GB Portfolio - Achieving Industry Leading Returns
03 February 2022
Gore Street Energy Storage Fund, London's first listed and category defining energy storage fund supporting the transition to a low carbon society, is pleased to provide a portfolio update for its Great Britain (GB) assets.
Industry leading returns
During Q4 2021, three of the Company's sites were ranked as one of the highest revenue generating assets per MWh, according to Modo Energy, a specialist independent data provider for the energy markets. The three sites were Lower Road (10MW), Larport Farm (19.5MW) and Breach Farm (10MW). Additionally, on the alternate metric of revenue generated per MW, the Company's asset at Larport Farm ranked second. In January 2022, the Company's assets were again listed as the best performing assets for the month, when Breach Farm and Lower Road ranked as the top 2 highest revenue assets on both a MW and MWh basis.
All of these assets benefit from frequency contracts, for which prices have recently reached record levels sustained at approximately £25 per MW per hour, delivering returns which are significantly above the Company's base case across Gore Street's GB operational portfolio (110MW) for the relevant months. This is a further example of the flexible nature of the Company's asset base where the investment team is able to take advantage of a variety of contracts depending on prevailing market conditions.
The Modo Energy publication confirms that shorter duration battery systems are achieving the same (or higher) levels of ancillary revenue when compared to sites with longer duration. As shorter duration battery systems require lower Capex, the Company is able to commit less capital whilst capturing the same (or higher) level of revenues, maximising profitability. Currently, the majority of the GB portfolio has a duration of circa 1-hour and the Company expects to increase sites' duration when required to meet its investment goals. The Company continuously assesses portfolio capacity and is able to expand sites' duration when revenue justifies capex expenditure.
Trading opportunities captured
During Q4 2021, energy markets in GB experienced historic highs in energy prices as well as volatility. This was driven by historical low wind generation, planned and unplanned generation plant outages, unforeseen interconnector failure and high gas prices. Gore Street has demonstrated that its assets are flexible and capable of capturing trading revenue when, and if, such revenue stream offers higher gross margins when compared to other available revenue-generating services.
The continuous scale up of renewable energy generation, and the consequential need for grid flexibility to support such growth, suggests that the market fundamentals will remain supportive, thus sustaining high levels of volatility throughout 2022.
Alex O'Cinneide, CEO of Gore Street Capital, the Company's investment adviser commented:
"Time and again, the Company has proven its ability to acquire attractive assets at favourable terms. We believe Gore Street's acquisition price discipline, together with our leading operational and development expertise are the keys to unlocking long term outperformance from this asset class. Across GB, the Company is seeing pricing for its services reach all-time highs from frequency revenue stream opportunities which independent commentator Modo Energy has shown resulted in leading asset performance during past months. Meanwhile, we continue to see extremely attractive significant acquisition opportunities for the Company not just in GB and Ireland but also internationally, particularly in European and North American markets and look forward to providing an update in due course."
The Legal Entity Identifier of the Company is 213800GPUNVGG81G4O21.
For further information:
Gore Street Capital Limited
Alex O'Cinneide / Paula Travesso / Maria Vaggione
Tel: +44 (0) 20 3826 0290
Shore Capital (Joint Corporate Broker)
Anita Ghanekar / Rose Ramsden / Iain Sexton (Corporate Advisory)
Fiona Conroy (Corporate Broking)
Tel: +44 (0) 20 7408 4090
J. P. Morgan Cazenove (Joint Corporate Broker)
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.
About MW and MWh metrics
MW and MWh are the units used to define (at a high level) battery projects' capabilities. MW ratings refer to power capability, whilst MWh refers to energy capacity.
This announcement has been issued by, and is the sole responsibility of, Gore Street Energy Storage Fund plc (the "Company").
This announcement is for information purposes only and is not intended to and does not constitute or form part of any offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for shares in any jurisdiction in which such an offer or solicitation is unlawful.
The information and opinions contained in this announcement are provided as at the date of the announcement and are subject to change without notice and no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information contained herein.
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", "could", "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.