Battery Energy Storage System (BESS) investment fund Gresham House Energy Storage Fund has announced its half-year results to the end of June 2024.
Operating capacity in MWh increased 46% year on year, reaching 931 MWh during the results period and exceeding the 1 GWh milestone shortly after the end of the period. In MW, operational capacity increased to 790 MW, an increase of 34% compared to the 590 MW of June 2023.
However, despite this capacity growth, operating portfolio revenues fell 12.8% year-on-year, from £20.5m in June 2023 to £17.9m. Earnings before interest, tax, depreciation and amortization (EBITDA) fell from £13.8 million to £10.4 million, with Gresham House blaming the 23.9% decline on “particularly difficult market conditions” in the first quarter of this year year. The net asset value also fell in H12024, from 19.91p to 109.16p per share.
The Gresham House Energy Storage Fund has had a turbulent year, along with other major players in the BESS sector. In a trading update in February this year, the company stated that the UK BESS market was suffering from a “weak revenue environment”, a fact confirmed in April by the publication of its annual audited results which showed the fund making a loss of £ 110 million. from a profit of £217 million last year. The fund made the decision to suspend shareholder dividends, a choice also made by fellow investment fund Harmony Energy Income Trust.
However, there could be good news on the horizon for Gresham House as net revenues in July and August averaged at their highest levels of the year to date, around 25% higher than average net revenues in H12024. In addition, several major projects will be powered and commissioned in October and November this year, including the 40MW/80MWh Shilton Lane project, the 50MW/100MWh Elland project and the Penwortham system expansion, which is yet to be completed. once 50MWh will win. . The Melksham project in Wiltshire has started expansion and is expected to come on stream in October at 150 MWh before expanding to 200 MWh in December.
Ben Guest, fund manager of Gresham House Energy Storage Fund and managing director of Gresham House New Energy commented: “While it is clear that the revenue environment has been weak, there have been several key positive developments in the sector. Renewable energy generation has increased as expected and will continue to do so, increasing energy price volatility and the revenue potential of longer-lasting batteries in particular. This, combined with record low prices, vastly improved energy density of new batteries and the manager’s now proven expertise in cost-effective project expansion, means the manager sees significant potential revenue growth by extending the life of the remainder of the portfolio to at least a minimum of two hours in 2025 for modest capital amounts, subject to availability.
“In the meantime, we will see a meaningful change in revenue mix in the second half of the year as the tolling agreement comes into effect. Increased supply volatility from a higher renewable energy grid and rising electricity demand are increasing the need for BESS in the UK electricity system, and this points to improved merchant revenues.”
John Leggate CBE, Chairman of the Gresham House Energy Storage Fund, added: “The first half of this year has undoubtedly been a year of uncertainty for shareholders due to the deterioration of the BESS revenue environment and as the Board navigates the incredibly difficult has taken the decision to temporarily suspend dividends. .
“GRID has made significant progress in implementing parts of its strategic plan. This is fundamental to driving continued growth and providing a supportive backdrop for the resumption of dividend payments.”
