Gresham House Energy Storage Fund Acquisition of Bloxwich Battery Storage Project (9676R)

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RNS Number : 9676R

Gresham House Energy Storage Fund

03 July 2020

3 July 2020

Gresham House Energy Storage Fund plc

(the 'Company' or the 'Fund')

Acquisition of 41MW Bloxwich battery storage project from Arenko Group and Pipeline Update

Gresham House Energy Storage Fund plc (LSE: GRID), Great Britain's largest operational battery storage fund, is pleased to announce that it has completed the acquisition of a 41MW operational energy storage facility known as Bloxwich from a group of investors led by Arenko Cleantech ('Arenko'). This project was previously disclosed by GRID as the 'Potential Acquisition'. The acquisition increases the total capacity of operational utility scale battery storage projects in the Fund's investment portfolio to 215MW.

The facility is located on the Bloxwich Industrial estate in Walsall in the West Midlands and was developed by Arenko and utilises their leading battery software and controls platform. Post-acquisition, Arenko will continue to operate and optimise Bloxwich, which has been acquired by the Fund for an initial value of GBP20.1 million, with further potential earnout payments.

Bloxwich was commissioned in July 2019 and operates in the Balancing Mechanism, European Power Exchange (EPEX) and other ancillary services markets, such as frequency response. In mid-May 2020, it was used to provide upward and downward reserve flexibility to National Grid in the UK's first-of-its-kind trial using an energy storage system ('ESS'). Existing upward and downward reserve services are typically provided by large Combined Cycle Gas Turbines and other thermal generation at a significant financial and carbon emissions cost to the UK grid. In essence, an ESS provides an exciting, more cost-effective source of grid flexibility and these systems are likely to be central to a zero-carbon emissions grid of the future.

John Leggate CBE, Chair of Gresham House Energy Storage Fund plc commented:

"Bloxwich is a further step forward in our ambitions to build Great Britain's essential renewable power storage infrastructure. We're pleased to welcome Arenko, as one of our partners, to support operational management and trading optimisation at Bloxwich. With the operational portfolio now over 200MW for the first time, we continue to make progress executing on our 2020 plan, and we look forward to updating our shareholders."

Ben Guest, Fund Manager, Gresham House Energy Storage Fund plc said:

"We are delighted to have completed this acquisition . Arenko is one of only a handful of innovative and technically-capable operators and optimisers of energy storage systems in the market, as demonstrated by their recent announcements. We look forward to working with them as the market burgeons in Great Britain."

Rupert Newland, CEO and Founder of Arenko Group, added:

"This is a transformational deal for Arenko as it marks our transition from an asset owner to a software service provider. We see batteries and other flexible assets playing a meaningful role in the energy transition and believe intelligent AI software platforms will be a crucial enabler to unlock value from batteries globally. We look forward to working with Gresham House in helping them maximise the value of their assets in the future."

Operational Portfolio

 
 Facility               Location           MW    Acquisition date 
---------------------  -----------------  ----  ----------------- 
 Staunch                Staffordshire      20    November 2018 
 Rufford                Nottinghamshire    7     November 2018 
 Lockleaze              Bristol            15    November 2018 
 Littlebrook            Kent               8     November 2018 
 Roundponds             Wiltshire          20    November 2018 
 Wolverhampton          West Midlands      5     August 2019 
 Glassenbury            Kent               40    December 2019 
 Cleator                Cumbria            10    December 2019 
 Red Scar               Lancashire         49    December 2019 
 Bloxwich               West Midlands      41    July 2020 
---------------------  -----------------  ----  ----------------- 
 Current Operational 
  Portfolio                                215 
----------------------------------------  ----  ----------------- 
 

Pipeline Update

Minor delays due to COVID-19 restrictions mean the Wickham Market and Thurcroft projects are now expected to be completed by the end of Q3 2020. The Board anticipates any delay to be revenue neutral for the Company.

Both of these projects are battery-only sites, each with 50MW import/export capacity.

Following completion of these two projects, and the 10MW Glassenbury extension due to be commissioned in Q3 2020, the Fund will have 325MW of operational capacity and will be fully invested.

 
 Pipeline Project         Location           MW    Commissioning Date 
                                                    (1) 
 Wickham Market           Suffolk            50    Expected Q3 2020 
 Thurcroft                South Yorkshire    50    Expected Q3 2020 
 Glassenbury extension    Kent               10    Expected Q3 2020 
 Exclusivity Pipeline     Near Edinburgh     30    Expected Q4 2020 
  Project (2) 
-----------------------  -----------------  ----  ------------------- 
 Total Pipeline                              140 
------------------------------------------  ----  ------------------- 
 
 Total Portfolio and 
  Pipeline                                   355 
------------------------------------------  ----  ------------------- 
 

1) Expected commissioning dates are indicative and based on most recent conversations with relevant Distribution Network Operators (DNOs) and assume no further commissioning delays due to COVID-19 personnel availability.

   2)       To be acquired subject to funding. 

For further information, please contact:

 
Gresham House New Energy 
 Ben Guest                        [phone] 
Jefferies International Limited 
 Stuart Klein 
 Neil Winward 
 Gaudi le Roux                    [phone] 
KL Communications                 [e-mail] 
 Charles Gorman                    [phone] 
 Camilla Esmund 
 Alex Hogan 
 

About the Company and the Manager:

Gresham House Energy Storage Fund plc owns a portfolio of utility-scale operational energy storage systems (known as ESS) located in Great Britain. The portfolio has a total capacity of 215MW. The Company is managed by Gresham House Asset Management Limited under the leadership of Ben Guest. The Company was admitted to trading on the London Stock Exchange (Specialist Fund Segment) on 13 November 2018 having raised GBP100 million of gross proceeds from investors. Including issuance under the Placing Programme, it has now raised a total of approximately GBP238 million of gross proceeds from investors.

The Gresham House New Energy team has a proven track record in developing and operating energy storage and other renewable assets having developed 124MW of Energy Storage Systems and approximately 290MW of predominantly ground-mounted solar projects. Gresham House Asset Management currently manages 207MW of solar and wind energy projects.

Gresham House Asset Management is the FCA authorised operating business of Gresham House plc, a London Stock Exchange quoted specialist alternative asset manager. Gresham House is committed to operating responsibly and sustainably, taking the long view in delivering sustainable investment solutions.

www.greshamhouse.com

Definition of Utility-scale battery Storage Systems

Utility-scale battery storage systems are the enabling infrastructure that will support the continued growth of renewable energy sources such as wind and solar, essential to the UK's stated target to reduce carbon emissions. They can store excess energy generated, primarily, by renewable energy sources and can then release that stored energy back into the grid during peak hours when there is increased demand, and/or when renewable generation is at a low.

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July 03, 2020 03:02 ET (07:02 GMT)