Acquisition boosts operational portfolio to 125MW
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16 December 2019
Gresham House Energy Storage Fund plc
Acquisition boosts operational portfolio to 125MW
Gresham House Energy Storage Fund (GRID or the Fund) has acquired two operational battery storage facilities totalling 50MW from VLC Energy, a joint venture between Low Carbon and VPI Immingham a subsidiary of Vitol Group, for £29.2 million. The facilities comprise a 40MW facility at Glassenbury, Kent, and a 10MW facility at Cleator Moor, Cumbria that were commissioned in January 2018.
The plants are two of the UK's largest energy storage facilities. Their combined 50MW capacity represents a quarter of National Grid's 2016 Enhanced Frequency Response (EFR) capacity.
The acquisition increases the total capacity of operational utility-scale battery storage projects in the Fund's portfolio to 125MW, this figure increasing to 174MW when the previously announced acquisition of the 49MW project, located at the Red Scar Business Park, is included. The Red Scar facility is currently undergoing commissioning, with the acquisition expected to complete in the near future.
Both Glassenbury and Cleator achieved 'G59' commissioning in late 2017 and have EFR contracts to January 2022 awarded following National Grid's 2016 EFR auction and provide sub-second responses to frequency deviations on the national grid. These facilities also benefit from 15-year 2016 Capacity Market contracts. The facilities are backed by 30-year site leases (c.28 years remaining).
In addition, the 40MW Glassenbury facility has significant potential to offer Reactive Power (RP) revenue earning services, thanks to its location.
Portfolio and Pipeline Update
The acquisition increases the total capacity of operational utility-scale battery storage projects in the Fund's investment portfolio to 125MW.
Separately, and in addition to the completion of the Red Scar acquisition, the Fund also expects to acquire a further three projects; two of 50MW each and the Littlebrook extension of 5MW in the coming months, once they are commissioned and operational. This will see the Fund's total operational portfolio increase to c.279MW. It is currently possible that commencement of operations of the two larger projects slips into early Q2 2020 if winter conditions prove unaccommodating to a smooth construction process.
John Leggate CBE, Chairman of Gresham House Energy Storage plc said:
"We are delighted to follow our successful £41.6million fundraise in October with the acquisition of these operational facilities from VLC Energy. We are pleased with progress since our IPO 13 months ago, and this marks the third acquisition since the Seed Assets were purchased at IPO. This takes the Fund's operational portfolio to 125MW and with a strong pipeline of acquisitions yet to follow."
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For further information, please contact:
Gresham House New Energy
+44 (0) 20 3837 6270
+44 (0) 20 3903 5562
Cantor Fitzgerald Europe
+44 (0) 20 7894 8229
+44 (0) 20 7894 7719
+44 (0) 20 7894 8590
+44 (0) 20 3995 6699
JTC (UK) Limited as Company Secretary
+44 (0) 20 7409 0181
About the Company and the Manager
Gresham House Energy Storage Fund plc owns a portfolio of eight utility-scale operational energy storage systems (known as ESS) located in Great Britain. The portfolio has a total operational capacity of 125MW. The Company is managed by Gresham House Asset Management Limited under the leadership of Ben Guest. The Company was admitted to trading on the London Stock Exchange (Specialist Fund Segment) on 13 November 2018 having raised £100 million of gross proceeds from investors. Including issuance under the Placing Programme, it has now raised a total of approximately £204 million of gross proceeds from investors.
The Gresham House New Energy team has a proven track record in developing and operating energy storage and other renewable assets having developed 75MW of Energy Storage Systems and approximately 290MW of predominantly ground-mounted solar projects. Gresham House Asset Management currently manages approximately 200MW of solar and wind energy projects.
Gresham House Asset Management is the FCA authorised operating business of Gresham House plc, a London Stock Exchange quoted specialist alternative asset manager. Gresham House is committed to operating responsibly and sustainably, taking the long view in delivering sustainable investment solutions.
About VLC Energy
VLC Energy is a joint venture between Low Carbon, a renewable energy investment company, and VPI Immingham, owner of one of the largest combined heat and power plants in Europe and part of the Vitol Group.
VLC Energy was established to fund early stage energy storage and renewable energy projects in the UK, with the intention of accelerating the development of the UK's renewable energy market and complementing VPI Immingham's existing Combined Heat and Power generation capabilities.
About Low Carbon
Low Carbon is a privately-owned investment company committed to the development and operation of renewable energy power production. Low Carbon invests into both renewable energy developers and projects across a range of renewable energy technologies including solar PV, wind, energy storage, waste to energy and energy efficiency. Low Carbon has a strong management team with a proven track record in the development, construction, financing and management of renewable energy assets. Low Carbon remains involved in the projects for the long term with a dedicated asset management team that manages assets on balance sheet and for third parties (unlisted and listed).
About VPI Immingham
VPI Immingham is a combined heat and power (CHP) plant near Immingham, on the South Bank of the river Humber. It is one of the largest CHP plants in Europe, capable of generating 1,240 MW - about 2.5% of UK peak electricity demand and up to 930 tonnes of steam per hour, which is used by nearby oil refineries to turn crude oil into products such as gasoline.
It is part of the Vitol Group, an energy and commodities company. Vitol's primary business is the trading and distribution of energy products globally - it trades over 6mbpd of crude oil and products and, at any time, has 200 ships transporting its cargoes.
Vitol's clients include national oil companies, multinationals, leading industrial and chemical companies and the world's largest airlines. Founded in Rotterdam in 1966, today Vitol serves clients from some 40 offices worldwide and is invested in energy assets globally including; circa 15.5mm3 of storage across six continents, 390kbpd of refining capacity and Shell-branded downstream businesses in 16 African countries, as well as Australia.
Revenues in 2015 were $168 billion.
Definition of Utility-scale battery Storage Systems
Utility-scale battery storage systems are the enabling infrastructure that will support the continued growth of renewable energy sources such as wind and solar, essential to the UK's stated target to reduce carbon emissions. They store excess energy generated by renewable energy sources and then release that stored energy back into the grid during peak hours when there is increased demand for it.
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