Gresham House Energy Storage Fund (GRID) CMD 2024 summary

Strategic and financial highlights

• Operational capacity has grown from 70 MW at IPO in 2018 to 845 MW, set to surpass 1,072 MW/1,702 MWh by Q1 2025, with capital deployed increasing by only 13%.

• Net debt is expected to peak below £165 million and at 20% of gross asset value, with 2024 capital allocation focused on preservation and disposals.

• Dividend payments were paused but are set to be reinstated after refinancing, with the first distribution expected in Q3 2025, and future dividends covered after all costs.

• Benchmark transaction at NAV for a 50MW project aims to unlock portfolio value and set valuation standards.

• Capital allocation has focused on preservation and growth, with a shift toward a balanced policy post-refinancing.

Three-year strategy and growth plans (2025–2027)

• Three-year plan targets a £150 million EBITDA run rate by end-2027, driven by augmentations, new pipeline, and alternative revenues.

• Augmentation of 1.5 GWh in existing assets and 680 MW in new projects planned, with agreement in principle for new investments.

• Augmentation pipeline includes nine projects for 2025, with five already completed, enhancing both capacity and returns.

• 2025 EBITDA forecasted at £45–55 million, with 67% of 2025 EBITDA contracted, providing visibility and stability.

• Shift from a primarily merchant model to debt arrangements sized off contracted revenues, reducing risk and supporting sustainable growth.

Business model evolution and market positioning

• The strategy is shifting from a pure merchant model to a blended approach, combining long-term contracted revenues (e.g., tolling with Octopus Energy) and merchant exposure.

• The tolling agreement with Octopus Energy covers half the portfolio for two years, providing revenue stability and operational benefits.

• The company is leveraging data analytics and operational efficiencies to optimize asset performance and identify new revenue streams.

• Engagement with NESO and DESNZ is yielding regulatory support, including eligibility for the Long-Duration Energy Storage Cap and Floor regime.

• Blended contracting approach to balance risk and upside, with long-term revenue contracts emerging and relationships with partners like Octopus Energy.