Investment Trust Insider on Gore Street Energy Storage – James Carthew: Irish deal throws Gore Street Energy a lifeline
The minnow of the renewable energy sector, Gore Street Energy Storage Fund (GSF), has plans to expand. It has secured the backing of Ireland’s National Treasury Management Agency, which, subject to certain conditions being fulfilled, will stump up £30 million of new money for the fund, doubling its size.
One of those conditions is that other investors must invest at least £15 million at the same time. If everything goes according to plan, GSF could be on its way to rivalling Gresham House Energy Storage (GRID).
I felt a bit sorry for GSF, which blazed the trail for the battery storage funds but missed its fundraising target by some margin by attracting only £30 million in May last year, only to see GRID rake in £100 million in November and a further £50 million at the end of May this year.
There are other funds investing in this area as well. For example, when I wrote about Aquila European Renewables Income (AERS) two weeks ago, I neglected to mention that it includes battery storage within its remit. AERI successfully raised €154 million (£136 million) in its flotation. This investment area appears to be gaining some traction.
GSF’s share price fell in March when it acknowledged the hit to its net asset value (NAV) from the suspension of the UK’s capacity market mechanism judged by the European Court of Justice to be illegal state aid. Under this scheme, battery operators could have been paid for providing emergency supply to avoid power outages.
This situation needs to be resolved and it may be that a no-deal Brexit provides the answer that the UK government is looking for as the UK could then ignore the ECJ ruling. To be fair, the way that the UK had structured the capacity market was flawed. For example… read more here