Gresham House Energy Storage (GRID) hopes to generate £25m in “alternative revenues” which could mitigate the financial impact of the delay in connection dates announced earlier this month.
In annual results the £425m battery fund said it had begun trials in December of a new strategy to capture more margin when optimising or improving the capacity of its assets. This had “so far exceeded expectations” by more than doubling existing revenues on trial capacity of below 10MW and said it was “excited” at the prospect of scaling it up this year with the potential to “significantly enhance” revenues from its portfolio of battery energy storage systems (BESS).
Citing commercial sensitivity, GRID declined to be specific about how the revenues were generated but said: “This strategy is positioned to leverage our current BESS optimisation activities and take different trades over various time horizons overlaid onto our current BESS revenue stack.
“They are implemented to enhance our risk-adjusted returns but do not require any changes to our existing optimisation arrangements. This is key as most of our agreements with third-party optimisers include floors (minimum revenue per MW guarantees) which underpin our debt arrangements.”
Today’s results confirmed much of what was announced in a trading update last month including the refinancing of its £220m debt facility on improved terms.
Net asset value (NAV) per share rose 3.7% to 113.34p in 2025 with revenues increasing 29.9% to £60.4m to underpin operating earnings of £38.8m, up 33.4% with the profit margin improving to 64.2% from 62.5%.
Contracted revenues more than doubled to £23.8m from £11.5m in 2024 with long-term floor agreements signed for 939MW of the operational portfolio and 637MW of pipeline projects.
Chair John Leggate said it had been a “strong” performance with this year promising “to bring tangible signs of progress”, particularly as the war in the Middle East highlights the importance of the UK reducing its dependence on imported fossil fuels.
“Battery storage is a fundamental component of Britain’s national energy mix. Since BESS has become more mainstream, its contribution to our national infrastructure and energy resilience is becoming more widely recognised by key policy makers,” he said.
Two weeks ago GRID revealed it would not hit its £150m earnings target by the end of next year after the National Electricity System Operator (NESO) announced 2029 energisation dates for two of the five projects in its three-year recovery plan.
GRID shares dipped 1p, or 1.3%, to 73.8p this morning, putting them on a 34% discount. They have risen from around 50p in November 2024 when the board unveiled its three-year recovery plan in response to the share price falling from a peak of 179p in the previous two years.
Our view
James Carthew, head of investment company research at QuotedData, said: “At last some good news for Gresham House Energy Storage, with a positive NAV move and an improvement in revenue per MW. The trial of the new ‘alternative revenues’ is intriguing, but for now it is hard to imagine a new source of revenue that won’t be competed away in time. For me, more promising is GRID’s ability to source external funding for new projects such as Glassenbury, and the opportunity in eight-hour BESS. The chair’s comments around NESO’s lack of confidence in BESS are surprising and frustrating. Recent experience surely demonstrates that we need to reduce our dependence on gas-fired peaking plant as soon as possible.”
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