Gore Street Energy Storage Share Discussion Threads

[llef] 18/1/2024 12:50

Mirandaj,

Thanks for the energydashboard link.

As you say, it's very informative, I was completely ignorant of the nature and size of embedded generation.(I thought that all solar and wind farms connected to the grid via the transmission level).

Looking at tomorrow's hourly energy prices, I see that between 2am and 4am its under 60 pounds per MW, and between 7am and 9am its over 87 pounds per MW.

Does anyone know if 27 pounds is a sufficient difference for battery storage and release to be profitable?

hxxps://www.nordpoolgroup.com/en/Market-data1/GB/Auction-prices/UK/Hourly/?view=table

cheers

[mirandaj] 18/1/2024 12:03

An important difference between transmission and distributed level generation is that National Grid (NG) ESO has visibility of the transmission generation through real time metering, but not at the distribution level. Embedded generation now accounts for a large proportion of the overall capacity of the electricity network (currently around 29%) and comes mostly from solar farms, smaller (onshore) wind farms and single wind turbines, combined heat and power (CHP) plants and (increasingly) battery / lithium ion storage. Small generators which are used intermitantly to meet peak demand, are also types of embedded generation e.g. diesel generators.



"Data sources" information is very interesting if not already seen.

[cc2014] 18/1/2024 10:12

thanks for that Cocopah. You've got me thinking now. I seem to remember the companies declared position is a target dividend of 8% of NAV. I wish I could find where I read that but right now it escapes me.

I do think that's a bit mad until they've got all the assets substantially deployed but if they decide to go for it now I shan't turn it down.

With regard to the NAV for the next quarter we already know the revenue is flat and that all other things being equal the NAV is likely to be around 120p due to the impact of a falling discount rate as 10 year gilts/treasuries have fallen around 50 basis points since the end of September.

Possibly there might be some mitigation from long term energy forecasts coming down which might bring it back to say 117p but regardless it will be going in the right direction.

[cocopah] 18/1/2024 09:09

#CC2014 … it’s not my thoughts on the dividend reaching 8p, it’s the company’s declared position, assuming that NAV is above £1.14 for a period of 12 months. Despite the latest setback to £1.12, any improvement takes us closer to that average which is why, as an income investor, I am always focused on it.

Separately, I completely agree that we need to understand if they are in a position to cover the dividend or any increase in it, which is why clarity is needed on net income. That was one of the points I made on my original post to say that at present it is not crystal clear what the income is and therefore whether the dividend is/will be covered in 2024.

[cc2014] 17/1/2024 12:03

I'm sure if past form is anything to go by, Gresham House will be writing their best RNS right now to try and support the share price.

[spectoacc] 17/1/2024 11:55

GRID certainly looking the less healthy one today.

[waterloo01] 17/1/2024 11:23

Back to 30% discount to NAV and 9.8% yield at 77p

[rjmahan] 16/1/2024 22:35

They shouldnt develop anything when price

[alan pt] 16/1/2024 11:06

For me, top down works better than stressing about the details here

It's well financed, well diversified and at this price giving almost a 10% divi (with more reliable cover coming as assets buildouts continue to complete)

With the bonus that, when IT discounts generally close, as they will at some point, there is a nice share price profit waiting

[cc2014] 16/1/2024 10:23

#837
I am not going to disagree that 90% of our investment trusts could do a better job of making forward guidance easier to understand for us retail investors.

They don't though. They have their reasons and aren't going to change. The game is rigged against us. Always has been and always will be.


I consider your thoughts on the 8p dividend to be premature. The current dividend is barely covered or uncovered or covered some quarters but not other depending on seasonality factors. Revenue uplift in 2024 looks minimal but explodes in 2025. We may have to wait until then, although the institutions are so greedy for dividends GSF may be persuaded to raise it anyway.

[cc2014] 16/1/2024 10:13

#835

Figure 6 is interesting.

The annual demand forecast for stationary storage for 2024 is 2GWh
The same thing for 2026 is 4.2GWh

Modoenergy shows the installed capacity now at 4.6GWh. I.e. double what we need now and already enough to go right through to 2026.

So, Kilmarnock is not needed. The demand will exist but the capacity has been built 2 years early.

[cocopah] 16/1/2024 09:35

#cc2014 you can be as dismissive as you want to be, but the fact remains that communication is not good and not clear. If income is X then say it is X and more importantly give some indication if next quarter it’s likely to be Y.

If GSF believe it is possible to give indication about 2025, then it’s possible to do so for the next quarter! Given that the CEO has a ton of skin in the game it is quite bewildering.

Being straight about the income received and relating it to dividend cover is key to reducing the discount. Forward guidance is the most critical comms as I have already posted before. They did mention the NAV recently but having reduced it, I don’t want any nasty shocks moving forwards … really we should be looking at 8p.🤷‍♂️

[scruff1] 16/1/2024 09:28

I dont think they should develop Kilmarnock. They have enough on their plate in Ireland !

[fordtin] 16/1/2024 09:05

CC2014 – re; “If GSF had any sense (imho) they would pull the Kilmarnock projects”

If companies like GSF cancel proposed projects, it’ll really throw a spanner into the Government’s forecasts. The demand will still be there even if the capacity isn't.

Department for Business and Trade
UK Battery Strategy
Published November 2023

“Beyond electric vehicles, the energy storage sector for grid balancing is showing increasing demand projections globally (100) and domestically.(101) As shown in Figure 6, demand is due to rise to nearly 10GWh by 2030, and double to 20GWh by 2035. The Government has supported the development of BESS through innovation competitions such as the recent longer duration energy storage demonstration (LODES), which made £69 million of capital funding available to start-ups and was open to novel battery technologies.(10)”

see page 25, Figure 6: UK Annual Demand Forecast for Stationary Storage (GWh by Year)



p64 - "They estimate that BESS could provide 10-20GW of capacity to the UK grid by 2030, and 30-35GW by 2050,"

[cc2014] 16/1/2024 08:51

I've been wondering whether to post for days.

As Melody points out you know the £ per MW hour and the capacity so you can work out the revenue in about 30 seconds. Indeed since the price per MW hour is the same for the quarter as the previous half year you could take the published revenue for the half year, halve it and add a bit. It's hardly time consuming or difficult.


I'm more focussed on where GSF is going. We know they've stated the Texas summer revenue which was massive is likely to be repeated in 2024 and 2025. I don't know how they can look as far ahead as 2025 but if I believe them then the 200Mw Big Rock project they will building now which is due for completion in Dec 2024 will be a money printing machine at least for one year as it will take their installed capacity in Texas from 30 to 230. For info Texas revenue was £140MW/hr for the Sept qtr end vs about £15MW/Hr in the UK. One could exaggerate that the UK revenue on this basis becomes almost irrelevant.

What I also want to understand better is the likely revenues coming out of their other US projects. I know the grid is in a bad place over there both in terms of the grid and generation capacity so my working assumption is the US looks a good place to be. Certainly the California project seems decent to me. I know nothing about about the power situation in Dallas so I will have to trust GSF on that one.

Which leaves me with final thoughts about the UK where too much battery capacity has been brought on-line too quick and GSF/HEIT/GRID plus no doubt others continue to build more for another year until they run out of borrowing capacity. I suspect things aren't going to rebalance in 2024 as it will take some time for the extra wind to take affect. If GSF had any sense (imho) they would pull the Kilmarnock projects but since they aren't until 2026 they have time to do that if they wish.


All of which kind of brings me to the view that 2024 won't be an exciting year for GSF in terms of revenue and profits, but 2025 will bring a massive step change.

[cocopah] 16/1/2024 07:13

#scruff1 in the short-term (next 6-12 months) I think we will see the benefits of additional capacity and additional revenue streams. I am hopeful that they will improve clarity of comms too … #melody9999 makes good points but investors shouldn’t have to dig for the numbers and forward guidance is always helpful.👍
27995;😎

[scruff1] 15/1/2024 18:58

Coco
'I am a real fan of this company'. Good man. Why? It cant be for the returns on investment. We are drifting back towards the ATLs. So far its all 'potential'. Its about time I could bank some. So far this year most of my holdings are only going one way - and yet they are full of potential. Bloody frustrating. I hate Hamas and Houtis as well as Russians and Iranians - and everyone else !!!

[mylands] 15/1/2024 18:02

waterloo1

It went ex div on Dec 28th when the share price opened at 91p, since then we have fallen 13p. With a div paid of 2p we have sunk 11p in just over two weeks, on no news.

That's what I call a hammering.

[cocopah] 15/1/2024 17:49

So frustrating to see the share price aimlessly drifting when better comms would be so helpful. Not sure how many of you are on LinkedIn but Gore Street have recently published a New Year update (4days ago). I took the opportunity to post the following:

“Great that £15.1/MW/hr achieved … but what was the capacity over the quarter … in other words what was the gross income in £s … otherwise the number is meaningless. Also good to know net income and if NAV still c£1.12. Does the 27% increase in capacity fall at the end of the quarter and therefore have significant positive implications for next quarter? So many questions investors would appreciate being answered.”

I would urge more of you to do similar and copy in the CEO. We need much better communication and information. As I have posted earlier, I am a real fan of this company but cannot invest any more whilst we continue to operate in the dark as investors.🤷‍♂️;🫣

[waterloo01] 15/1/2024 17:38

mylands, what are you talking about. It was paid out last week but next ex divi date is in March.

[melody9999] 15/1/2024 17:35

Thought the TU 100124 was positive and upbeat so surprised at the share price volatility given we have geographically diverse and stable revenue streams that will increase as capacity increases.

[mylands] 15/1/2024 17:11

Being hammered after it went ex-div.

[spectoacc] 15/1/2024 16:22

Excessive it really was. Trouble is, can now add in some more geopolitical strife.

Not convinced GRID is outperforming, depending on chart timescale. If anything it's retraced by slightly more.