Gresham House Energy Sto... Share Discussion Threads

[marktime1231] 14/3/2024 21:15

GSF was able a couple of days ago to announce a sustained 2p quarterly dividend, albeit one which appears to be only about 75% covered by current cash flow. They also took some NAV medicine by de-ramping their expectations for GB-based revenues, better reflecting the dire income in recent quarters. And yet the net movement on their NAV was only a shave down.

Has GRID been exposed by that release from GSF? Or has someone in the GRID camp whispered of a rotten report on its way by 5 Apr, and a painful cut to the dividend? Heads rolling perhaps because we have been misled and can't trust them any more?

GRID tumbling this afternoon but GSF ending firmly up.

[dickiehhh] 14/3/2024 18:41

As usual it looks like some "news" has been leaked out. Institutions probably selling. Let's wait for the RNS over the next two weeks to tell us private investors what's going on. Just like what happened earlier this year Shameful really

[cruelladeville] 14/3/2024 15:42

Good grief. What's happening now to GRID? I thought the worst was over. Obviously not.

[nickrl] 23/2/2024 08:28

@igoe Guest is right that BESS assets can hunt around the various revenue streams on offer at the push of a button but the CM revenue stream is the only certain one. As we've seen over last six months the value of those other revenue streams has dramatically collasped and with so many new BESS assets being commissioned its difficult to see any meaningful improvement. Lets see if their forecasts are more realistic against this backdrop.

[igoe104] 23/2/2024 07:55

battery energy storage systems (BESS), is pleased to provide shareholders with an update on the 2023 Capacity Market auction results for the portfolio.

 

The latest T-1 CM auction concluded on 20 February 2024, clearing slightly higher than expected at a price of £35.79/kW. The Company has secured additional 1-year contracts across 13 of its Projects with a total derated capacity of 90.491MW. In total, the additional contracts are expected to generate £3.2mn of additional revenue from October 2024 to September 2025.

 

In the valuation process for the Company's assets, CM revenues are only included where contracts are held at the date of valuation, therefore these new contracts are in addition to current revenue assumptions and are accretive to NAV. The NAV benefit from these contracts will be recognised at the next valuation date of 31 March 2024.

 

Ben Guest, Fund Manager of Gresham House Energy Storage Fund plc, said: "We're pleased with these results from the latest annual Capacity Market auction, as well as their expected positive contribution to our NAV from 31 March 2024.

 

"One of the great attributes of battery energy storage systems is their flexibility. We can swiftly and remotely configure our software to tap a wide range of potential revenues available to BESS without needing to make any physical changes to hardware. These revenues include both contracted income such as the Capacity Market auction results we're announcing today, as well as merchant, or trading, revenues."

 

[nickrl] 22/2/2024 21:40

@marktime people think it’s cheap but it’s not but won’t stop them buying so a dcb but let’s see how up front they are when fy results are released.

[marktime1231] 22/2/2024 17:18

From studying the ESO spreadsheet it seems GRID submitted around a dozen of its smaller BESS in to the T-1 Capacity Market auction, it will be up to management to tell us which were successful and what the financial impact will be. HEIT observed that the price struck was 40% lower than last year but higher than expected. The big winners appear to be larger longer duration BESS including new installations.

My conclusion is that this is neither here nor there for GRID, if it had been a windfall bonus we would have heard already because they are so desperate for good news.

Notably HEIT have renegotiated their group financing with a modest reduction in near term rate, presumably to help get them through the income slump. It remains to be seen when and how the sector will restore income to justify their current valuations. I don't see what is causing the recovery in GRID share price from 50p, in the same way I couldn't see why it recovered from 80p to 110p. Hopeful optimism and "bump in the road" thinking, because you have to and ...?

We should wait for solid evidence of financial performance recovery and bankable outlook, ignoring fanciful asset valuation, before concluding this has been oversold.

[igoe104] 22/2/2024 13:56

Prices were extreme last year, Nicholas. GRID are doubling their capacity, so at Current share price levels these look extremely cheap.

[nickrl] 21/2/2024 22:46

@igoe good amount securing contracts for sure but price well down on last years amount.

[igoe104] 21/2/2024 16:54

BESS wins highest percentage among clean energy technologies in UK Capacity Market auction

[nickrl] 16/2/2024 09:57

@igoe104 that article suggests it will favour the 2hr BESS operators which is HEITs province currently although GRID are modifying several sites to bring them up to 2hr capability. The wider issue remains that new capacity from multiple operators is coming on stream this year so downward pressure on pricing likely. Certainly a good trading week for GRIDs sp!

[igoe104] 16/2/2024 09:17

Changes from 1st of March. Could triple battery storage volume.

[nickrl] 14/2/2024 17:11

@CDV no there doesn't especially as HEIT made new closing atl

[cruelladeville] 14/2/2024 16:39

Very welcome rebound in share price today here. Doesn't seem any obvious underlying reasons?

[nickrl] 13/2/2024 20:23

So at one of the regular ESO webinars yesterday they confirmed that battery duration in the balancing mechanism will be switched from 15mins to 30mins duration on 1st March. This should help BESS providers as they will be able to nominate twice the energy levels as now which should encourage dispatchers to use them more. We will have to see what happens in a couple of weeks.

[nickrl] 12/2/2024 10:55

@bsdj Peel Hunt behind the curve aren't analysts supposed to ahead of the curve!

[bsdjj] 12/2/2024 10:38

Peel Hunt note on energy storage specialists.HEIT initiated UnderperformGSF initiated UnderperformGRID maintained Outperform

[hpcg] 11/2/2024 21:32

nickrl - I would say the same about REITs, MLPs and any other similar structure that doesn't have long term contracts. Shipping gets judged off conventional metrics and it is a similar capital heavy asset to income play. It is cyclical whereas the underlying assumption for property, batteries and pipelines is that they do not have a volatile income. It turns out that batteries price off a spot market just like a ship does and their income is just as volatile. That said I think we are arguing to agree. Yes, exactly what you said, the holding structure is the sum of all the actual operating assets. These either generate or consume cash, and they can pay the interest on their external debt or not.

As you say the current situation with the published accounts to June 2023 is quite misleading, but the share price should be a warning to anyone looking in that all is not well.

[nickrl] 11/2/2024 17:42

@wskill for sure changes to ESO systems may help drive up balancing mechanism revenue as the software upgrades are implemented. However, there is a tsunami of new batteries being energised this year and specifically some supersized installations, way bigger than what GRID/HEIT have, and suspect they will corner the market. Reckon we wont know till H2 whether the fundamentals have improved here.

@hcpg not sure of your logic here. The REIT is just a holding company for the MidCo which administers the opcos which own and operate the BESS. The REITs profits are based off the value of the assets which are pretty suspect given Gresham undertake the valuation i would suggest. You have to look back over last 12mths to see how wrong they've been on energy price forecasts to be suspicious this has been propped up. Follow the money which flows to the opcos who then pay interest and amortisation on the loans from the MidCo if they can afford it. The MidCo is financed by shareholder cash from the REIT and commercial loans. The latter have to paid but interest on the shareholder loan is flexible and can be waived. The MidCo needs to preserve cash for the build out committments currently and avoid taking on naymore debt than it has to. So not much left for the REIT except Gresham fees of course and cash for share buybacks. So where is the profit coming from?

The other thing to be wary of here come results is H1 wasn't too bad and its wasn't until Q4 that there was a significant decline in revenue generation. What we also need to see here is what assumptions Gresham are now using in valuing the opcos.

[wskill] 11/2/2024 12:43

By year end 2024 it will be a different story presently the ESO is constrained by the below.

An upgrade, planned for December 2023 but not operational until late January, allowed National Grid ESO’s systems to call on multiple batteries simultaneously. This is a good first step.

Fast dispatch (to launch in the next few months) will make it easier for the grid to call on multiple batteries more quickly – increasing their usefulness.

However, the final upgrade in late 2024 is needed to allow batteries to dispatch energy to the grid for more than 15 minutes at a time. This is key. Most of the time the grid needs power for longer than 15 minutes. Battery storage is usually set up so it can deliver power for an hour or two hours. However, the grid’s systems will not currently let it call on batteries for longer than 15 minutes

[hpcg] 10/2/2024 16:24

Podgtyed - I am with you 100%. This is a trading company all but legally and should be judged on operating profit, finance costs, return on equity, conventional book value and conventional depreciation. Dividend is irrelevant as it is just a pass through. Accounting NAV is irrelevant if one looks at trading profit and judges quality on trading returns on those assets. I haven't done a single one of the above yet so I have no idea if this is attractively priced or doomed, but just wanted to support your opinion about the sensible approach to financial analysis.

[cruelladeville] 08/2/2024 16:20

I can find no declared short positions in GRID stocks?

[genista71] 08/2/2024 16:00

They charge fees on a made up on a "NAV"..I really don't understand why Shareholdwers aren't kicking and screaming..The manager is robbing them blind