TIDMGSF
RNS Number : 1182F
Gore Street Energy Storage Fund PLC
06 July 2023
6 July 2023
Gore Street Energy Storage Fund plc
(the "Company" or "GSF")
Portfolio and Trading Update
Energisation of 79.9 MW asset scheduled for July, trading update
and a potential increase to ITC
Gore Street Energy Storage Fund plc, the internationally
diversified energy storage fund, is pleased to announce the
scheduled energisation of its 79.9 MW asset, "Stony", a positive
portfolio update and potential qualification for increased ITC
benefit for its US assets.
Energisation of 79.9 MW asset
The Company is pleased to announce that the energisation process
of the Stony asset in Milton Keynes, GB, with a capacity of 79.9
MW, has been scheduled with National Grid ESO to begin on 31 July
2023. The process is expected to take up to two weeks to complete.
Once operational, the asset will bring the Company's total
operational portfolio to 371.5 MW.
Operational assets: revenue performance
01.01.23 - 30.06.23 GBP / MW / hr GBP / MWh / hr
GB average (1-hour system
duration)* 6.83 6.92(1)
-------------- ---------------
GB average (2-hour system
duration)* 8.20 4.10
-------------- ---------------
GSF GB average* 7.62 8.59
-------------- ---------------
*Based on Modo Energy data; Note (1) - classification for 1 hr
system duration may differ slightly from exact integer value
Based on data provided by Modo Energy, the Company's Great
Britain (GB) assets generated an average revenue of GBP7.62 / MW /
hr for the 6-month period from January - June 2023. This compares
favourably to the GB average for a one-hour system, which was
reported to be GBP6.83 / MW / hr during the same period. Two-hour
systems were reported to have generated, on average, just 7.6% more
per MW than the Company's average during this period. Given the
material increased capex required to build the additional duration,
this supports the Company's view of optimal duration in this
market.
As the GB market faces increased saturation and declining
prices, portfolios solely dedicated to this market are experiencing
decreasing revenues. The Company has effectively offset this impact
through the strong performance of its international assets.
The Company's Irish portfolio, with a capacity of 130 MW / 72.6
MWh, generates the majority of its revenues from the DS3
(Delivering a Secure Sustainable Electricity System) program, which
is Ireland's ancillary services market. This program was
established to integrate non-synchronous generation, led by wind
power, and rewards assets for their availability during periods of
heightened grid volatility caused by System Non-Synchronous
Penetration (SNSP).
From 01 January - 31 March 2023, the Company's operational
Northern Irish assets, Drumkee and Mullavilly, played a significant
role in driving revenue for the portfolio. They achieved an average
revenue of GBP24.60 / MW / hr across the quarter. This high level
of revenue was due to increased SNSP and strong asset-wide
availability.
While Irish revenues declined as weather conditions stabilised
and moved out of the winter months, extreme weather conditions in
Texas resulted in a surge in revenues from the Company's
operational portfolio in the ERCOT market from 01 April - 30 June
2023. Heatwaves experienced in the state caused power prices to
spike; as a result, the Company's assets generated an estimated
hourly average of $175 / MW / hr between 18 - 21 June 2023. In
managing this volatility, the demand for energy storage enabled the
Texas portfolio to deliver estimated average revenues of $14.76 /
MW / hr for these three months.
In addition, the Company is pleased to announce that it has
formed two new engagements with Tenaska and Enspired. These
companies provide route-to-market services for the Company's assets
in the US and Germany, respectively. Since establishing these
relationships, the Company has achieved cost savings and gained
access to additional revenue streams.
ITC benefit increased for US assets
The Investment Tax Credit ("ITC") forms part of the $369bn
energy security and climate change initiatives available under the
recently introduced US Inflation Reduction Act (IRA). This enables
asset owners to deduct a percentage of the total cost of qualifying
renewable energy projects from their federal taxes, including
energy storage technologies.
Under the IRA, a basic tax credit of 30% is available, and
additional ITCs can be obtained based on specific requirements. Per
the 2022 unemployment data published by the Bureau of Labour and
Statistics (BLS), the sites: Dogfish, Wichita Falls, and Mineral
Wells (combined 95MW) all qualify for 40% ITC, provided that
unemployment rates in these regions remain equal to or higher than
the national average. This additional 10% ITC adder has yet to be
factored into the assets' underwriting and represents a significant
potential upside for shareholders.
Alex O'Cinneide, CEO of Gore Street Capital Limited, the
Company's investment manager, commented:
"The continued strength of the Company's international portfolio
further cements the success of our diversified strategy.
While GB has proved fruitful ground since the Company's IPO five
years ago, we have anticipated for some time that market saturation
will lead to a decline in GB revenue. The Company's decision to
extend its portfolio across Ireland, mainland Europe and the US was
driven by this foresight, and the performance of our entire
portfolio illustrates the sound judgement of both the Company and
the Investment Manager.
As well as currently benefiting from access to 19 revenue
streams across four uncorrelated markets, the Company's established
presence in the US means we are able to benefit from the positive
legislative environment set by the Inflation Reduction Act.
These benefits will support the continued build-out of our
construction portfolio, and we're delighted to have received a firm
date for the energisation of the Stony asset. Building scale
remains a key element of our strategy, with this site forming the
first of over 500 MW the Company is set to bring online by the end
of 2024."
For further information:
Gore Street Capital Limited
Alex O'Cinneide / Paula Travesso Tel: +44 (0) 20 3826
0290
Shore Capital (Joint Corporate
Broker)
Anita Ghanekar / Rose Ramsden / Tel: +44 (0) 20 7408
Iain Sexton (Corporate Advisory) 4090
Fiona Conroy (Corporate Broking)
J.P. Morgan Cazenove (Joint Corporate
Broker)
William Simmonds / Jérémie Tel: +44 (0) 20 3493
Birnbaum (Corporate Finance) 8000
Buchanan (Media Enquiries)
Charles Ryland / Henry Wilson / Tel: +44 (0) 20 7466
George Beale 5000
Email: gorestreet@buchanan.uk.com
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 an 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.
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END
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