Gore Street Energy Storage Share Discussion Threads

[daveoz1] 04/2/2024 14:45

This is the attitude to battery energy storage of my marvellous Tory MP, Greg Smith: "I have formally objected to the Statera battery storage installation in Granborough which would devastate the landscape, take away food producing land and bring yet more construction misery to local communities." 'construction misery' eh, ... can't have anyone helping the planet and actually BUILDING anything, can we?!!
If you want to really spoil your day, you can read his 5-page letter to the Bucks planners:
hxxps://www.gregsmith.co.uk/sites/www.gregsmith.co.uk/files/2024-02/Greg%20Smith%20MP%20Statera%20Objection.pdf

[scruff1] 04/2/2024 14:26

Just spotted this in the local press


Plans to build an electricity storage plant on former football pitches in Westhoughton have been put forward.

[scruff1] 04/2/2024 14:16

George
There's next to no chance of following GRID and HEIT who really had no choice

[fordtin] 04/2/2024 12:49

Only three weeks ago;

“10 January 2024
Gore Street Energy Storage Fund plc “

“ the Company aims to deliver consistent and robust dividend yield as income distributions to its Shareholders.”



Alex O'Cinneide, CEO of Gore Street Capital, the Investment Manager of the Company, commented :
".... Looking ahead, we anticipate the Company's most pivotal year yet with operational capacity scheduled to expand to over 800 MW, including 200 MW coming online in the Company's fifth market to date; potential capital recycling; and a strengthening dividend cover from a diverse source of revenue streams. The Company is poised for significant growth and we look forward to updating the market regularly as these plans progress."

[george stobbart] 04/2/2024 12:18

Probably RNS tomorrow morning by GSF on dividend policy.

If they reaffirm we should expect a relief rally.

If they follow the herd GRID/HEIT and cut or postpone, say goodbye to the 60p and will dip in the 50s

[waterloo01] 04/2/2024 09:51

Liberum analyst Alex O’Hanlon recognised that danger but thought it was all priced in. ‘While the revenues in GB remain weak, and we preferred GSF due to its geographic diversification given the expected short term issues in the GB market, we think the market has now overreacted to the weak revenues which presents a buying opportunity.

‘We think the entire sector remains overly discounted (at a c.56% discount to NAV) due to the ongoing problems with the ESO and we expect these discounts to narrow as the revenue environment improves and helped by anticipated interest rate cuts in 2024.’

[rogerrail] 03/2/2024 16:08

Oops, I meant GORE not GRID.

[waterloo01] 03/2/2024 12:22

Luckily GSF has already raised the capital to fund the build out and doubling capacity this year.

Energy storage also attracts very different valuations, esp in the US where much of the capacity build is this year.

[spectoacc] 03/2/2024 11:36

Capacity is partly why there's this current (no pun intended) mess tho, and as much as I think GSF is far and away the best player, they've still got what, 18% in the UK?

The cost of capital is surely going to go up from here for the battery co's.

[waterloo01] 03/2/2024 11:29

Depends. If they reach full divi cover this year and it increases year on year as they bring on more capacity, then it could well move back to a premium to NAV.

[spectoacc] 03/2/2024 11:26

Ultimately, is it cyclical (temporary BESS bump), or is it structural.

Most of us would say it's a temporary bump, but how large a bump, and what happens to the weaker players.

Reminds me a lot of 20+ years ago and fibre optic cable co's. Was as cheap to lay 3 on the seabed as 1, and what should have been a licence to print money quickly became a licence to lose it, with most of the major players going into restructuring.

Years later, as the internet hoovered up capacity, they became valuable assets. But the original capital providers/shareholders weren't the winners.

Not sure that applies to battery storage really, but what is clear is that it isn't the safe investment punters thought, and now needs a decent discount even if it's sunny days from here.

[george stobbart] 03/2/2024 10:07

With what money? GRID can’t even pay their own dividend and they are suspending projects to live another month

[scruff1] 03/2/2024 07:58

Specto - I thought the article explained pretty well how they got it wrong or at least what conspired to bring them down - although we have all discussed pretty much the same ad nauseam and we know that if GSF miss the dividend cover and fail to pay it the the same fate awaits us though obviously we are in a better position. Interesting that they speculate on a takeover of HEIT. If one did occur it would be a vote of confidence in the future of the sector. I dont have enough confidence in it to take a punt on HEIT though even though it probably is oversold. Having said that looking at the chart GSF is hardly a mile behind em

[waterloo01] 02/2/2024 19:42

If the UK market recovers in the next few years, there are some fairly cheap assets out there currently, given the NAV discounts esp on GRID. Someone should consolidate the sector maybe?

[spectoacc] 02/2/2024 19:31

Thanks @scruff1, just read it but must admit leant nothing new from it, other than HEIT still being committed to pay 8p per year, seemingly out of capital by selling things. Lol.

[yump] 02/2/2024 19:21

Batteries are a relatively new area. I suspect that the usual suspects - investment managers and BOD’s, have experience in managing well-established income generating assets.

But not in anticipating or even planning well for changes in this new market.

Financial managers are not the first people I’d choose to manage anything where business developments contain unknowns that may be unpredictable.

More fool me for not thinking about that before and buying some HEIT.

Some of them will have been able to adapt and some not, presumably thinking that its just a different form of property asset and rental management.

[scruff1] 02/2/2024 18:40

Specto - read the citi wire article

[alan pt] 02/2/2024 17:06

Something structural could be V2G/V2X, especially combined with solid state batteries, but that's at least 5 years away at scale

GRID seems to be going from bad to worse - their answer to poor revenue in the UK is to suspend work on their new US asset to save money???

[spectoacc] 02/2/2024 14:59

Thanks @smidge21, albeit "co that diversifies revenue says revenue diversifying is good (& uncorrelated)".

My fear, perhaps unfounded, would be something structural, and not limited to one market at a time. What does that do to the investment thesis.

GSF by far the pick of them, but how could HEIT/GRID get it so wrong?

[scruff1] 02/2/2024 14:42

Article in city wire about GRID, HEIT and GSF - mainly HEIT but a good synopsis of the BESS situation in the UK

[smidge21] 02/2/2024 14:41

(From Company)

[smidge21] 02/2/2024 14:41

"Regarding your questions on dividend and revenue (durability), we believe energy storage revenues are cyclical, and in each of the markets we are active in, we see seasonal variation and periods of higher and lower revenue generation. The typical variation we see in each market is shown on the graphic below and available on page 12 of the Company's interim presentation here. As well as the seasonal variation, broader moves in markets can occur, such as the current dynamics we are seeing in GB. This cyclical nature of the industry highlights the importance of portfolios being diversified across different markets, which, while sharing the same investment thesis, are, in fact, uncorrelated. The Company included in its Interim results a regression analysis, which compared GSF's GB revenue data from the Company's inception with that from its diversified fleet. The analysis showed the standard revenue deviation per quarter amounted to £4.95 per MW/hr. In the analysis of the consolidated fleet, which includes assets in Ireland, Germany, Texas, and GB, the quarterly standard deviation of revenue dropped significantly to £ 2.68 per M/hr. This reduction of approximately 50% (post-FX) showcases the tangible impact of diversification on revenue stability and, thus, a Company's ability to sustainably pay dividends to its investors. For further details, please see page 13 of the Company's interim report

[leadixon] 02/2/2024 13:52

appreciate the update Cocopah - good work