Gresham House Energy Storage Fund (GRID) CMD 2024 summary

Trading update and financial position

• Operational capacity has grown from 70 MW at IPO to 845 MW, set to rise to 985 MW by year-end and 1,072 MW/1,702 MWh by Q1 2025, with further growth expected using minimal capital increase.

• Financial position is improving due to careful capital management and a recovering revenue environment, with net debt expected to peak below £160 million in early 2025 and capital allocation focused on preservation and disposals.

• EBITDA for 2025 is projected at £45–55 million, with about two-thirds contracted, providing strong visibility and stability.

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

• Disposals and a benchmark transaction at NAV for a 50 MW project are being pursued to further reduce debt and set valuation standards.

Three-year strategy and growth plan

• Targeting a £150 million EBITDA run rate by end of 2027, driven by augmentations, new pipeline, and alternative revenues.

• Augmentation of 1.5 GWh in existing assets and 680 MW in new projects planned for 2026–2027, with all projects having secured grid connections and advanced planning.

• Revenue strategy will blend contracted and merchant revenues, with a shift to debt arrangements sized off contracted revenues and long-term contracts (e.g., tolling with Octopus Energy) reducing risk and volatility.

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

• Additional value will be sought through project augmentations, lease extensions, and alternative revenue streams.

Market and sector outlook

• UK battery storage market is set for rapid growth, with NESO targeting 22 GW of short-duration and 8 GW of long-duration batteries by 2030, supported by Clean Power 2030 policy.

• Renewables now exceed 50% of UK generation and are expected to reach over 70% in the next 3–4 years, increasing demand for storage.

• Revenue recovery is underway, with industry revenues returning to 2021 levels and further upside expected from improved battery utilization and dispatch rates.

• Regulatory support is strengthening, including eligibility for the LDES cap and floor regime and increased engagement from NESO.

• Batteries contributed to a 4% reduction in UK power sector emissions in 2024, with carbon savings rising sharply.