Energy investment firm Foresight Group has acquired battery energy storage system (BESS) investment fund Harmony Energy Income Trust (HEIT).
Through its Foresight Energy Infrastructure Partners II fund, Foresight has acquired a 49% stake in HEIT. It acquired the other 51% stake through one of its portfolio companies, Blackmead Infrastructure Limited.
HEIT has a portfolio of eight grid-connected 2-hour duration BESS with a total capacity of around 400MW/800MWh, which Foresight said is the UK’s “largest” such portfolio.
Foresight said that acquiring HEIT advances its strategy to build a “pan-European battery storage platform”. It said that as one of “Europe’s most mature storage markets”, its new UK portfolio could support investments in other markets it expects to mature in the future, like Spain, Germany, Italy and the Nordics.
Richard Thompson, co-manager, Foresight Energy Infrastructure Partners, said: “Battery storage is critical to enabling a renewables-led power system, and this portfolio offers immediate scale, strong economics, and proven performance.”
HEIT said in August 2024 that its portfolio sale was “progressing”. Since then, it received offers from multiple bidders, including a £200 million cash offer from renewables firm Drax, which was higher than Foresight’s offer. However, Drax withdrew its offer in May after Foresight increased its bid.
The sale of HEIT’s UK portfolio has raised questions about the viability of publicly listed funds for BESS assets. Our sister site, Current±, published analysis which said that BESS systems may be too volatile for the listed fund model. An unnamed industry source said that the structure of publicly listed funds “works well for renewables like solar which pay out regularly, but BESS are fundamentally volatile assets, so you need investors that understand you might have 12 bad months and then 12 great ones.”
However, taking BESS assets private is not the only option. UK-listed BESS fund Gresham House Energy Storage Fund (GRID) agreed a fixed-price, two-year tolling deal with Octopus Energy for half of its BESS portfolio. This measure can stabilise revenues and reduce investment risk for publicly listed funds.
Earlier this week, Gresham House entered into long-term floor pricing agreements with Statkraft and Markel Bermuda which will come into effect after the Octopus toll deal ends next year.
