Gresham House Energy Storage Boosts Portfolio By 39%
Gresham House Energy Storage Fund plc (GRID) has announced that it has completed its investment in the 49 MW battery-only project known as Red Scar. The project, which is located on the Red Scar Business Park, by the Longridge Road and the M6 outside Preston, was acquired for a total enterprise value of approximately £32.8million. It is connected to the electricity distribution network and the ‘G99' commissioning tests have been successfully completed. The project was handed over on 31 December 2019.
Red Scar was acquired from its developer, a vehicle owned by Gresham House DevCo Limited and Noriker Power Limited. The acquisition increases the total capacity of operational utility-scale battery storage projects in GRID's investment portfolio to 174MW. The total purchase price includes £1m of deferred consideration, payable in 12 months, subject to the project achieving certain profitability targets. Red Scar is one of the exclusivity portfolio projects identified by GRID in its IPO prospectus published in October 2018. The fund announced its intention to acquire Red Scar in October 2019.
Red Scar earns revenues mainly from asset optimisation (whereby it imports and exports power to earn income from the wholesale electricity market and the National Grid-administered Balancing Mechanism). As such, the fund's investment manager, Gresham House Asset Management, believes that the project is aligned to GRID's investment criteria since it enables GRID to implement its asset optimisation business model, which existing and future sites are also expected to adopt over time.
Following this completion of the Red Scar acquisition, Gresham House Energy Storage expects to acquire a further three projects in the coming months after they have been commissioned and become operational. These three projects (two of 50MW each and a further one being the Littlebrook extension of 5MW) will increase Gresham House Energy Storage's total operational portfolio to 279MW.
John Leggate CBE, chairman of Gresham House Energy Storage Fund PLC, said “We are delighted to conclude a further acquisition so soon after the purchase of operational facilities totalling 50MW from VLC Energy, as announced in December. We look forward to integrating all these new assets into the fund's portfolio and adding further projects in H1 2020”.