Gresham House Energy Storage Fund plc (LON:GRID), the UK’s largest utility-scale battery energy storage fund, has announced its second set of annual results since the IPO in November 2018. This covers the 12 months ended 31 December 2020 together with an update for the quarter ended 31 March 2021.
Performance highlights during the FY20 period
· Net Asset Value (NAV) up 74% to £358.9m (FY19: £205.9m)
· NAV per share up 2.2% to 102.96p (FY19: 100.79p) and NAV total return of +8.4%
· Share price total return of +10.8% versus FTSE All-Share Index total return of -9.8%
· Underlying portfolio revenues up 89% to £19.0m (FY19: £10.1m), driven by Frequency Response services, Trading and Triads
· Underlying portfolio EBITDA up 135% to £15.8m (FY19: £6.7m)
· Total dividends of 7.0p per share paid for the year, as targeted and reaffirmed for 2021
· Total equity funds of £151.2m raised and £14.9m of bonds issued
· Portfolio weighted average discount rate of 10.8% (FY19: 11.2%)
Deployment
· Total operational capacity increased to 315MW (FY19: 174MW)
· £85.3m invested and 141MW of operational capacity added:
o 41MW Bloxwich (July 2020)
o 50MW Thurcroft (October 2020)
o 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
o Investment into 275MW fully commits equity funds raised in November 2020, expected to take operational capacity to 700MW by Q1 2022
o 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
Environmental, Social and Governance
· Battery Energy Storage Systems are playing a key role in pathway to net zero carbon
· Supply chain policy developed for contractor evaluation
· Batteries owned by GRID could discharge enough energy for over 47,000 homes in 2020
· GRID awarded LSE Green Economy Mark and investment manager awarded Principles for Reponsible Investing A+ rating
Commenting on the Fund’s results, John Leggate CBE, Chair of Gresham House Energy Storage Fund plc said:
“2020 was a milestone year for GRID, with the need for battery storage highlighted by the sharp mismatch in power supply and demand during the first UK lockdown, and the Government accelerating decarbonisation targets.
“We have a substantial project pipeline and access to the necessary resources to deliver on our ambitious plans to maintain the growth momentum of our battery storage portfolio. This is fundamental to delivering a stable, cost effective, and carbon-free power generation infrastructure.”
Ben Guest, Fund Manager of Gresham House Energy Storage Fund plc & Managing Director of Gresham House New Energy said:
“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.”
Annual Report and Webinar
An online webinar and Q&A session, to discuss the results and provide an update on performance in Q1 2021, will be held at 9am today, Wednesday 28 April 2021. This will be an opportunity to hear GRID’s fund manager, Ben Guest, provide an update on the Fund’s operational and financial performance and to ask questions. Registration is available via https://bit.ly/3nbEnx0
A copy of the Annual Report is also available on the Company’s website at https://greshamhouse.com/real-assets/new-energy/gresham-house-energy-storage-fund-plc/ and here http://www.rns-pdf.londonstockexchange.com/rns/7870W_1-2021-4-27.pdf where further information on the Company can also be found. The Annual Report has also been submitted to the National Storage Mechanism and will shortly be available at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
