Gresham House Energy Storage Fund (GRID) is the largest UK fund investing in utility-scale battery energy storage systems (BESS). The BESS sector has faced challenges over the past year due to unexpected revenue declines and the slower-than-expected utilisation of BESS by the UK’s Electricity System Operator (see our February note). This has adversely impacted GRID’s NAV and share price, which is currently trading at a 50% discount to its latest published NAV. However, a H124 trading update released today foresees a ‘strong earnings recovery in 2025’ due to rising contractual revenues and the completion of GRID’s 2024 construction pipeline. GRID will announce a three-year plan in November aimed at further increasing revenues and reducing earnings volatility. This plan will focus on further augmentations to the capacity of GRID’s existing projects, new pipeline opportunities, efficient capital management and alternative revenue sources. These expansion plans, combined with improved revenue prospects, give GRID’s manager, Ben Guest renewed and growing confidence over the medium-term prospects for the business and its ability to deliver value for shareholders.
