Strong results from Gresham House Energy Storage as UK renewables momentum gathers pace

Gresham House Energy Storage (GRID) reported annual results to 31 December 2020. The NAV total return came to 8.4% and the share price total return was 10.8%.

Ben Guest, GRID’s manager, noted: “The UK’s global leadership in renewable generation and in its setting of ambitious decarbonisation targets, continues to make it one of the world’s most attractive markets for deployment of utility-scale battery storage technology. We are encouraged by the system operator, National Grid, continuing to test and facilitate new ways for battery storage to contribute to system balancing.

“More renewable energy on the system will inevitably lead to more intraday power price volatility, driving the improved revenues and profit from trading which GRID is best positioned to capture. We are intent on driving shareholder value by maximising project returns through our portfolio scale as well as operational and cost leadership, while striving to reduce our cost of capital, including through a potential new debt facility.”

We have extracted some of the performance highlights below:

Deployment

• Total operational capacity increased to 315MW (FY19: 174MW)
• £85.3m invested and 141MW of operational capacity added:
  • 41MW Bloxwich (July 2020)
  • 50MW Thurcroft (October 2020)
  • 50MW Wickham Market (November 2020)
• Cash position of £111m at year-end

Post-period end highlights, to 31 March 2021

• NAV per share up 3.5% to 106.66p
• Share price total return of +27.3% since IPO versus FTSE All-Share index total return of +7.9%
• £49.0m invested into 110MW of operational capacity taking total to 425MW (including the 30MW Byers Brae acquisition announced on 22 April 2021)
• Updated Pipeline of 802MW, of which 275MW due to start construction shortly
  • Investment into 275MW fully commits equity funds raised in November 2020, expected to take operational capacity to 700MW by Q1 2022
  • Additional exclusive pipeline of 527MW to be built subject to further debt and/or equity fundraising

Operational Performance

• COVID-19 impact on operations was modest. Commissioning dates on two projects experienced delays during the year, for which compensation was received in the form of liquidated damages
• GRID remains market leader, with market share around 30%, and largest operator by at least 2x
• First and only operator to enter all new National Grid services in 2020
• Operational uptime of 98.8% achieved for Firm Frequency Response
• Battery duration is longer than most competitors, with over 1 hour average duration, reducing battery cycles and degradation
• Investment and asset management teams expanded and well positioned to scale portfolio and deliver operational efficiencies

GRID: Strong results from Gresham House Energy Storage as UK renewables momentum gathers pace