Gresham House Energy Storage Fund has seen a 20% like-for-like growth in underlying portfolio EBITDA due to a range of projects having become, or being closer to becoming, operational during 2022.
The Fund, which operates under the ticker GRID, revaluated several of its projects throughout 2022 resulting in a 16.9p per share increase in the fund, its Trading Update disclosed. This is due to its project pipeline having moved closer to becoming, or became, operational during the year.
This resulted in an overall increase to 155.5p per share on 31 December 2022, up from the previous 116.86p on 31 December 2021.
GRID revealed that since 31 December 2022, an additional 40MW has been added to its operating capacity via the commissioning of the Coupar Angus project. This has seen the Fund’s total capacity reach 590MW with an additional 437MW under construction and expected to commission in 2023.
The Fund is anticipating 940MW of further pipeline in Britain and Ireland with construction expected to commence in late 2023.
On 31 December 2022, the operational capacity rose from 425MW in 2021 up to 550MW. The Fund has had a strong couple of years with its 31 December 2021 results having showcased its underlying operational portfolio EBITDA rose 172% year-on-year to £42.5 million, while its underlying operational portfolio revenues were up 170% to £51.4 million.
“In 2022, the manager grew the team’s capabilities commensurate with the projected growth of the pipeline, optimised current operations, added balance sheet flexibility through its debt facility, improved construction oversight and built out the pipeline,” said John Leggate CBE, chair of Gresham House Energy Storage Fund.
“The Board believes that we are exceptionally well-positioned to capitalise on the exciting battery energy storage opportunities ahead of us in the UK and our targeted international markets.”
GRID has also been aided via the results of the latest T-1 and T-4 Capacity Market (CM) auction results, which resulted in a pence per share increase of 6.7p. The latest CM auction took place on 14 and 21 February 2023 and granted several contracts to GRID.
The T-1 auction granted c.£5.8million in revenues to be earned in the year ending 1 October 2024, from contracts awarded to 96.5MW of de-rated capacity, priced at £60,000 per MW.
The T-4 auction granted c.£30.5 million in revenues to be earned over 15 years ending 1 October 2041, assuming consumer price index (CPI) at 2%, from contracts awarded to 28.8MW of de-rated capacity, priced at £63,000 per MW – a record high the firm said. These contracts are expected to add c.4.2p to NAV per share over time.
“We are pleased with the progress made in 2022, positioning GRID to deliver further income and capital growth in the years ahead,” said Ben Guest, fund manager of Gresham House Energy Storage Fund and managing director of Gresham House New Energy.
“The investment opportunity is skewed to capital growth as new projects continue to commission. We expect our rising operational capacity in 2023 and 2024 to continue to drive GRID’s NAV per share and earnings capacity meaningfully higher.”