Pipeline & Portfolio Update
13 May 2021
Attractive 80MW UK Acquisition
Gore Street, London's first listed energy storage fund supporting the transition to low carbon power, is pleased to announce the acquisition of an 80MW construction ready energy storage project (the "Project"), in Milton Keynes, England. The expected total capex for the Project is estimated to be c.£30m spread over the next 12 to 15 months.
The Company is also pleased to provide a further positive pipeline update that it has entered into exclusivity on over 300MW of assets which are currently subject to due diligence and are expected to close in the coming months.
The Project, which has been acquired from RES, a leading renewable energy company with an exceptional track record of delivering high quality energy storage assets, consists of an 80MW energy storage system in Milton Keynes, for which all land rights, grid connections and planning consents have already been secured. The Project is currently scheduled to become operational in Q1 2023, though Gore Street is exploring timeline optimisation to potentially bring this target forward. At 80MW, this is one of the single largest energy storage assets in the UK.
Gore Street's investment manager, Gore Street Capital Limited (the "Investment Manager"), estimates the Project will have an unlevered IRR in-line with Gore Street's target range of 10-12%.
The Company is also pleased to announce that it has secured exclusivity on a further 300MW of assets in the UK, which are currently undergoing due diligence. These projects are with leading developers and present opportunities for acquiring assets at highly competitive prices. As with other assets under construction, capital expenditure requirements would be staggered over a 12-to-18-month period and are dependent on certain milestones being achieved. In total, the Company now has over 1.0GW in its pipeline across the UK, Europe and North America.
On 30 March 2021, EirGrid granted a 12-month extension to the lucrative DS3 contracts in Ireland, until April 2024. This extension is expected to provide significant additional revenue generation for all 4 sites located in Ireland, including Mullavilly and Drumkee which have been operational since March 2021.
During Q1 2021, in-line with the Investment Manager's approach to optimise value through the portfolio's ability to capitalise flexibly on the highest risk adjusted revenue available, the Company paused Dynamic Containment strategies on certain assets for short periods of time in order to capture particularly high trading revenues available in the market, providing increased profitability. This is a further confirmation that the Investment Manager is constantly assessing revenue options and profitability maximisation and remains a key aspect of Gore Street's revenue stacking strategy.
Although it remains the case that Grid Balancing contracts are currently more profitable than Trading most of the time, Gore Street has demonstrated its ability to participate in different markets and opportunistically capture market prices when attractive.
In addition to being the newest portfolio of assets available to a financial investor, over 75% of the Company's portfolio consists of 1 hour duration batteries. The Company believes these assets are the most cost-efficient energy storage assets available today and best suited to execute flexible revenue stacking services over the long term, as well as being part of a portfolio which is designed to be capable of upgrade to meet the changing needs of the market.
Alex O'Cinneide, CEO of Gore Street Capital, the Company's Investment Manager, commented:
"We are very pleased to announce the acquisition of this exceptionally high-quality 80MW construction ready project in the UK, which adds one of the UK's largest assets planned for development to our leading portfolio of energy storage assets. At 520MW this is the largest portfolio available to a financial investor and one which has the youngest portfolio of assets, and most cost-effective acquisition history in the market. This latest Project again highlights the strength of our management team in being able to identify and secure exclusivity on important infrastructure assets at extremely competitive pricing, through our active asset management approach. In fact, the Company believes that GSF's installed cost per MW is close to half that of the closest peer that we have analysed. We believe this competitive acquisition pricing is the bedrock for continuing to deliver future compelling IRR returns to our shareholders.
Gore Street's 300MW in exclusivity represents an extraordinary opportunity for the Company to acquire nationally significant energy storage assets in the UK at a competitive price through the Investment Manager's leading contact network as a highly regarded first mover. We expect to update the market in due course with our further progress in relation to the pipeline and expanding our portfolio."
The Legal Entity Identifier of the Company is 213800GPUNVGG81G4O21.
The person responsible for releasing this announcement is Susan Fadil.
For further information:
Gore Street Capital Limited
Alex O'Cinneide / Paula Travesso
Tel: +44 (0) 20 3826 0290
Shore Capital (Joint Corporate Broker and Joint Bookrunner)
Anita Ghanekar / Hugo Masefield (Corporate Advisory)
Henry Willcocks / Fiona Conroy (Corporate Broking)
Tel: +44 (0) 20 7408 4090
J. P. Morgan Cazenove (Joint Corporate Broker and Joint Bookrunner)
William Simmonds / Jérémie Birnbaum (Corporate Finance)
Tel: +44 (0) 20 7742 4000
Buchanan (Media enquiries)
Charles Ryland / Henry Wilson / George Beale
|Tel: +44 (0) 20 7466 5000|
Email: [email protected]
JTC (UK) Limited, Company Secretary
Tel: +44 (0) 20 7409 0181
Notes to Editors
About Gore Street Energy Storage Fund plc
Gore Street is London's first listed energy storage fund and seeks to provide shareholders with a significant opportunity to invest in a diversified portfolio of utility scale energy storage projects. In addition to growth through exploiting its considerable pipeline, the Company aims to deliver consistent and robust dividend yield as income distributions to its shareholders.
The Company targets an annual dividend of 7.0% of NAV per Ordinary Share in each financial year, subject to a minimum target of 7.0 pence per Ordinary Share. Dividends are paid quarterly.
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE UK'S MARKET ABUSE REGULATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
The information in this announcement may include forward-looking statements, which are based on the current expectations, intentions and projections about future events and trends or other matters that are not historical facts and in certain cases can be identified by the use of terms such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", "believe" (or the negatives thereof) or other variations thereof or comparable terminology. These forward-looking statements, as well as those included in any related materials, are not guarantees of future performance and are subject to known and unknown risks, uncertainties, assumptions about the Company and other factors, including, among other things, the development of its business, trends in its industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur and actual results may differ materially from those expressed or implied by such forward looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements.