Gresham House Energy Sto... Share Discussion Threads

[nickrl] 25/7/2022 13:21

marktime as i say in the short term GRID are doing very well in all frequency response services to NG and probably pulled in over £5m in revenues for June alone. They are generally biggest daily supplier of dynamic containment services which is directly correlated to the amount of wind penetration. Whilst there are plenty of new wind projects in build the amount of generation, ignoring wind levels, is going to be static for next 18-24mths before the allocation round 3 projects start commissioning so wind penetration won't change that much in the generation mix. Also wind is far higher in the over generation mix in summer months which lowers the system inertia due due to lower demand. so frequency response services are higher. In parallel with this is the build out of BESS is ongoing and the amount connected to the system will double over next 12mths which will result in downward pressure on the auction prices for frequency response services. Furthermore there is lot of development going on in BESS with close to 10GW consented although how much of this translates into formal build will only materialise over time. One thing that could help here of course is both price and supply issues may well lead to suppressing the rate of future growth for some years ahead that the spare BESS capacity soon gets utilised by the wind projects already in build. So i see an element of marking time her over next 12-18mths until there is more clarity.

[marktime1231] 25/7/2022 11:01

GRID will also do well in the long term, by expanding significantly, if this forecast of demand is right ...



... where does your idea that the market is prospectively saturated come from? Our ability to balance the grid at peak demand periods is becoming more critically dependent on energy storage systems, not less. The problem is getting worse because generation is increasingly from intermittent sources.

GRID has made a superb start in capturing the market, it has been so well financed and managed it has gained competitive advantage over rivals and new entrants to the market. Its expansion plans are not over-ambitious and are almost self-funding, it seems reasonable to look to maintain a roughly 25% market share.

Future development needs to pay attention to the quality of income as much as NAV though. It needs to up-scale its projects, get involved at an earlier stage, extend the storage duration, and get smarter at optimising income opportunities. It is doing all those things.

There are headwinds and threats of course. Like anti-capitalist govt/OFGEM measures to stop private sector providers who have invested in unsubsidised schemes from exploiting energy market opportunities; alternative storage technologies; super-major energy companies entering the market at scale; supply chain and execution issues delaying timescales to commissioning; and so on. Expanding in an expanding market is not one of them.

[hpcg] 23/7/2022 11:04

I sold these last week and moved into GCP. This isn't making headway on the dividend front and i don't know if the NAV performance can keep up.

[nickrl] 23/7/2022 10:34

GRID will do well in the short term especially over summer with high solar penetration needing more dynamic containment services but this market is getting saturated with assets being added monthly although delays in the supply chain will slow down rate of growth for a while.

Don't like the way they keep adding to the share count and would like to see them just consolidate what they have in the pipeline.

[phillipsy] 12/7/2022 10:00

I have a few friends who work at quite a high level at BP and they have informed me that Bp are looking at investing in Renewable companies and GRID are quite high on there list. Can they make a bid for the whole company as it is an Investment Trust or do they just purchase as many shares that are available?

[frederickbloggs] 06/7/2022 16:58

There's bargains everywhere you look at the moment. I am sticking with GRID. But the temptation to take profits here and reinvest elsewhere for a higher yield and more share price appreciation is very, very tempting.

[pavey ark] 06/7/2022 10:14

Sold more this morning....now sold c.33% of my holding (102p average).

Bit miffed at the lack of progress on dividend and feel that the rapid expansion (large number of shares issued) is something to watch.

GRID may have lost first mover advantage but still prepared to leave the remainder in my income/renewables portfolio.

[notbitcoin] 22/6/2022 14:11

It seems like the big boys are buying in

[notbitcoin] 22/6/2022 14:09

Top up today I was hoping it would come down. But i will top up next time on downs

[frederickbloggs] 10/6/2022 11:05

Agree with the sentiment here. One of my better recent-ish holdings, bought in at 103p and hold for the long term. I also bought Harmony Energy Income Trust at launch and I hope for more of the same there. Harmony are partnered with Tesla which I hope eases the battery supply issues as they ramp up their projects.

[igoe104] 10/6/2022 10:55

Totally agree gents, this is a great sector for many years to come.

I hold UKW, Trig, Grid. And s small cap company TGP which does cables and cable protection for wind warms. Happy to hold all four for many years to come.. in 10 years or so, they should all benefit big style...

[battyliveson] 10/6/2022 09:53

Thank you Pavey Ark.

I am targeting 20% of SIPP in storage and renewables. I will have a look at DORE and CORO.

Best wishes.

B

[pavey ark] 10/6/2022 09:33

BattyLivson,

I have number of renewables and agree that there is a very good investment case to be made (it also helps that I support the principles involved).
My view is that a 5% yield and a 5% capital gain makes a very attractive investment.

My renewables portfolio has done better than that but I expect things to settle down and move on at this rate.

Re: lithium ...you may want to look at DORE which is heavily into Swedish Hydro and Scandinavian wind ....I like their management team....no lithium issues as they store the energy in high reservoirs, they do have UK solar.

If you are really into renewables there is a rather strange one for you ...Coro.

On the face of it Coro is a gas company but changing to SE Asian renewables ...not an IT but certainly asset backed and IMO very cheap.
Although I get a bit of noise on the bb this company is moving to be a pure SE Asian renewables company.....big solar projects being set up (and wind)so you may have concerns over materials supply.

As a GRID holder I can see where lithium/battery supply may be a concern but the management here have always seemed one step ahead of the game.

[battyliveson] 10/6/2022 07:50

I would be interested holders thoughts here. I hold GRID and GSF along with BSIF and TRIG.

Given the growth in renewables I feel there is a good long term story here, albeit the premium is already high. My concern is that recent articles have suggested that a lithium shortage will hamper the growth of the sector, hence proposed roll-outs will be delayed.

I have briefly looked for a lithium etf and would have some passing exposure in BRWM.

B

[igoe104] 09/6/2022 06:56

Good to see Blackrock building a substantial postion...

[catch007] 27/5/2022 16:15

nickrl: Yes it's a concern shared across several Trusts - simply growing assets on the back of and not supporting investors e.g. ASLI. However GRID as you have noted seems well placed though not without challenges. GL

[nickrl] 27/5/2022 13:04

@catch007 im getting weary they are scaling up fast along with others and there isn't clear visibility from NG on the volume of frequency response services they will want and prices have already dropped back for the new dynamic services. The positive though is how much they can make on trading now especially as prices are probably now reset to a much higher level for at least next five years, unless there is a miraculous recovery with Russia, so thats the counterbalance. My view is divi growth will get crimped with the expansion of the share register but as you got in early that's not an issue.

[catch007] 27/5/2022 08:30

Been in since the start and happy to hold. Building scale and prospects look good imho.

[jonwig] 27/5/2022 07:12

GRID "has raised gross new proceeds of £150 million through the issue of 103,448,275 ordinary shares of 1 pence each in the capital of the Company. The Placing was significantly oversubscribed and a scaling back exercise has been undertaken."


That raises the total from 438m to 541m shares. They started with just 100m in November 2018. ("And we ain't finished yet.")

[marktime1231] 26/5/2022 10:31

Thanks jonwig, for some reason I missed one of the three rns yesterday which gave the key details. My observation was that there is no need to raise funds (too) far in advance of paying for the deal, eg keep the lag to income short, although of course early-stage investment increases the value add opportunity. Looking to GRID to balance the two priorities of enhancing NAV and improving net income.

The additional projects are a significant expansion of the pipeline, but mostly scheduled for 2023 and 2024. I wonder who the sellers are, Eelpower maybe and ? The immediate projects in the list Stairfoot and Project Y were, I thought, something GRID said was part of the reason for the 2021 fundraising?

The prospective end June NAV was already projected to 145p even though the end March NAV was printed at 131p. An issue price of 145p not much of a premium then, and a sharp discount to the share price which was heading for 155p. Plus a 4.8% yield, an easy corporate sell. If we want to take advantage we can buy some in the market ourselves at 148p.

Good that they are adding longer duration projects, and good that a conveyor of project commissioning will continue the process of uprating the NAV. Enhancing asset value and share price will please most people, we will just have to be patient and wait/hope for a corresponding improvement in income at some stage.

[jonwig] 26/5/2022 07:24

marktime - the RNS describes the pipeline which is already at an advanced stage.

catch - I agree that 145p is a bit rich, but their forecast might easily fill the placing with a scale-back. I suppose a lot of big holders (pension funds, say) couldn't buy big enough in the market and hence rely on placings.

[catch007] 26/5/2022 07:13

Paying well over NAV at 145p (despite the forecast NAV uplift) doesn't seem like a great deal to me.

[marktime1231] 25/5/2022 11:22

Secondary placings as and when required, no shortage of market demand but no point issuing stock to raise funds until actually required.

[hiddendepths] 25/5/2022 09:51

I suspect, spangle, that they feel they have a golden opportunity to massively scale up cheaply and that this window of opportunity won't last too long. It makes sense to establish the leading market position at this relatively early stage of what looks to be a high growth market for the next decade at least.

I also suspect that they want to be in a position to pounce on opportunities as and when they crop up - before a competitor, actual or prospective, can get their act together and turn them into auctions.

imho good management!

[spangle93] 25/5/2022 09:23

Plenty of shares to come

438 MM shares in issue

"The Company is implementing a Share Issuance Programme to issue up to 400 million New Shares over a 12-month period, including for the avoidance of doubt any New Ordinary Shares issued as part of the Initial Placing."

Shares related to today's announcement will be around 104MM

Does that imply another 3 similar raisings - and if today's 25% tranche funds the majority of the existing pipeline of projects, then how many more "ready to build" projects are actually viable.

Or was the "up to 400MM new shares" in case the price fell and more shares had to be issued to raise the desired total investment capital