)            (GBP) 
-----------------------------------------  -----  ---------------  --------------- 
 Cash flows from operating activities 
 Profit for the period                                141,887,913       36,324,902 
 Net gain on investments at fair 
  value through profit and loss              5      (131,571,872)     (27,891,255) 
 Interest income                                     (13,584,083)     (10,670,174) 
 Increase in trade and other receivables                 (72,115)        (146,300) 
 Increase/(decrease) in trade and 
  other payables                                        1,656,959        (246,973) 
-----------------------------------------  -----  ---------------  --------------- 
   Net cash used in operating activities              (1,683,198)      (2,629,800) 
 Cash flows from investing activities 
 Loans made to subsidiaries                  9       (30,194,286)     (34,744,684) 
 Disposal of investments                                        -        (238,095) 
   Net cash used in investing activities             (30,194,286)     (34,982,779) 
 Cash flows from financing activities 
 Proceeds from issue of Ordinary 
  shares at a premium                        18       149,999,999                - 
 Share issue costs                           18       (2,793,244)                - 
 Dividends paid                                      (15,324,472)     (12,199,472) 
 Net cash from/(used in) financing 
  activities                                          131,882,283     (12,199,472) 
 Net increase/(decrease) in cash 
  and cash equivalents for the period                 100,004,799     (49,812,051) 
-----------------------------------------  -----  ---------------  --------------- 
   Cash and cash equivalents at the 
   beginning of the period                            122,175,081      110,967,025 
-----------------------------------------  -----  ---------------  --------------- 
 Cash and cash equivalents at 
  the end of the period                               222,179,880       61,154,974 
-----------------------------------------  -----  ---------------  --------------- 

The notes on pages 31 to 44 form an integral part of these Condensed Financial Statements

   1.    General information 

Gresham House Energy Storage Fund plc (the Company) was incorporated in England and Wales on 24 August 2018 with company number 11535957 as a closed-ended investment company. The Company's business is as an investment trust within the meaning of Chapter 4 of Part 24 of the Corporation Tax Act 2010. The registered office of the Company is The Scalpel, 18th Floor, 52 Lime Street, London, EC3M 7AF. Its share capital is denominated in Pounds Sterling (GBP or GBP) and currently consists of Ordinary Shares. The Company's principal activity is to invest in a diversified portfolio of operating utility-scale Battery Energy Storage Systems (BESS), which utilise batteries and may also utilise generators. The BESS projects comprising the portfolio are located in diverse locations across Great Britain.

These interim financial statements cover the period from 1 January 2022 to 30 June 2022, with a comparative period from 1 January 2021 to 30 June 2021, and comprise only the results of the Company as all of its subsidiaries are measured at fair value.

   2.    Basis of preparation 

Statement of compliance

The Interim Report and Accounts have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'. The Condensed Financial Statements have been prepared on a historical cost basis except for financial assets and liabilities at fair value through the profit or loss. The accounts have been prepared on a basis that is consistent with accounting policies applied in the preparation of the Company's Annual Financial Statements for 31 December 2021.

Where presentational guidance set out in the Statement of Recommended Practice (SORP) 'Financial Statements of Investment Trust Companies and Venture Capital Trusts', issued by the Association of Investment Companies (AIC) is consistent with the requirements of IFRS, the Directors have prepared the Interim Condensed Financial Statements on a basis compliant with the recommendations of SORP. The supplementary information which analyses the Statement of Comprehensive Income between items of revenue and a capital nature is presented in accordance with the SORP.

These Condensed Financial Statements do not include all information and disclosures required in the Annual Financial Statements and should be read in conjunction with the Company's audited financial statements for the year ended 31 December 2021, which were prepared in accordance with UK adopted international accounting standards.

There are no new standards, amendments or interpretations at the reporting date which have been issued but are not yet effective, which could impact the Interim Report and Condensed Financial Statements of the Company and which are deemed to be material for the Company.

Functional and presentation currency

The currency of the primary economic environment in which the Company operates (the functional currency) is Pounds Sterling (GBP or GBP) which is also the presentation currency.

Going concern

As at 30 June 2022, the Company had net current assets of GBP221mn and had cash balances GBP222mn (excluding cash balances within investee companies), which are sufficient to meet current obligations as they fall due. The major cash outflows of the Company are the costs relating to the acquisition of new assets and payment of dividends, both of which are discretionary (other than committed transactions). All committed acquisitions at the end of the period are sufficiently covered through current cash reserves and debt facilities. The Company had no outstanding debt owing as at 30 June 2022. The Company is an obligor to the debt facility entered into by Gresham House Energy Storage Holdings (the Midco), which was partially drawn at 30 June 2022.

As such, the directors have adopted the going concern basis in preparing the Interim Report and Condensed Financial Statements.

   3.    Significant accounting judgements, estimates and assumptions 

The preparation of the Condensed Financial Statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

During the period the Directors considered the following significant judgements and assumptions:

Assessment as an investment entity

Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries at fair value through profit or loss rather than consolidate them unless they provided investment related services to the Company and are not themselves investment entities. To determine that the Company continues to meet the definition of an investment entity, the Company is required to satisfy the following three criteria:

a. the Company obtains funds from one or more investors for the purpose of providing those investors with investment management services;

b. the Company commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

   c.   the Company measures and evaluates the performance of its investments on a fair value basis. 

The Company meets the criteria as follows:

-- the stated strategy of the Company is to deliver stable returns to shareholders through a mix of energy storage investments;

-- the Company provides investment management services and has several investors who pool their funds to gain access to infrastructure related investment opportunities that they might not have had access to individually; and

-- the Company has elected to measure and evaluate the performance of all of its investments on a fair-value basis. The fair-value method is used to represent the Company's performance in its communication to the market, including investor presentations. In addition, the Company reports fair value information internally to Directors, who use fair value as the primary measurement attribute to evaluate performance.

An indicator of whether a Company is an investment entity is the existence of a formal exit strategy. Although there is currently no documented exit strategy, the assets have a limited life and are not expected to be held indefinitely.

A further indicator of whether a Company is an investment entity is the expectation they hold more than one asset. Following the sale of the investment in Noriker Power in the year to 31 December 2021 the Company holds one investment directly but many investments indirectly, as there is a portfolio of investments within the Midco.

The Directors believe the Company meets the business purpose criteria to invest for capital appreciation and/or income generation and note that the Company is not required to hold its investments indefinitely.

The Directors are of the opinion that the Company meets the typical characteristics of an investment entity and will reassess this conclusion on an annual basis.

Assessment of the Midco as an investment entity

The Midco (see note 9) is not consolidated as it is considered to be an investment entity. The Board of the Midco have co nsidered the requirements of IFRS 10 as per above and confirm the Midco meets these criteria. If the Midco was not considered to meet the definition of an investment entity, then the Company would be required to consolidate the entity. The impact of consolidating the Midco would be to increase the investment value to GBP577,228,493 (31 December 2021: GBP401,115,427) and net working capital would decrease by GBP12,513,504 (31 December 2021: GBP11,768,679).

Investment Manager not a related party

The AIFM is not disclosed as key management personnel in the financial statements. To meet the key management personnel definition the AIFM would need to have authority and responsibility for planning, directing and controlling the activities of the entity. The Directors are of the opinion that the AIFM does not meet these criteria as the Board has to approve key decisions

Valuation of investments in subsidiaries

Significant estimates in the Company's Condensed Financial Statements include the amounts recorded for the fair value of the instruments. By their nature, these estimates and assumptions are subject to measurement uncertainty and the effect on the Company's Condensed Financial Statements of changes in estimates in future periods could be significant. See note 15 for further details.

   4.   Fees and expenses 

Accounting, secretarial and directors

JTC (UK) Limited acts as secretary and administrator for the Company through the Administration and Company Secretarial Agreement. JTC (UK) Limited is entitled to a GBP60,000 annual fee for the provision of Company Secretarial services and a GBP55,000 annual fee for the provision of fund accounting and administration services, based on a Company Net Asset Value of up to GBP200mn. An ad valorem fee based on total assets of the Company which exceed GBP200mn will be applied as follows:

-- 0.04% on the Net Asset Value of the Company in excess of GBP200mn

During the period, expenses incurred with JTC (UK) Limited for administrative and secretarial services amounted to GBP143,194 (2021: GBP88,312) with GBP35,784 (2021: GBP29,210) being outstanding and payable at the period end.


The AIFM, Gresham House Asset Management Limited (the Investment Manager), is entitled to receive from the Company, in respect of its services provided under the AIFM agreement, a fee as follows:

-- 1% on the first GBP250mn of the Net Asset Value of the Company

-- 0.9% on the Net Asset Value of the Company in excess of GBP250mn and up to and including GBP500mn

-- 0.8% on the Net Asset Value of the Company in excess of GBP500mn

During the period, Investment Manager fees recognised in these Condensed Financial Statements amounted to GBP2,633,215 (2021: GBP1,754,677) with GBP1,438,960 (2021: GBP896,591) being outstanding and payable at the period end.

   5.   Net gain on investments at fair value through the profit and loss 
                                                  Six months    Six months 
                                                    ended 30      ended 30 
                                                   June 2022     June 2021 
                                                       (GBP)         (GBP) 
----------------------------------------------  ------------  ------------ 
 Unrealised gain on investments at fair value 
  through the profit and loss                    131,571,872    27,891,255 
 Interest on loans to subsidiaries                13,584,083    10,670,174 
                                                 145,155,955    38,561,429 
----------------------------------------------  ------------  ------------ 
   6.   Administrative and other expenses 
                             Six months    Six months 
                               ended 30      ended 30 
                              June 2022     June 2021 
                                  (GBP)         (GBP) 
-------------------------  ------------  ------------ 
 Administration fees            112,714        88,312 
 Audit fees paid                 94,303        76,250 
 Depositary fees                 17,921        22,369 
 Directors' remuneration        146,845       125,858 
 Management fees              2,633,215     1,754,677 
 Sundry expenses                203,631        86,515 
 Transaction fees                     -      (57,355) 
 Legal and professional         318,950       229,901 
                              3,527,579     2,326,527 
-------------------------  ------------  ------------ 
   7.   Taxation 

The Company is recognised as an Investment Trust Company (ITC) for the accounting period and is taxed at the main rate of 19%.

The Company may utilise group relief or make interest distributions to reduce taxable profits for the period to 30 June 2022, therefore, no corporation tax charge has been recognised for the Company for the period.

                                                  Six months    Six months 
                                                    ended 30      ended 30 
                                                   June 2022     June 2021 
                                                       (GBP)         (GBP) 
---------------------------------------  ----  -------------  ------------ 
 (a) Tax charge in profit or loss 
 UK corporation tax                                        -             - 
                                               -------------  ------------ 
 (b) Reconciliation of the tax charge 
  for the period 
 Profit/ before tax                              141,887,913    36,324,902 
                                               -------------  ------------ 
 Tax at UK main rate of 19%                       26,958,703     6,901,731 
 Tax effect of: 
 Net gain on investments at fair value 
  through the profit and loss                   (24,998,656)   (5,299,338) 
 Non-deductible expenses                            (12,509)      (54,579) 
 Subject to group relief/designated 
  as interest distributions                      (1,947,538)   (1,547,814) 
                                               -------------  ------------ 
 Tax charge for the period                                 -             - 
---------------------------------------------  -------------  ------------ 
   8.   Earnings per Ordinary Share 

Earnings per Ordinary Share (EPS) amounts are calculated by dividing the profit or loss for the period attributable to ordinary equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period. As there are no dilutive instruments outstanding, basic and diluted Earnings per Ordinary Share are identical.

                                                   Six months ended 
                                                       30 June 2022 
                                              Revenue       Capital         Total 
                                                (GBP)         (GBP)         (GBP) 
--------------------------------------   ------------  ------------  ------------ 
 Net profit attributable to ordinary 
  shareholders                             10,316,041   131,571,872   141,887,913 
 Weighted average number of Ordinary 
  Shares for the period                   455,559,738   455,559,738   455,559,738 
                                         ------------  ------------ 
 Profit per Ordinary Share (basic and 
  diluted) - pence per Ordinary Share            2.26         28.88         31.15 
                                         ------------  ------------  ------------ 
                                                                 Six months ended 
                                                                     30 June 2021 
                                              Revenue       Capital         Total 
                                                (GBP)         (GBP)         (GBP) 
--------------------------------------   ------------  ------------  ------------ 
 Net profit attributable to ordinary 
  shareholders                              8,606,193    27,718,709    36,324,902 
 Weighted average number of Ordinary 
  Shares for the period                   348,556,364   348,556,364   348,556,364 
                                         ------------  ------------ 
 Profit per Ordinary Share (basic and 
  diluted) - pence per Ordinary Share            2.47          7.95         10.42 
                                         ------------  ------------  ------------ 
   9.   Investment in subsidiaries 

The Company meets the definition of an investment entity. Therefore, it does not consolidate its subsidiaries but, rather, recognises them as investments at fair value through profit or loss. The Company is not contractually obligated to provide financial support to the subsidiaries and there are no restrictions in place in passing monies up the structure.

The Directors evaluate the performance of the portfolio of energy storage investments through its subsidiary companies on a fair value basis. The income approach is used to value investments as it indicates value based on the sum of the economic income that a project, or group of projects, is anticipated to earn in the future. Where projects are acquired within the quarter to the valuation date, the cost approach is used to determine the fair value.

Therefore, the investments in subsidiaries are measured at FVTPL under IFRS 9, as these financial assets are managed and their performance evaluated on a fair value basis.

                            Immediate           Place          Registered Office   Percentage 
                               Parent     of business                               ownership 
----------------------  -------------  --------------  -------------------------  ----------- 
 Gresham House Energy                                          The Scalpel, 18th 
  Storage Holdings                            England     Floor, 52 Lime Street, 
  PLC                     The Company         & Wales           London, EC3M 7AF         100% 
                                Equity         Loans         Total 
                                                        equity and 
                                 (GBP)         (GBP)         (GBP) 
------------------------  ------------  ------------  ------------ 
 As at 30 June 2022        200,696,010   364,000,979   564,696,989 
------------------------  ------------  ------------  ------------ 
 As at 31 December 2021     69,124,138   320,222,610   389,346,748 
------------------------  ------------  ------------  ------------ 

The loan attracts an interest rate of 8% per annum from the date of advance. Interest compounds on 31 December of each period and the loan is unsecured. The loan principal and any interest accrued shall be repayable on the earlier of (i) written demand from the Company, or (ii) 31 December 2030.

  Reconciliation                                     30 June    31 December 
                                                        2022           2021 
----------------------------------------------  ------------  ------------- 
 Opening balance                                 389,346,748    248,964,175 
 Add: loans advanced                              30,194,286     55,730,831 
 Less: loan repayments                                     -      (419,290) 
 Less: disposals during the year                           -      (238,095) 
 Add: accrued interest on loans (see note 5)      13,584,083     22,470,837 
 Total fair value movement through the profit 
  or loss (see note 5)                           131,571,872     62,838,290 
 Closing balance                                 564,696,989    389,346,748 
----------------------------------------------  ------------  ------------- 

Further analysis

The Company owns 100% of the ordinary shares in Gresham House Energy Storage Holdings plc (the Midco) which holds the investments in the underlying subsidiaries. The investment totalling GBP564,696,989 (31 December 2021: GBP389,346,748) in the Midco comprises underlying investments in the following companies:

                                 Location    Percentage ownership         Total investment 
 Investment                                  30 June   31 December        30 June    31 December 
                                                2022          2021           2022           2021 
 Noriker Staunch Limited           UK           100%          100%     19,427,900     17,342,193 
 HC ESS2 Limited                   UK           100%          100%     25,317,764     23,881,200 
 HC ESS3 Limited                   UK           100%          100%     22,722,829     20,066,324 
 West Midlands Grid 
  Storage Two Limited              UK           100%          100%      4,371,266      3,961,609 
 Cleator Battery Storage 
  Limited                          UK           100%          100%      6,512,416      7,612,741 
 Glassenbury Battery 
  Storage Limited                  UK           100%          100%     34,712,435     38,507,279 
 HC ESS4 Limited                   UK           100%          100%     50,318,757     46,118,825 
 Bloxwich Energy Storage 
  Limited                          UK           100%          100%     29,943,664     25,088,436 
 HC ESS6 Limited                   UK           100%          100%     48,148,235     44,737,484 
 HC ESS7 Limited                   UK           100%          100%     49,870,043     46,055,369 
 Tynemouth Battery 
  Storage Limited                  UK           100%          100%     15,538,309     15,956,108 
 Gridreserve Limited               UK           100%          100%     22,959,209     19,569,973 
 Nevendon Energy Storage 
  Limited                          UK           100%          100%      5,455,003      5,028,954 
 Port of Tyne Energy 
  Storage Limited                  UK           100%          100%     13,824,905     17,551,881 
 Enderby Limited                   UK           100%          100%     30,346,496     19,189,475 
 West Didsbury Limited             UK           100%          100%     29,706,072     14,917,971 
 Penwortham Limited                UK           100%          100%     28,591,476     15,073,790 
 Grendon Storage Limited           UK           100%          100%     18,632,772      2,943,599 
 Melksham East Storage 
  Limited and Melksham 
  West Storage Limited             UK           100%          100%     55,583,038     10,066,239 
 UK Battery Storage 
  Limited                          UK           100%             -     54,295,488              - 
                                                                    -------------  ------------- 
 Investments in subsidiaries 
  - subtotal                                                          566,278,077    393,669,450 
 Coupar Limited                                                         3,940,514      3,519,729 
 Arbroath Limited                                                       4,202,579      3,926,248 
 Stairfoot Generation                                                   2,807,323              - 
                                                                    -------------  ------------- 
 Total investments                                                    577,228,493    401,115,427 
 Working capital in 
  MidCo                                                              (12,531,504)   (11,768,679) 
                                                                    -------------  ------------- 
 Total investment 
  in Midco                                                            564,696,989    389,346,748 
                                                                    -------------  ------------- 

Refer to Note 15 for valuation disclosures relating to the investments in subsidiaries.

   10.         Loan s receivable 

The only loans receivable at 30 June 2022 and 31 December 2021 are loans to the Midco, which is accounted for as an Investment subsidiary.

11. Cash and cash equivalents

                            30 June    31 December 
                               2022           2021 
---------------------  ------------  ------------- 
 Cash at bank           119,179,880    122,175,081 
 Short term deposits    103,000,000              - 
---------------------  ------------  ------------- 
                        222,179,880    122,175,081 
---------------------  ------------  ------------- 

12. Trade and other receivables

                      30 June    31 December 
                         2022           2021 
------------------  ---------  ------------- 
 Management fees       41,985         41,397 
 Prepaid expenses      60,433         88,666 
 VAT receivable       329,164        229,404 
                      431,582        359,467 
------------------  ---------  ------------- 

13. Trade and other payables

                          30 June    31 December 
                             2022           2021 
---------------------  ----------  ------------- 
 Administration fees       29,211         29,210 
 Audit fees                86,500         95,804 
 Other accruals         1,751,503         85,241 
                        1,867,214        210,255 
---------------------  ----------  ------------- 

14. Categories of financial instruments

                                               30 June    31 December 
                                                  2022           2021 
----------------------------------------  ------------  ------------- 
 Financial assets 
 Financial assets at amortised cost: 
 Cash and cash equivalents                 222,179,880    122,175,081 
 Trade and other receivables (excluding 
  VAT)                                         102,418        130,063 
 Fair value through profit or loss: 
 Investment in subsidiaries                564,696,989    389,346,748 
 Total financial assets                    786,979,287    511,651,892 
----------------------------------------  ------------  ------------- 
 Financial liabilities 
 Financial liabilities at amortised cost 
 Trade and other payables                   (1,867,214)     (210,255) 
 Net financial assets                       785,112,073   511,441,637 
-----------------------------------------  ------------  ------------ 

At the balance sheet date, all financial assets and liabilities were measured at amortised cost except for the investment in subsidiaries which are measured at fair value.

15. Fair value measurement

Valuation approach and methodology

The same valuation methodology and process is followed in these Condensed Financial Statements as was applied in the preparation of the Company's Annual Financial Statements for the year ended 31 December 2021. The Company used the income approach to value its investments. The income approach indicates value based on the sum of the economic income that an asset, or group of assets, is anticipated to produce in the future. Therefore, the income approach is typically applied to an asset that is expected to generate future economic income, such as a business that is considered a going concern. Free cash flow to total invested capital is typically the appropriate measure of economic income. The income approach is the DCF approach and the method discounts free cash flows using an estimated discount rate (WACC).

Valuation process

The Company, via the Midco, held a portfolio of energy storage investments with a capacity of 425 Megawatt ("MW") operational (the Investments). The Investments comprise 28 projects held in 24 special project vehicles.

All of these investments are based in the UK. The current portfolio consists of non-market traded investments, and valuations are analysed using forecasted cash flows of the assets and use the discounted cash flow approach for valuation purposes. The Company engages external, independent, and qualified valuers to determine the fair value of the Company's investments or valuations are produced by the Investment Manager. As at 30 June 2022 the fair value of the portfolio of investments has been determined by the Investment Manager and reviewed by Grant Thornton UK LLP.

The valuations have been determined using discounted cash flow methodology, whereby the estimated post-tax future cash flows relating to the Company's equity investment in each project have been discounted to 30 June 2022, using post-tax discount rates reflecting the risks associated with each investment project and the time value of money. The Investment Manager believes that use of post-tax discount rates is most appropriate methodology to determine fair values.

New operational projects acquired are initially held at cost, which is deemed to be fair value, and are revalued once the performance of the assets has been verified. The valuation of these assets, after the initial period, is performed on the same basis as the remainder of the portfolio. Assets in the course of construction are also held initially at cost, but are revalued, with a construction risk premium of 0.5%, once certain criteria are met including the timescale to expected commercial operations and the signing of certain contracts.

The determination of the discount rate applicable to each individual investment project takes into account various factors, including, but not limited to, the stage reached by each project, the period of operation, the historical track record, the terms of the project agreements and the market conditions in which the project operates.

The Investment Manager exercises its judgement in assessing the expected future cash flows from each investment. The Investment Manager produces detailed financial models for each underlying project. The Investment Manager makes amendments where appropriate to:

a) discount rates (i) implied in the price at which comparable transactions have been announced or completed in the UK energy storage sector (if available); (ii) publicly disclosed by the Company's peers in the UK energy storage sector (if available); and (iii) discount rates applicable for other comparable infrastructure asset classes and regulated energy sectors;

   b)   changes in power market forecasts from leading market forecasters; 

c) changes in the economic, legal, taxation or regulatory environment, including changes in retail

price index expectations;

   d)   technical performance based on evidence derived from project performance to date; 
   e)   the terms of any power purchase agreement arrangements; 
   f)    accounting policies; 
   g)   the terms of any debt financing at project level; 

h) claims or other disputes or contractual uncertainties; and

   i)    changes to revenue, cost or other key assumptions (may include an assessment of future 

cost trends, as appropriate).

Valuation assumptions include consideration of climate related matters such as expected levels of renewable energy entering the grid system, demand patterns and current regulatory policy. These are factored into the pricing assumptions which are prepared by an independent consultancy.

The Board reviews the operating and financial assumptions, including the discount rates, used in the valuation of the Company's underlying portfolio.

                                     30 June 2022            31 December 2021 
 Key valuation                        Range   Weighted           Range   Weighted 
  input                           (project)    average       (project)    average 
                                    average                    average 
----------------------------   ------------  ---------  --------------  --------- 
 WACC / WADR                       - 11.35%     10.79%   9.99% -11.40%     10.77% 
 RPI (see assumption below)       2.7%-2.8%       2.7%       2.8%-2.9%       2.8% 
-----------------------------  ------------  ---------  --------------  --------- 

RPI assumptions include 7.5% for 2022, 4.5% for 2023 and 2.5% from 2025.

Another key assumption in the valuation models is the volatility of power prices. Due to the Asset Optimisation strategy, the investments are able to benefit from a range of revenue streams, either arbitrage on power price volatility or FFR and other similar income streams. Due to the nature of the assets owned by the investments, should one revenue stream be impacted the asset is able to switch to alternative sources of revenue to seek to maintain total revenue targets.

Sensitivity analysis

The below table reflects the range of sensitivities in respect of the fair value movements of the Company's investments, via the MidCo.

The sensitivity analysis does not include an assessment of the fall in the power price as underlying power information is provided on a net revenue basis as the investment portfolio generates value through maximising on the volatility in the market, therefore adjusting revenue as a total is a more relevant measure. Therefore, we have provided a sensitivity based on percentage changes in revenue overall.

 Investment          Project               Valuation     Significant    Sensitivity      Estimated      Estimated 
                                            technique     inputs                         effect on      effect on 
                                                                                        fair value     fair value 
                                                                                           30 June    31 December 
                                                                                              2022           2021 
                                                                                             (GBP)          (GBP) 
------------------  --------------------  ------------  -------------  ------------  -------------  ------------- 
 Noriker Staunch                                         Discount 
  Ltd                Staunch               DCF            rate          +1%            (1,253,032)      (1,188,112) 
                                                                         -1%             1,412,873        1,346,462 
                                                         Revenue        +10%             1,449,587        1,307,467 
                                                                          -10%         (1,461,687)      (1,321,450) 
                      Lockleaze,                         Discount 
 HC ESS2 Ltd          Littlebrook          DCF            rate          +1%            (1,456,122)      (1,622,287) 
                                                                         -1%             1,643,637        1,844,065 
                                                         Revenue        +10%             1,544,893        1,594,147 
                                                                          -10%         (1,671,904)      (1,947,003) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 HC ESS3 Ltd         Roundponds            DCF            rate          +1%            (1,434,104)      (1,504,951) 
                                                                         -1%             1,654,650        1,744,638 
                                                         Revenue        +10%             1,618,914        1,475,139 
                                                                          -10%         (1,617,950)      (1,505,125) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 West Midlands 
  Grid Storage                                           Discount 
  Two Ltd            Wolverhampton         DCF            rate          +1%              (236,691)        (271,807) 
                                                                         -1%               266,431          308,750 
                                                         Revenue        +10%               416,429          399,734 
                                                                          -10%           (427,599)        (435,547) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 Cleator Battery                                         Discount 
  Storage Ltd        Cleator               DCF            rate          +1%              (723,772)        (743,633) 
                                                                         -1%               822,252          851,165 
                                                         Revenue        +10%               978,070          883,206 
                                                                          -10%           (982,821)        (886,715) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 Glassenbury         Glassenbury 
  Battery Storage     A and Glassenbury                  Discount 
  Ltd                 B                    DCF            rate          +1%            (3,490,830)      (3,576,483) 
                                                                         -1%             3,966,367        4,092,515 
                                      Revenue                           +10%             4,655,027        4,201,276 
                                                                          -10%         (4,674,406)      (4,216,089) 
---------------------------------------------------------------------  ------------  -------------  --------------- 
 HC ESS4 Ltd         Red Scar              DCF            rate          +1%            (3,406,653)      (3,751,022) 
                                                                         -1%             3,985,911        4,416,962 
                                                         Revenue        +10%             4,480,141        4,393,203 
                                                                          -10%         (4,441,518)      (4,420,195) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
  Energy Storage                                         Discount 
  Ltd                Bloxwich              DCF            rate          +1%            (1,685,810)      (1,822,905) 
                                                                         -1%             1,909,995        2,074,137 
                                                         Revenue        +10%             2,872,364        2,690,591 
                                                                          -10%         (2,898,708)      (2,719,548) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 HC ESS7 Ltd         Thurcroft             DCF            rate          +1%            (3,333,169)      (3,605,403) 
                                                                         -1%             3,863,604        4,203,128 
                                                         Revenue        +10%             4,635,319        4,234,266 
                                                                          -10%         (4,495,812)      (4,284,189) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 HC ESS6 Ltd         Wickham               DCF            rate          +1%            (2,935,199)      (3,207,419) 
                                                                         -1%             3,349,866        3,680,717 
                                                         Revenue        +10%             4,204,014        4,004,174 
                                                                          -10%         (4,125,033)      (4,060,406) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
  Battery Storage                                        Discount 
  Ltd                Tynemouth             DCF            rate          +1%            (1,532,915)      (1,661,999) 
                                                                         -1%             1,792,801        1,956,686 
                                                         Revenue        +10%             2,199,245        2,037,818 
                                                                          -10%         (2,211,050)      (2,044,741) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 Gridreserve                                             Discount 
  Ltd                Byers Brae            DCF            rate          +1%            (1,413,615)      (1,436,577) 
                                                                         -1%             1,603,077        1,638,084 
                                                         Revenue        +10%             2,261,484        2,013,383 
                                                                          -10%         (2,263,998)      (2,048,092) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
  Energy Storage                                         Discount 
  Ltd                Nevendon              DCF            rate          +1%              (691,947)        (646,090) 
                                                                         -1%               774,931          729,222 
                                                         Revenue        +10%             1,260,925        1,097,594 
                                                                          -10%         (1,267,204)      (1,104,807) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 Port of Tyne 
  Energy Storage     Port of                             Discount 
  Ltd                 Tyne                 DCF            rate          +1%            (1,333,953)      (1,377,801) 
                                                                         -1%             1,450,442        1,510,192 
                                                         Revenue        +10%             2,614,900        2,248,320 
                                                                          -10%         (2,628,516)      (2,243,005) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 Enderby Storage                                         Discount 
  Ltd                Enderby               DCF            rate          +1%            (2,867,644)      (2,598,696) 
                                                                         -1%             3,305,444        3,026,012 
                                                         Revenue        +10%             3,846,162        3,466,831 
                                                                         -10%          (3,873,764)      (3,516,511) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 West Didsbury                                           Discount 
  Storage Ltd        West Didsbury         DCF            rate          +1%            (2,859,544)      (2,605,119) 
                                                                         -1%             3,296,741        3,035,333 
                                                         Revenue        +10%             3,805,776        3,426,385 
                                                                          -10%         (3,833,194)      (3,472,099) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 Penwortham                                              Discount 
  Storage Ltd        Penwortham            DCF            rate          +1%            (2,560,294)      (2,640,548) 
                                                                         -1%             2,910,373        3,079,486 
                                                         Revenue        +10%             3,601,039        3,361,519 
                                                                          -10%         (3,627,128)      (3,402,072) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 Grendon Storage                                         Discount 
  Ltd                Grendon               DCF            rate          +1%            (3,326,590)                - 
                                                                         -1%             3,842,652 
                                                         Revenue        +10%             4,663,979                - 
                                                                          -10%         (4,713,881) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
  East Ltd 
  and Melksham                                           Discount 
  West Ltd           Melksham              DCF            rate          +1%            (5,835,801)                - 
                                                                         -1%             6,740,567 
                                                         Revenue        +10%             7,245,918                - 
                                                                          -10%         (7,298,895) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 UK Battery                                              Discount 
  Storage Ltd        Elland                DCF            rate          +1%            (3,140,661)                - 
                                                                         -1%             3,557,220 
                                                         Revenue        +10%             4,529,277                - 
                                                                          -10%         (4,623,746) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 UK Battery                                              Discount 
  Storage Ltd        York                  DCF            rate          +1%            (2,698,525)                - 
                                                                         -1%             3,063,555 
                                                         Revenue        +10%             4,125,004                - 
                                                                          -10%         (4,187,657) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 
 UK Battery          Bradford                            Discount 
  Storage Ltd         West                 DCF            rate          +1%            (5,309,534)                - 
                                                                         -1%             6,018,033 
                                                         Revenue        +10%             7,770,385                - 
                                                                          -10%         (7,860,356) 
   ------------------------------------------------------------------  ------------  -------------  --------------- 

The Coupar, Arbroath, and Stairfoot projects are held at cost.

 Portfolio Sensitivity of RPI    Sensitivity         Estimated      Estimated 
                                                effect on fair      effect on 
                                                         value     fair value 
                                                  30 June 2022    31 December 
                                                         (GBP)           2021 
------------------------------  ------------  ----------------  ------------- 
 Inflation                            +0.25%        16,525,365      9,733,718 
                                      -0.25%      (16,016,559)    (9,417,405) 

The level in the fair value hierarchy within which the fair value measurement is categorised is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, significance of the inputs is assessed against the fair value measurement in its entirety. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs or any other significant unobservable inputs, that measurement is a Level 3 measurement.

Valuation of financial instruments

The investment at fair value through profit or loss is a Level 3 in the fair-value hierarchy and the reconciliation in the movement of this Level 3 investment is presented below. No transfers between levels took place during the period.

16. Financial risk management

As at 30 June 2022 there have been no changes to the financial instruments risk identified in the Annual Financial Statements of 31 December 2021.

The Company is exposed to certain risks through the ordinary course of business and the Company's financial risk management objective is to minimise the effect of these risks. The management of risks is performed by the Directors of the Company and the exposure to each financial risk considered potentially material to the Company, how it arises and the policy for managing it is summarised in the Annual Financial Statements of 31 December 2021.

The Company's only financial liabilities are trade and other payables. The Company has sufficient cash reserves to cover these in the short to medium term. The Company's cash flow forecasts are monitored regularly to ensure the Company is able to meet its obligations when they fall due.

The following table reflects the maturity analysis of financial assets and liabilities.

                                                                 < 1 year    1 to    2 to      > 5 years         Total 
                                                                    (GBP)       2       5          (GBP)         (GBP) 
  As at 30                                                                  Years   years 
  June 2022                                                                 (GBP)   (GBP) 
--------------  ---------------------------------------------------------  ------  ------  -------------  ------------ 
 Cash and cash 
  equivalents                                                 222,179,880       -       -              -   222,179,880 
 Trade and 
  (note 12)**                                                   102,418**       -       -              -       102,418 
 Investments                                                                    -       -              -             - 
 Fair value 
 profit or 
 Investment in 
  subsidiaries                                                          -       -       -   564,696,989*   564,696,989 
  assets                                                      222,282,298       -       -    564,696,989   786,979,287 
--------------  ---------------------------------------------------------  ------  ------  -------------  ------------ 
 at amortised 
 Trade and 
  (note 13)                                                     1,867,214       -       -              -     1,867,214 
  liabilities                                                   1,867,214       -       -              -     1,867,214 
--------------  ---------------------------------------------------------  ------  ------  -------------  ------------ 
                                        < 1       1 to       2 to     > 5 years         Total 
                                       year    2 years    5 years 
   As at 31 December                  (GBP)      (GBP)      (GBP)         (GBP)         (GBP) 
-----------------------------  ------------  ---------  ---------  ------------  ------------ 
 Financial assets 
 Cash and cash equivalents      122,175,081          -          -             -   122,175,081 
 Trade and other receivables 
  (note 12)                        41,397**          -          -             -        41,397 
 Investments                              -          -          -             -             - 
 Fair value through 
  profit or loss: 
 Investment in subsidiaries               -          -          -             *   389,346,748 
 Total financial assets         122,216,478          -          -   389,346,748   511,563,226 
-----------------------------  ------------  ---------  ---------  ------------  ------------ 
 Financial liabilities 
 Financial liabilities 
  at amortised cost 
 Trade and other payables 
  (note 13)                         210,255          -          -             -       210,255 
 Total financial liabilities        210,255          -          -             -       210,255 
-----------------------------  ------------  ---------  ---------  ------------  ------------ 

*excludes the equity portion of the investment in subsidiaries

**excludes VAT

17. Net asset value per Ordinary Share

Basic NAV per Ordinary Share is calculated by dividing the Company's net assets as shown in the statement of financial position that are attributable to the ordinary equity holders of the Company by the number of Ordinary Shares outstanding at the end of the period. As there are no dilutive instruments outstanding, basic and diluted NAV per Ordinary Share are identical.

                                                       30 June    31 December 
                                                          2022           2021 
                                                         (GBP)          (GBP) 
------------------------------------------------  ------------  ------------- 
 Net assets per Statement of Financial Position    785,441,239    511,671,041 
 Ordinary Shares in issue                          541,290,353    437,842,078 
 NAV per Ordinary Share - Basic and diluted 
  (pence)                                               145.11         116.86 
------------------------------------------------  ------------  ------------- 
   18.   Share capital 
                                            Ordinary   Share capital 
                                       Shares number           (GBP) 
-----------------------------------  ---------------  -------------- 
 Allotted and issued share capital 
 As at 30 June 2022                      541,290,353       5,412,904 
-----------------------------------  ---------------  -------------- 
 As at 31 December 2021                  437,842,078       4,378,421 
-----------------------------------  ---------------  -------------- 

Share capital and share premium account

On incorporation the Company issued 1 Ordinary Share of GBP0.01 which was fully paid up and 50,000 redeemable preference shares of GBP1 each which were paid up to one quarter of their nominal value. These 50,000 redeemable preference shares were subsequently redeemed.

On 25 May 2022, the Company announced the successful raise of gross proceeds of GBP150mn through the issue of 103,448,275 new Ordinary Shares at an issue price of 145p per share.


An interim dividend of 1.75p per Ordinary Share for the period from 1 October 2021 to 31 December 2021 was announced on 14 February 2022. The dividend of GBP7,662,236 was paid on 25 March 2022 to shareholders on the register as at the close of business on 4 March 2022. The ex-dividend date was 3 March 2022.

An interim dividend of 1.75p per Ordinary Share for the period from 1 January 2022 to 31 March 2022 was announced on 4 May 2022. The dividend of GBP7,662,236 was paid on 27 May 2022 to shareholders on the register as at the close of business on 13 May 2022. The ex-dividend date was 12 May 2022.

Ordinary shareholders are entitled to all dividends declared by the Company and, in a winding-up, to all of the Company's assets after repayment of its borrowings and ordinary creditors. Ordinary shareholders have the right to vote at meetings of the Company. All Ordinary Share s carry equal voting rights.

19. Reserves

The nature and purpose of each of the reserves included within equity at 30 June 2022 are as follows:

-- Merger relief reserve relates to the premium on shares which were issued in exchange for shares as part of the IPO.

-- Capital reduction reserve represents a distributable reserve created following a Court approved reduction in capital.

-- Revenue reserves represent cumulative revenue net profits recognised in the Condensed Statement of Comprehensive Income.

-- Capital reserves represent cumulative net gains and losses on investments and cumulative capital expenses recognised in the interim Condensed Statement of Comprehensive Income.

The only movements in these reserves during the period are disclosed in the Condensed Statement of Changes in Equity.

20. Transactions with related parties and other significant contracts

The Company and the Directors are not aware of any person who, directly or indirectly, jointly or severally, exercises or could exercise control over the Company. The Company does not have an ultimate controlling party.

Details of related parties are set out below:


                                    Six months    Six months 
                                      ended 30      ended 30 
                                     June 2022     June 2021 
                                         (GBP)         (GBP) 
 Directors' remuneration               122,180       116,250 
                                  ------------  ------------ 
 Employer's NI                          15,037        13,608 
                                  ------------  ------------ 
 Total Key management personnel        137,217       129,858 
                                  ------------  ------------ 

All directors' remuneration is short term salary.

No dividend amounts were payable as at 30 June 2022 (2021: none).

The aggregate fees of the Directors will not exceed GBP500,000 per annum. There are no performance conditions attaching to the remuneration of the Directors as the Board does not believe that this is appropriate for Non-Executive Directors. The Directors are not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits.

Loans to related parties

Loans to subsidiaries represent amounts due to the Company and are disclosed in Note 9.

21. Capital commitments

As at 30 June 2022 the Company is a guarantor to the Midco debt facility but otherwise has no significant binding or conditional future capital commitments.

22. Post balance sheet events

There were no significant post balance sheet events that need to be disclosed in the financial statements.

   9.   Alternative Performance Measures 
 1) Dividend per Ordinary share 
 Dividend per Ordinary share is a measure to show the distributions 
  made to shareholders during the year. 
 Dividend period: 6 months to 30 June        Dividend              Number of           Total dividend 
  2022                                       paid per              shares on                    (GBP) 
                                          share (GBP)               dividend 
 Q1 2022 (declared 4 May 2022)                 0.0175            437,842,078                7,662,236 
 Q2 2022                                       0.0175            541,290,353                9,472,581 
                                               0.0350                                      17,134,817 
 Dividend period: 6 months to 30 June        Dividend              Number of           Total dividend 
  2021                                       paid per              shares on                    (GBP) 
                                          share (GBP)               dividend 
 Q1 2021 (declared 28 April 2021)              0.0175            348,556,364                6,099,736 
 Q2 2021 (declared 1 July 2021)                0.0175            348,556,364                6,099,736 
                                               0.0350                                      12,199,472 
 2) Ordinary share price total return 
 Ordinary share price total return is a measure of the return that 
  could have been obtained by holding a share over the reporting 
                                                         6 months      6 months 
                                                       to 30 June    to 30 June 
                                                             2022          2021 
                                                            pence         pence 
 Share price at end of period                              157.00        120.75 
 Dividends paid from inception to end of period             18.50         13.25 
 Dividend reinvestment impact                               11.35          2.25 
 Share price at initial public offering                  (100.00)      (100.00) 
                                                     ------------  ------------ 
 Ordinary share price total return since inception          86.85         36.25 
                                                     ------------  ------------ 
 Ordinary share price total return since inception 
  %                                                         86.9%         36.3% 
                                                     ------------  ------------ 
 3) Net asset value (NAV) per Ordinary share 
                                                      30 June 2022         30 June 2021 
 NAV at end of period                               GBP785,441,237       GBP383,015,839 
 Ordinary shares in issue                              541,290,353          348,556,364 
 NAV per Ordinary share (pence)                             145.11               109.89 
                                               -------------------  ------------------- 
 4) NAV per Ordinary share total return for 
  the period 
 NAV per Ordinary share total return is a measure of the success 
  of the Investment Manager's strategy to grow the NAV, showing 
  how the NAV has changed over a period of time, taking into account 
  both capital returns and dividends paid to shareholders. 
                                                       Six months    Six months 
                                                       to 30 June    to 30 June 
                                                             2022          2021 
                                                            pence         pence 
 NAV per Ordinary share at end of period                   145.11        109.89 
 Dividends paid from inception to end of period             18.50         13.25 
 Dividend reinvestment impact                                9.58          1.34 
                                                     ------------  ------------ 
 NAV per Ordinary share at end of period including 
  dividend reinvestment                                    173.19        124.48 
 NAV per Ordinary share at beginning of period 
  including dividend reinvestment                        (136.12)      (113.13) 
                                                     ------------  ------------ 
 NAV total return for the period                            37.07         11.35 
                                                     ------------  ------------ 
 NAV per Ordinary share total return for the 
  period                                                    27.2%         10.0% 
                                                     ------------  ------------ 
 5) Gross asset value (GAV) 
 GAV is a measure of the total value of the 
  Company's assets. 
                                                30 June 2022   30 June 2021 
                                                   (GBP'000)      (GBP'000) 
 Total assets reported in the Company at end 
  of period                                          787,308        384,084 
 External debt held by the MidCo                      10,000              - 
 GAV                                                 797,308        384,084 
                                               -------------  ------------- 
 6) Ongoing charges figure (OCF) 
 OCF measures the Company's recurring fund management costs incurred 
  during the year expressed as a percentage of the average of the 
  net assets at the end of each quarter during the period. 
                                                   Six months    Six months 
                                                   to 30 June    to 30 June 
                                                         2022          2021 
                                                    (GBP'000)     (GBP'000) 
 Fees to Investment Manager                             2,633         1,755 
 Legal and professional fees                              319           230 
 Other transaction fees                                     -          (57) 
 Administration fees                                      197           159 
 Directors' remuneration                                  147           126 
 Audit fees                                                94            76 
 Other ongoing expenses                                   138            38 
                                                 ------------  ------------ 
 Total expenses                                         3,528         2,327 
 Non-recurring expenses not in OCF calculation           (66)             9 
                                                 ------------  ------------ 
 Total ongoing expenses                                 3,462         2,336 
                                                 ------------  ------------ 
 Weighted Average NAV for the period                  601,601       371,411 
 Number of days in period                                 181           181 
 Ongoing charges for the period (annualised)            1.16%         1.27% 
 7) Operational dividend cover 
 Operational dividend cover is a measure to demonstrate the Company's 
  ability to pay dividends from the earnings of its underlying 
  investments, including interest earned on construction capital 
  deployed to non-operational SPVs, and after accounting for external 
  interest costs and administrative costs of the Company, but excluding 
  transaction costs and debt arrangement fees. 
                                                      Six months    Six months 
                                                      to 30 June    to 30 June 
                                                            2022          2021 
                                                       (GBP'000)     (GBP'000) 
 EBITDA generated by subsidiaries                         22,723        22,438 
 Bank interest received                                       60             - 
 Ongoing costs in the Company                            (3,462)       (2,336) 
 Debt service costs in subsidiaries                        (966)         (451) 
 Interest income on construction capital deployed 
  to SPVs                                                  1,913            66 
                                                    ------------  ------------ 
 Net earnings for dividend cover                          20,268        19,717 
                                                    ------------  ------------ 
 Dividends declared by the Company                        17,135        12,199 
                                                    ------------  ------------ 
 Dividend cover                                            1.18x         1.62x 
                                                    ------------  ------------ 
 8) Dividend yield 
 Dividend yield is a measure to show the dividend return received 
  by shareholders for the year. 
                                               Six months    Six months 
                                               to 30 June    to 30 June 
                                                     2022          2021 
 Dividend per share declared in respect of 
  the period (pence)                                 7.00          7.00 
 Share price at end of period (pence)              157.00        120.75 
 Dividend yield                                      4.5%          5.8% 
                                             ------------  ------------ 


      Non-Executive Directors:         Catherine Pitt 
                                        David Stevenson 
                                        Duncan Neale 
                                        John Leggate - Chair 
      Registered Office                The Scalpel 
                                        18th Floor 
                                        52 Lime Street 
                                        EC3M 7AF 
     Manager and AIFM                  Gresham House Asset Management 
                                        5 New Street Square 
                                        EC4A 3TW 
     Corporate Broker and Financial    Jefferies International Limited 
      Adviser                           Vintners Place 
                                        68 Upper Thames Street 
                                        EC4V 3BJ 
     Tax Advisor                       Blick Rothenberg Limited 
                                        16 Great Queen Street 
                                        Covent Garden 
                                        WC2B 5AH 
     Independent Auditor               BDO LLP 
                                        55 Baker Street 
                                        W1U 7EU 
     Administrator and Secretary       JTC (UK) Limited 
                                        The Scalpel 
                                        18th Floorgoing 
                                        52 Lime Street 
                                        EC3M 7AF 
     Registrar and Receiving Agent     Computershare Investor Services 
                                        The Pavilions 
                                        Bridgewater Road 
                                        BS13 8AE 
     Legal Adviser                     Eversheds LLP 
                                        1 Wood Street 
                                        EC2V 7WS 
     Depositary Services               INDOS Financial Limited 
                                        54 Fenchurch Street 
                                        EC3M 3JY 
     Investment Valuer                 Grant Thornton LLP 
                                        30 Finsbury Square 
                                        EC2A 1AG 
     Ticker: GRID 


Asset optimisation

Asset optimisation involves buying and selling electricity in order to capture a spread between the high and low electricity prices on any given day. This can be done via one or more market mechanisms, hence the expression "Asset Optimisation".


An asymmetrical grid connection is where the import and export capacities are different.

Balancing Services

National Grid procure services to balance demand and supply and to ensure the security and quality of electricity supply across Britain's transmission system. These include:

-- Black Start

-- Demand side response

-- Enhanced frequency response (EFR)

-- Firm frequency response (FFR)

-- Short term operating reserve (STOR)



A unit to measure the speed at which a battery is charged or discharged.1C reflects a charge of 0% to 100% (or discharge of 100% to 0%) in one hour, a C-rate greater than 1 means a faster charge (or discharge) and less than 1 means a slower charge (or discharge). The C-rate can be calculated as 1 divided by the time it would take for the charge (or discharge) in hours. Therefore, 2C is a half hour charge (or discharge), and 0.5C is a 2-hour charge (or discharge). A BESS max C-rate is calculated as 1 divided by the Battery duration in hours.

Capacity Market

The income received by generators to ensure generation capacity is available to meet shortfalls.


Large wind farms are connected to the UK's high-voltage network and National Grid balances electricity supply and demand. As demand rises and falls during the day, electricity supply mirrors these peaks and troughs.

National Grid accepts bids and offers from electricity generators to increase or decrease electricity generation as and when required. As such it may mean that there are times when generators are paid to curtail their output (constraint payments).


Dynamic Frequency Services:

Consists of three services Dynamic Containment (DC), Dynamic Moderation (DM) and Dynamic Regulation (DR). Each of these services focuses on a different frequency deviation however all have a response power linked to a frequency deviation profile.

Dynamic Regulation is a pre-fault service designed to slowly correct continuous but small deviations in frequency with the aim of regulating frequency around 50Hz. Dynamic Moderation is designed to help manage sudden large imbalances between supply and demand to ensure frequency is maintained within operational limits. Dynamic Containment acts post-fault and is designed to quickly cover lost supply or demand and to help return frequency to within operational limits as quickly as possible.

More information can be found here: https://www.nationalgrideso.com/industry-information/balancing-services/frequency-response-services


Contracts for Engineering, Construction and Procurement Management.


Net Asset Value being the total Net Assets in the Company divided by the total number of Ordinary Shares in issue as at 30 June 2022.

Ongoing Charges Figure (OCF)

The Ongoing Charges Figure includes all charges and costs incurred by the Company which relate to the ongoing operation of the Company. This includes management fees, administration fees, audit fees, Director's remuneration, depositary services costs and other similar costs. It excludes capital costs and costs of raising new capital. The Ongoing Charges are then divided by the weighted average NAV and annualised.

Ordinary Share

Share in the Company with a nominal value of 1 penny.


A symmetrical grid connection is where the import and export capacities are the same.



Triads are defined as the three half-hours of highest demand on the GB electricity transmission system between November and February each year, the Triads are part of a charge-setting process. This identifies peak electricity demand at three points during the winter in order to minimise energy consumption. However, Triads must be at least 10 days apart. This is to avoid all three potentially falling in consecutive hours on the same day, for example during a particularly cold spell of weather.


[1] GWh capacity figures exclude additional capacity being installed at our five, previously EFR-contracted sites which are being upgraded from their current sub-1 hour capacity levels to be able to be traded in a similar way to the portfolio's other operational projects

[2] Department for Business, Energy and Industrial Strategy Statistical Release 30 June 2022

[3] Alternative Performance Measures, including Operational Dividend Cover, are defined and calculated on pages 45 to 48

[4] Facility held by the wholly owned subsidiary, Gresham House Energy Storage Holdings PLC

[5] Financial performance of the underlying investment portfolio contributes to the valuation of investments through growth in working capital balances. Earnings greater than forecasted in prior valuations will increase valuations and hence NAV

[7] Overseas Jurisdictions as defined in the Company's Circular on 22 April 2022 consists of United States, Canada, Australia, Northern Ireland and any EEA Member Country (including Republic of Ireland)

6 GAV is defined and calculated on pages 45 to 48

[9] Collocation project investments and with solar panels limited to 6% of GAV

[10] Alternative Performance Measures are defined and calculated on page 45 to 48 of the Interim Report

[11] Alternative Performance Measures are defined and calculated on page 45 to 48 of the Interim Report

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(END) Dow Jones Newswires

September 27, 2022 02:00 ET (06:00 GMT)

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