Gresham House Energy Storage Fund (GRID) CMD 2026 summary

Market and regulatory outlook

• Battery energy storage systems (BESS) have become central to grid operations, driven by the decline of coal and nuclear and the rise of renewables and electrification.

• Demand for electricity is projected to grow, with AI data centers alone queuing over 50 GW, and renewables expected to double by 2030.

• Gas assets are aging and not being replaced, increasing reliance on batteries for grid flexibility.

• Regulatory changes, such as GC0166, will enable better battery utilization in the control room, supporting revenue growth.

• The market is shifting toward longer-duration storage, with government-backed contracts emerging for 8+ hour systems.

Three-year and growth plan

• The updated plan targets £141 million EBITDA by 2029, with a 90% reduction in required equity capital compared to prior plans.

• Portfolio capacity has grown from 70 MW at IPO to over 1,072 MW, with a pipeline now exceeding 1.2 GW.

• Augmentations to two-hour duration are nearly complete, with future focus on eight-hour systems for select projects.

• Alternative revenue strategies are being scaled up, targeting £25 million EBITDA, and are designed to be additive and inversely correlated to existing trading revenues.

• Funding is secured through a mix of senior debt, export credit, and a JV with Sumitomo and TPK, reducing equity needs and boosting ROE.

Financial guidance and shareholder value

• NAV per share is projected to increase by £0.56 (about 50%) from the new pipeline alone, with further upside from alternative revenues.

• Free cash flow target remains at £0.10 per share, with dividends to resume once fully covered, likely from 2028.

• The board is committed to maximizing shareholder value and will consider strategic alternatives if the share price does not re-rate as expected.

• The company is positioned as a growth business, with scale and expertise providing a competitive moat and privileged supply chain access.

• International expansion is under consideration, leveraging the expertise and networks of new JV partners.