Gore Street Energy Storage Fund (GSF) has agreed the sale of investment tax credits (ITCs) tied to its Dogfish project in Texas, securing gross proceeds of approximately £18–19m. The transaction is expected to close by the end of June 2025, with funds to be received shortly thereafter.

The pricing aligns with previous guidance of $60–80m for the combined Dogfish and Big Rock ITCs. GSF noted that the process to monetise the Big Rock ITCs is progressing well, with a further update expected in due course.

The move provides a meaningful cash injection and supports the trust’s already robust financial position. GSF has hedged its US dollar income through to the end of 2030, mitigating currency risk amidst ongoing geopolitical uncertainty, and continues to benefit from low leverage and disciplined capital management.

CEO Alex O’Cinneide said the agreement marks a “significant milestone” and reflects strong execution of the company’s strategy, which includes over 530MWh of energised capacity in the year so far and a successful resource adequacy contract for Big Rock. The Board will outline its plans for deploying the additional cash in due course, with options including expanding existing sites and building out pre-construction projects, which now benefit from falling capital costs. Despite GSF remains focused on enhancing long-term shareholder value in a market increasingly underpinned by structural demand and supportive policy.

[QD comment MR: This is a timely boost for Gore Street Energy Storage, as the sale of the Dogfish investment tax credits brings in a sizeable upfront cash inflow at the upper end of expectations. With macro uncertainty elevated, the decision to hedge its US dollar income through to 2030 could prove to be a shrewd move and, regardless, the hedge offers GSF shareholders some additional comfort around its US dollar cashflows.

GSF’s balance sheet, relatively low leverage, and improving visibility over pre-construction capex costs put it in a relatively strong position. While politicians have been rowing back on their previous climate-related commitments – which has been particularly visible in the US – it is clear that this capacity is sorely needed and GSF and its peers – Gresham House Energy Storage (GRID) and Harmony Energy Income (HEIT) – are operating in a structurally growing sector.

While recognising the challenges the energy storage funds have faced – particularly with the balancing mechanism in the UK – the prevailing discounts for GSF (c47%) and GRID (c45%) look significantly overdone when set against the strength of the growth opportunity.]