Gresham House Energy Sto... Share Discussion Threads

[cruelladeville] 12/11/2024 12:00

No question. But the government pretending we are increasing UK energy independence and security by increasing imports of both gas and electricity seems ridiculous. Only last year the French government threatened the Channel Islands with disconnecting their power supply over a fishing dispute. The Channel Islands had every right to do what they did but it didn't stop the threats from France.

[ppceh] 11/11/2024 19:09

Marktime

‘Octopus will be mindful that in two years time the cost of building or acquiring new BESS with longer duration could be cheaper than the current price of older assets which need augmentation and which carry a NAV which is only justified by an optimistic model of theoretical future earning potential.’

Does anyone know what % of new build cost is represented by the cost of the battery?

[cruelladeville] 11/11/2024 14:24

Seems to me it's only interconnectors keeping the lights on. Clock's ticking on the remaining nuclear fleet except Sizewell B. We are drifting ever closer to localised energy rationing. At which point we become a third world state.

[cc2014] 11/11/2024 13:37

The issue for me is that the RNS does not tell me what I want to know which is how much per MW/Hr are they getting and what the trend is. I also find it no coincidence that the positive news always comes out at certain times of the year. From here on in revenues per MW/Hr will fall for the next few months due to the weather.

Telling me that 2024 revenues will be greater than 2023 is already known and is a result of the greater capacity.

Yes, I can go and work out what I want to know to some extent but it's all a bit difficult because I don't know when the new assets became revenue generating (as opposed to energised) and I don't know which assets sit with Octopus.

I can see the BESS index though and that still shows lower prices now than a year ago. I think we get to the time of year now where we will really find out what's going on. Last year revenues starting falling from around now all the way to February

[marktime1231] 11/11/2024 12:09

Hmm well how about that, some trading detail albeit scant. I wonder what more Guest will have to say at the CM day.

So things could not have got any worse and they haven't. I remain suspicious the project schedule is slipping as it feels they are using softer language about when it will complete. And I don't buy the idea that power demand is rising from EVs or anything else, maybe at local grid level but certainly not at national transmission level, where demand decline and suppression is the only thing keeping the lights on now "excess" coal generation has been withdrawn. Nor am I convinced NESO is in any better position to exploit battery storage.

Are market fundamentals improving? Does he mean wholesale price, or something else?

[cruelladeville] 11/11/2024 10:23

Reasonable update today. I don't see any near term resumption of dividend payments though.

[marktime1231] 06/11/2024 21:19

Octopus are seeing how things go trading the daily energy cycle using third party assets. And may well have been behind the bid for a subset of assets which GRID say was close to NAV but was rejected anyway.

Octopus will be mindful that in two years time the cost of building or acquiring new BESS with longer duration could be cheaper than the current price of older assets which need augmentation and which carry a NAV which is only justified by an optimistic model of theoretical future earning potential.

It might even be cheaper to buy the whole of GRID at a 30% premium to the sp, and sell off any assets it doesn't want to clear debt.

I share nickrl concern we have no visibility in to trading and income performance.

[cruelladeville] 06/11/2024 20:56

One might imagine that buying GRID's assets would be in Octopus's interest. Cut out the middle man style of thinking. If GRID are turning a profit on serving Octopus, why wouldn't Octopus want to keep that margin for themselves?

[nickrl] 06/11/2024 19:21

GRID now have most of the assets siting outside the BM so no public visibility of how they are performing only when they deign to tell us and even that is pretty restrictive. Of course more assets that end up with Octopus the less this matters but being outside the BM restricts you to wholesale and frequency services the latter having proven to be of low value most of the year but had a good bounce back in October.

[willoicc] 06/11/2024 13:51

Here is the Energy Dashboard for anyone who might not already have it.

[marktime1231] 06/11/2024 11:35

There you go, some credit is due, GRID are making progress, albeit with slight slippage, but ticking the important box of having extra capacity online while prices are spiking. Up to 845MW now ... I wonder how close to "The Company looks forward to completing construction of its 1,072MW / 1,701MWh target portfolio [by end 2024]" promised in the interim report see page 11. Can't work out of the 494MWh due what is at risk because the rns doesn't say, Melksham and West Bradford are the big projects.

As ever it would be useful to have visibility of trading and price performance, but we have enough clues to know there have been opportunities which GRID should be taking advantage of. Still in the gutter but looking up?

[cruelladeville] 05/11/2024 18:24

Don't know why that post is truncated?

[cruelladeville] 05/11/2024 18:24

Someone needs to call Mr Millipede, ask him what to do. Wind generation is now

[nickrl] 05/11/2024 18:01

@CDV the gridwatch sites are showing nat grid transmission demand but there is also considerable embedded generation at distribution level which isn't counted so total demand is probably above 40GW. Most of the batts are embedded currently but the bigger ones coming on line will have to enter the balancing mechanism as there being connected at transmission level.

Anyhow if you believe Cornwall Insight (energy price forecasters) we just need to hold another year as batts should be earning around £100/MWh come 26/27!!

[...]

[cruelladeville] 05/11/2024 11:45

Thanks CC2014. 37 gigawatts is a fair load really given the mild weather. Grid load has quite often been in the low 20's region in the recent past. Snag with GRID and it's augmentations are that it all costs money and they can't raise any new capital. I am finding it hard to stay enthusiastic about BESS as investment trusts and with the benefit of 20:20 hindsight I'm kicking myself for not selling out at a premium. So far all I'm seeing now is reducing NAV, zero dividends and inability to grow the business.

[marktime1231] 05/11/2024 11:44

A good job it is staying mild or we would be running out of gas. Maybe we are, it is mainland Europe with abundant storage, the UK's storage capacity is still trivial despite partially reopening Rough. LNG tankers will be lining up, UK wholesale gas price soaring versus TTF.

Hang on .. doesn't the cost of gas for electricity generation set the price for everything else. So where is this going then, a price crisis? Or at least a good season ahead for all generators (and batteries)?

Provided we don't get another mild Winter that is.

[cc2014] 05/11/2024 11:19

I'm not sure I'm agree CdeV. It's the spread that matters and the spread arises when the UK power system is either under pressure due to too few renewables or too much.

As far as I can see the current low wind is giving batteries the chance to 2 cycle a day which should be leading to decent revenues.

However, day-time temperatures are mild so despite the low wind the load on the system isn't that large.


Having said all that I've turned more and more pessimistic about this sector long term. There's a decent video here from Modo which I'll summarise as saying that the price of new batteries keeps on dropping and therefore I don't really want to buy an asset which keep getting cheaper and cheaper to buy.

I think this may be why GRID are so reluctant to sell any assets and want to keep doing augmentations. It's all about scale and they risk getting left behind.

[cruelladeville] 05/11/2024 10:35

Wind doldrums continues. Right now wind + solar generation in the UK is just a bit more than 1 gigawatt combined. Total grid load 37 gigawatts. If it wasn't for international interconnectors, I think we'd have localised power cuts. Not much scope for BESS to benefit, the capacities are too small and the durations too short to make money?

[nickrl] 04/11/2024 19:31

Battery boys been smart today charging up midday ready to discharge at the evening peak when system price was 190/MWh. Good they can exploit renewable weakness as well as strength and despite some more assets coming on line annual prices holding reasonable firm last month.

[iaino] 04/11/2024 18:08

Marktime- Great info. What's the best source to follow UK elec usage? Is this a feed from natgrid?

[marktime1231] 04/11/2024 17:43

Another doldrum day, actually more solar power at peak than wind at its trough which is astonishing for a grey November at 53 degrees North. In theory this evening peak should be good trading for batteries, prices spiking as the UK is at the limit of available generation capacity. If GRID is participating with all resources that is.