TIDMGSF
RNS Number : 6578P
Gore Street Energy Storage Fund PLC
20 October 2021
20 October 2021
Gore Street Energy Storage Fund plc
(the "Company" or "Gore Street")
Trading Update
Balancing and Baseload Prices Reach Record Highs
Compelling Trading Opportunities Created by Present Energy
Market Dislocations
Gore Street Energy Storage Fund (GSF), London's first listed and
category defining energy storage fund supporting the transition to
a low carbon society, is pleased to announce that in September
those of the Company's GB storage assets that participated in the
actively-traded GB power markets generated revenues nearly two
times their September forecasts. This is due to increasing GB
prices and price volatility and the ability of the Company's
storage assets to respond to the opportunities that the current
market presents; which conditions are expected to continue in the
short-term [1] .
September was a strong month not only for Great Britain's energy
markets and but more widely across Europe, with record power prices
recorded in both the UK and Europe. Increasing price levels are
expected to continue through October and beyond, driven by rising
natural gas prices, limited gas storage capacity, low wind
conditions, colder temperatures and increasing demand as winter
approaches and economies recover. These conditions are also
increasing pricing volatility, creating power trading
opportunities. The Company's assets are among the most
technologically advanced and responsive on the UK and Irish grids,
and as such are well placed and capable of both filling needs in
the UK and Irish markets and benefitting from the increased
volatility in the energy markets.
Dynamic Containment (DC) and Balancing Mechanism (BM) are two of
the main revenue streams that make up the Company's revenue
stacking strategy. Whilst DC is one of the National Grid's
frequency response services designed to be fast-acting after a
significant frequency deviation, BM is the platform used by
National Grid to buy and sell electricity from market participants
to manage system constraints and the overall energy balance in real
time. EirGrid, the electricity system operator in Ireland, offers a
similar balancing mechanism for the Irish Grid.
Prices in the UK Balancing Mechanism hit a record high of
GBP4,038/MWh in early September. The last time the market saw
similar price levels was in January 2021, shortly after a dramatic
jump to GBP2,750/MWh, which, at that time, was then the highest
level in nearly 20 years [2] . Similar trends could be observed in
the Irish market, where September imbalance prices reached
EUR4,680/MWh during evening peaks.
With increased pricing and volatility, several of the Company's
storage projects began trading in the GB markets, with the result
that September revenues for those projects were nearly two times
more than they were forecast to earn, had they relied on DC
revenues [3] . The Company notes that the industry consensus is
continuing volatility and high prices throughout the Winter, driven
by the factors described above and tight capacity margins relative
to peak demand. National Grid ESO has warned of tight margins due
to supply uncertainty, predicting a base case de-rated margin (the
amount of supply expected to be available against underlying peak
demand) of 4.3GW or 7.3%, the lowest in decades.
Such price volatility, rather than high base prices, is an
important driver of trading opportunities in energy markets, which
will benefit Gore Street as it is well-positioned to capitalise on
the trading opportunities that the market currently presents.
Alex O'Cinneide, CEO of Gore Street Capital, the Company's
Investment Manager, commented:
"It is a critical time for the energy infrastructure systems of
the GB and Irish grids as they continue to face new challenges to
deliver consistent energy supply, and meet our important
obligations towards further onboarding intermittent sources of
renewable power. We are only at the start of the growth curve in
our industry, as energy storage continues to play an increasingly
vital role in balancing energy systems.
Gore Street's portfolio of technologically advanced assets
uniquely combined with our in-house expertise of engineering and
energy markets, means that we are well positioned to capitalise on
the highly attractive pricing available for our services, just as
we did when we took first mover advantage and moved our GB
portfolio into Dynamic Containment contracts during Q3 2020. We
will continue to monitor closely the situation in the energy
markets going forward over the Winter months and shall optimise
revenue stacking strategies to create additional value for our
shareholders."
For further information:
Gore Street Capital Limited
Alex O'Cinneide / Maria Vaggione Tel: +44 (0) 20 3826 0290
Shore Capital (Joint Corporate Broker and Joint Bookrunner)
Anita Ghanekar / Rose Ramsden /Iain Sexton (Corporate Advisory) Tel: +44 (0) 20 7408 4090
Fiona Conroy / Henry Willcocks (Corporate Broking)
J. P. Morgan Cazenove (Joint Corporate Broker and
Joint Bookrunner)
William Simmonds / Jérémie Birnbaum (Corporate Tel: +44 (0) 20 7742
Finance) 4000
Buchanan (Media enquiries)
Charles Ryland / Henry Wilson / George Beale Tel: +44 (0) 20 7466 5000
Email: Gorestreet@buchanan.uk.com
JTC (UK) Limited, Company Secretary Tel: +44 (0) 20 7409
0181
Notes to Editors
About Gore Street Energy Storage Fund plc
Gore Street is London's first listed energy storage fund and
seeks to provide shareholders with a significant opportunity to
invest in a diversified portfolio of utility scale energy storage
projects. In addition to growth through exploiting its considerable
pipeline, the Company aims to deliver consistent and robust
dividend yield as income distributions to its shareholders.
The Company targets an annual dividend of 7.0% of NAV per
Ordinary Share in each financial year, subject to a minimum target
of 7.0 pence per Ordinary Share. Dividends are paid quarterly.
Disclaimer
This announcement has been issued by, and is the sole
responsibility of, Gore Street Energy Storage Fund plc (the
"Company").
This announcement is for information purposes only and is not
intended to and does not constitute or form part of any offer or
invitation to purchase or subscribe for, or any solicitation to
purchase or subscribe for shares in any jurisdiction in which such
an offer or solicitation is unlawful.
The information and opinions contained in this announcement are
provided as at the date of the announcement and are subject to
change without notice and no representation or warranty, express or
implied, is or will be made in relation to the accuracy or
completeness of the information contained herein.
The information in this announcement may include forward-looking
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and projections about future events and trends or other matters
that are not historical facts and in certain cases can be
identified by the use of terms such as "may", "will", "should",
"could", "expect", "anticipate", "project", "estimate", "intend",
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variations thereof or comparable terminology. These forward-looking
statements, as well as those included in any related materials, are
not guarantees of future performance and are subject to known and
unknown risks, uncertainties, assumptions about the Company and
other factors, including, among other things, the development of
its business, trends in its industry, and future capital
expenditures and acquisitions. In light of these risks,
uncertainties and assumptions, the events in the forward-looking
statements may not occur and actual results may differ materially
from those expressed or implied by such forward looking statements.
Given these risks and uncertainties, prospective investors are
cautioned not to place undue reliance on forward-looking
statements.
[1] There can be no guarantee that the current pricing and
market trends will continue.
([2]) There can be no guarantee that the current pricing trends
will continue.
[3] Based on unaudited figures. No statement in this
announcement is intended as a profit forecast or estimate for any
period.
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