Gresham House Energy Storage has signed long-term floor-pricing agreements with Statkraft Markets and Markel Bermuda. Both counterparties are part of corporate groups with investment-grade status.
These agreements supplement the existing two-year tolling agreements with Octopus Energy over 568MW of the trust’s capacity, and will significantly increase GRID’s long-term contracted revenues over the next ten years.
Once all the floor agreements are in force and the tolling agreements have expired, 789MW (74% of GRID’s 1,072MW portfolio) will secure minimum annual contracted revenues of £35m, while still providing exposure to the upside merchant trading opportunity above the contracted floors. The portfolio’s capacity market contracted revenues are not included in the figure above and are expected to represent an additional c.£11m of contracted revenues in 2026.
GRID anticipates signing additional contracts on operational projects with a further investment-grade counterparty ahead of concluding the refinancing of its operational portfolio, as well as contracting a significant portion of its pipeline of new projects, as detailed in its three-year plan (which is aiming to take annualised EBITDA to £150m).
50% of total revenues contracted
The manager estimates that c.50% of the 1,072MW portfolio’s total revenues will be contracted once the tolling agreements roll off and all floor agreements are in force, including the agreement with a further counterparty.
This helps unlock advantageous terms for GRID’s previously announced new debt facility, which is due to refinance existing debt facilities shortly, with the aim that future debt servicing (interest and principal repayments) will be fully covered from cashflow derived from contracted revenues.
Revised dividend policy
The refinancing helps to pay for upgrades to existing projects, and will also enable the board to announce a revised dividend policy. The floor agreements (and project-level financing, if secured) would also support construction of new pipeline.
115MW of assets are expected to be subject to floor agreements in 2025 (adding an incremental £2.9m of contracted revenue). In 2026, a further 231MW of assets are expected to benefit from floor agreements and generate £10.5m of contracted revenue.
GRID : Gresham House Energy Storage signs deal, half its revenues locked in
