Gresham House Energy Storage Fund Factsheet publication and quarterly NAV update (4641O)

TIDMGRID

RNS Number : 4641O

Gresham House Energy Storage Fund

30 January 2019

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Gresham House Energy Storage Fund plc (GRID)

30 January 2019

Factsheet publication and quarterly NAV update

Gresham House Energy Storage Fund Plc (GRID) (the "Fund") announces that its factsheet for the period ended 31 December 2018 is available at:

http://newenergy.greshamhouse.com/esfplc/

Extracted text of the commentary is set out below:

NAV update & operational highlights

The Fund listed, before fees and expenses, on 13 November 2018 with GBP100m of gross proceeds.

The Fund is currently ca.60% invested in five seed Energy Storage Systems ("ESS") projects, described below, and Gresham House Asset Management Limited (the "Manager") expects the remaining proceeds from the IPO to be fully committed in the first half of 2019.

As at 31 December 2018, the Net Asset Value ("NAV") of the Fund was 98.04p, taking into account net income, launch costs and costs associated with the acquisition of the seed assets.

The Fund's first dividend is expected to be declared in April and paid to investors in May 2019.

The Fund's ESS projects generate revenues primarily from Firm Frequency Response (FFR), Asset Optimisation (Trading), Capacity Market (CM) and other grid connection-related charges, including Triads. Revenues from the portfolio's seed ESS projects are currently skewed to FFR revenues, FFR being the provision to the National Grid of a dynamic response service to maintain the grid's electrical frequency at 50Hz. Over the coming year, operations are expected to be increasingly targeted towards Asset Optimisation, as this becomes the more profitable business activity. There are several additional revenue opportunities emerging for the portfolio as a series of regulatory changes are implemented.

The Manager has been actively working to earn as many of the three winter Triad payments available between November and February, as possible. To do this the Fund's ESS projects must generate during certain half-hourly peaks in demand over the National Grid. The Manager has hit the three potential peaks so far this winter. Triad revenues will be notified to the Fund during March 2019, once National Grid publishes its review of the 18/19 winter period.The Fund models a 66.6% success rate for achieving these peaks.

Portfolio activity & market outlook

The Fund's seed portfolio was acquired at the IPO in November, with an effective transaction date of 30 September 2018. The acquisition was for 70MW at a cost of GBP57.2m. The Manager is now focused on deploying the remaining cash raised at IPO.

The construction of the Fund's next project, Wolverhampton, a 5MW symmetrical battery project, is underway. Acquisition of this project will complete after commissioning which is expected to take place in Q2 2019.

During February, signing of an EPC contract for the next 50MW project is set to commence, for potential acquisition by the Fund in Q3 2019. Other pipeline projects are expected to follow over the coming months (see table below).

In order to build out the remaining pipeline of exclusive projects highlighted at the time of the IPO, it is our intention to raise additional funds in 2019 as part of the placing programme allowed under the Prospectus.

The Manager is of the view that the UK's exposure to renewable energy generation has increased significantly over the last few years and the pace has not lessened despite the removal of legacy subsidies to onshore wind and solar. This is largely because the development of offshore wind installations has continued apace. As a result, generation from wind is having a growing impact on the grid, generating a volatile supply of energy which underpins the opportunity for ESS.

Current portfolio

 
 Project        Location           MW   Site type                 Commissioning 
 Staunch        Staffordshire      20   Battery and generators,   Operational 
                                         net export 
               -----------------  ---  ------------------------  -------------- 
 Rufford        Nottinghamshire    7    Battery and generators,   Operational 
                                         symmetrical 
               -----------------  ---  ------------------------  -------------- 
 Lockleaze      Bristol            15   Battery, symmetrical      Operational 
               -----------------  ---  ------------------------  -------------- 
 Littlebrook    Kent               8    Battery, symmetrical      Operational 
               -----------------  ---  ------------------------  -------------- 
 Roundponds     Wiltshire          20   Battery and generators,   Operational 
                                         net export 
-------------  -----------------  ---  ------------------------  -------------- 
 Total                             70 
--------------------------------  ---  ------------------------  -------------- 
 

Pipeline

 
 Project (1)       Location           MW    Site type                 Commissioning 
                                                                       (2) 
 Wolverhampton     West Midlands      5     Battery, symmetrical      Expected Q2 
                                                                       2019 
                  -----------------  ----  ------------------------  -------------- 
 Wickham Market    Suffolk            50    Battery, net              Expected Q3 
                                             export                    2019 
                  -----------------  ----  ------------------------  -------------- 
 Hereford          Herefordshire      28    Battery and generators,   Expected Q3 
                                             net export                2019 
                  -----------------  ----  ------------------------  -------------- 
 Thurcroft         South Yorkshire    50    Battery, symmetrical      Expected Q4 
                                                                       19/Q1 20 
                  -----------------  ----  ------------------------  -------------- 
 Red Scar          Lancashire         49    Battery and generators,   Expected Q4 
                                             symmetrical               19/Q1 20 
                  -----------------  ----  ------------------------  -------------- 
 Littlebrook       Kent               5     Battery, symmetrical      Expected Q1 
  2 (extension)                                                        2020 
  (3) 
----------------  -----------------  ----  ------------------------  -------------- 
 Total                                187 
-----------------------------------  ----  ------------------------  -------------- 
 

(1) All projects are owned by Gresham House Group or are projects in which members of the Gresham House New Energy management team have an interest and exclusivity over the projects has been granted in favour of the Fund;

(2) Expected commissioning dates are indicative only and based on conversations with relevant DNOs; and

   (3)        Remains subject to planning consent. 

For further information, please contact:

Gresham House New Energy

   Ben Guest                                                                     [phone] 
   Lizzie Darbourne                                                           [phone] 

Cantor Fitzgerald Europe

   Richard Harris                                                              [phone] 
   Robert Peel                                                                  [phone] 
   Alan Ray                                                                       [phone] 
   Montfort Communications                                            [e-mail] 

Gay Collins [phone] /

   Louis Supple                                                                 [phone] 

Notes:

Gresham House Energy Storage Fund PLC (GRID or the "Fund") seeks to capitalise on the growing intraday supply and demand imbalances caused by Great Britain's ever-increasing reliance on renewable energy. The Fund aims to provide investors with an attractive and sustainable dividend by investing in a portfolio of utility-scale Energy Storage Systems ("ESS") located in Great Britain, which use batteries and sometimes generators to import and export power, accessing multiple revenue sources within the power market.

The Fund targets a Net Asset Value (NAV) total return of 8.0%+ per annum, once the Fund is fully invested, before leverage and net of Fund expenses, and a minimum target dividend of 7.0p per Ordinary Share (1),(2). Returns are not correlated to the absolute level of wholesale power prices and are not dependent on any subsidies.

(1). this is a target only and not a profit forecast. There can be no assurance that this target will be met or that the Fund will make any distributions at all. This target return should not be taken as an indication of the Fund's expected or actual current or future results. The Fund's actual return will depend upon a number of factors, including but not limited to the Fund's net income and the Fund's ongoing charges figure. Potential investors should decide for themselves whether or not the return is reasonable and achievable in deciding whether to invest in the Fund.

(2). 4.5p+ per Ordinary Share in the first year

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January 30, 2019 02:00 ET (07:00 GMT)