A battery storage site next to a green field on the left. Cloudy skies and concrete ground
Harmony Energy’s Pillswood BESS (above) was one of “GB’s best performing” throughout 2023. Image: Harmony Energy.

Battery storage investment firm Harmony Energy Income Trust (HEIT) has predicted that it can generate “attractive returns” despite the ongoing woes in battery energy storage revenues in the GB market.

Disclosed in the firm’s results for the financial year ended 31 October 2023, this prediction comes despite HEIT’s announcement that its battery energy storage system (BESS) revenues were markedly lower than the same period in 2022, as reported by Solar Power Portal earlier this month.

Revealed in the firm’s recent trading update, the discussion around a “weak revenue environment for BESS assets” echoed the thoughts of Gresham House Energy Storage Fund, another major UK-based storage investor, who said that this was due to assets not being able to participate in balancing the GB grid or replacing gas-fired generation to their fullest capability.

In the financial results, however, HEIT’s chair, Norman Crighton, stated that “independent market experts expect trading conditions to improve throughout 2024”, with the firm’s longer-duration 2-hour batteries continuing to outperform shorter-duration BESS.

One of the major influences that impacted HEIT’s portfolio was the implementation issues of National Grid ESO’s Open Balancing Platform, an aspect that Modo Energy had previously referenced in contributing to December having the lowest BESS revenues since 2020.

The platform, which introduced bulk dispatch functionality, allows for more instructions to be issued to batteries at any one time, but due to technical issues, the control room reverted to legacy systems for dispatching batteries on 15 December.

HEIT continues to bolster its energy storage assets

As observed in the firm’s financial results, 2023 saw several large-scale acquisitions by HEIT, with its total capacity now at 395.4MW/790.8MWh. Five projects came online across the year.

According to the company, HEIT now owns two of the three largest operational BESS in Europe (by MWh), including its Pillswood 98MW/196MWh asset as well as its Bumpers 99MW/198MWh BESS in Surrey.

These two projects were highlighted by Crighton, who stated that HEIT’s Pillswood site had been “one of the best performing BESS sites in GB during 2023” and that the Bumpers project is now the “joint-largest in Europe (by MWh)”. He added that the portfolio shifted from 0% to 70% operational within the 12 months since 31 October 2022.

It is worth noting that HEIT’s net asset value finished the year at £262.3 million, around 115.40 pence per share.