Gresham House Energy Storage Fund is expecting operational portfolio earnings before interest, tax, depreciation and amortisation (EBITDA) of £29m for the financial year ending 31 December 2024.
This is an increase on £25.8m on the previous year (2023) representing year-over-year EBITDA growth of 12% and an EBITDA margin of 69% for 2024 (2023: 67%).
In its interim results, announced on 30 September 2024, Gresham House Energy Storage Fund indicated that annualised operational portfolio EBITDA could reach £45mn based on £45,000 per MW per annum in merchant revenues from its uncontracted assets once all projects under construction are commissioned.
By comparison, better trading conditions have resulted in annualised operational portfolio revenues per MW on uncontracted assets (504MW) exceeding £60,000 per MW in the second half of 2024.
Improved operational portfolio revenues and EBITDA have been underpinned by a recovery in the wholesale market backdrop and as trading in the Balancing Mechanism (BM) begins to see better dispatch rates of batteries, with December being the strongest month of 2024.
If this is sustained, the fund should be well placed to meet or exceed the £45mn EBITDA level.
New projects are coming online, with Elland (50MW), energised on 1 November 2024 at a two-hour duration, now commissioned.
The commissioning of Melksham (100MW) was rescheduled as the planned outage was on the same day as Storm Bert landing.
The site is fully ready to energise, and the team is working to shorten the commissioning phase once energisation has taken place, which is now expected later this month.
The team is using this time productively by progressing augmentation works from the current 1-hour to the 2-hour target duration at Melksham. Shilton Lane (40MW), a two-hour duration project, is also fully built and is in the final stages of the National Energy System Operator’s (NESO) compliance process (a requirement for projects greater than 30MW in Scotland).
This is expected to complete in February 2025.
As well as maintaining a high and increasing level of project availability across the portfolio, the asset management team has been driving additional asset level efficiencies.
Disposals of non-essential equipment, such as diesel engines and loadbanks installed in the original fleet, and other one-off savings from construction, raised £1.1m in December.
The team is also identifying recurring savings, such as the lower insurance costs reflected in the last quarterly NAV, and further efficiencies are expected.
The National Energy System Operator (NESO) has delivered several improvements in its control room, leading to in-merit dispatch rates of batteries rising from 10% in September to 14% in November 2024 which has benefitted trading income in recent months.