Gresham House Energy Storage Fund Plc GBP · LSE:GRID
Gresham House Energy Storage Fund Plc GBP — Gresham House Energy Storage Fund — FY2021 Earnings Presentation
22 slides from Gresham House Energy Storage Fund Plc GBP's earnings presentation, Apr 6, 2022
Slide 1: Gresham House Energy Storage Fund plc Annual Results Presentation
Gresham House Energy Storage Fund plc (GRID or Fund) Annual Results Presentation for the year ending 31 December 2021 Cleator (c)2017 NEC Energy Solutions, Inc. April 6, 2022 Powering the Renewable Energy transition
Slide 2: Presentation Team
PRESENTATION TEAM Ben Guest Rupert Robinson Managing Director, Gresham House New Energy, Managing Director, Gresham House Asset Management Fund Manager, Gresham House Energy Storage Fund plc Founded Hazel Capital (now Gresham House New Over 30 years’ experience in asset management Energy) in 2007. a
Slide 3: 2021 Financial Highlights
2021 FINANCIAL HIGHLIGHTS ▪ Net Asset Value (NAV) up 42.6% to £511.7mn (FY20: £358.9mn) Net Asset Value ▪ NAV per share up 13.5% to 116.86p (FY20: 102.96p) and NAV total return 2020 £358.9mn of 20.3% 2021 £511.7mn ▪ Underlying Operational Portfolio revenues1 up 170% to £51.4mn (FY20: £19.0mn) NAV pe
Slide 4: 2021 Deployment & Fundraising
2021 DEPLOYMENT & FUNDRAISING ▪ Completed on 110MW (2020: 141MW) of operational capacity, taking the total Total operational capacity operational capacity to 425MW (FY20: 315MW) 2020 315MW ▪ Eight projects, totalling a further 415MW, under construction as of 31 2021 425MW December 20211 ▪ Additional
Slide 5: 2021 Operational Performance & Construction
2021 OPERATIONAL PERFORMANCE & CONSTRUCTION ▪ GRID remains GB market leader with a market share of c.30% GRID market share ▪ Revenue generation and EBITDA significantly above budget in 2021 30% ▪ Degradation of batteries was modest in 2021 with the portfolio’s State of Health (SOH) at 97.5% Battery
Slide 6: NAV per Share - Full-Year Bridge
NAV PER SHARE - FULL-YEAR BRIDGE NAV (p/Share) bridge from 31 Dec 20 to 31 Dec 21 NAV/Share Increase Decrease 118 116 1.32 (0.56) 114 112 9.69 p/Share 110 108 (7.00) 116.86 8.53 106 2.49 104 0.41 (0.54) (0.44) 102 102.96 100 Debt Costs Net of Shares Change in inflation Dividends Roll-forward and rev
Slide 7: NAV per Share - Quarterly Progression
p/Share 100 102 104 106 108 110 112 114 116 118 120 31 December 2020 NAV 102.96 Dividends Changes in Working Capital 1.75 2.47 Roll-forward & assumptions New project revaluations 0.66 4.36 Change in inflation assumptions Transaction fees Debt Costs 0.56 0.08 0.08 31 March NAV 106.67 Dividends Change
Slide 8: 2021 Revenue Breakdown
2021 REVENUE BREAKDOWN 2021 Revenue Share of 2021 2020 Revenue Share of 2020 Investment portfolio revenue (£mn) revenue (%) (£mn) revenue (%) Firm Frequency Response FFR 2.00 3.9% 3.20 19.9% Enhanced Frequency Response EFR 9.63 18.7% 3.59 22.3% Dynamic Containment DC 30.64 59.6% 5.35 33.3% Frequency
Slide 9: Portfolio Revenue Split by Month
PORTFOLIO REVENUE SPLIT BY MONTH Portfolio Revenue Split by Month 5,000,000 Revenues (£) 2,500,000 - Jan 2021 Feb 2021 Mar 2021 Apr 2021 May 2021 Jun 2021 Jul 2021 Aug 2021 Sep 2021 Oct 2021 Nov 2021 Dec 2021 CM EFR DC FFR Trading TRIAD Past performance is not necessarily a guide to future performan
Slide 10: 2022 Outlook
2022 OUTLOOK Dividends ▪ Year-to-date revenues per MW are at a similar level to 2021 with a greater share of revenues from trading ▪ Target dividend of 7.0p reaffirmed for 2022 and full Operational Dividend Cover expected from underlying earnings in the portfolio1 ▪ GRID will aim to balance future d
Slide 11: 2022 Outlook - Investment Policy & Strategy
2022 OUTLOOK - INVESTMENT POLICY & STRATEGY The Fund intends to seek all relevant approvals (from shareholders and lenders) for certain changes to its investment policy. As such, the Fund intends to issue a Circular during April. The principal proposed amendments are as follows: ▪ To invest up to 10
Slide 12: Portfolio Summary
PORTFOLIO SUMMARY Export capacity Project Location Battery size (MWh) Commissioning status (MW) 1. Staunch Staffordshire 20 2.9 Operational - 2018 2. Rufford Nottinghamshire 7 9.5 Operational - 2018 3. Lockleaze Bristol 15 22.1 Operational - 2018 4. Littlebrook Kent 8 6.3 Operational - 2018 Byers Br
Slide 13: Pipeline
PIPELINE Taken together, the Fund’s operational portfolio, projects under construction and other pipeline totals 1,557MW. Export capacity Battery size Stairfoot (March 2022) Project Location Commissioning status (MW) (MWh) 25. Stairfoot North Yorkshire 40 40.0 Target COD: Q2 2022 26. Project York Yo
Slide 14: Renewables Growth and Fossil Fuel Decline Trends Continue
RENEWABLES GROWTH AND FOSSIL FUEL DECLINE TRENDS CONTINUE ▪ Intermittent renewable generation creates the need for energy storage ▪ Visibility in renewable deployment with latest CfD auction slated to deliver c.12GW in contracts in addition to 5.5GW from last auction ▪ Growth in renewable generation
Slide 15: Volatility Has Remained High Supporting Trading Revenues
VOLATILITY HAS REMAINED HIGH SUPPORTING TRADING REVENUES ▪ Volatility is expected to remain high as renewables market share continues to rise and market share of baseload continues to fall contributing to intermittent electricity supply ▪ High gas and carbon prices are also contributing to volatilit
Slide 16: Driving Profitability & Competitiveness
DRIVING PROFITABILITY & COMPETITIVENESS The Investment Manager is focused on creating value by maximising the spread between the cost of capital and profitability of projects to make GRID the most competitive operator of Battery Energy Storage Systems (BESS) Lowering the cost of capital Alpha genera
Slide 17: Sustainable Investment Framework (SIF)
SUSTAINABLE INVESTMENT FRAMEWORK (SIF) Supply chain Employment, health, Five ESG factors considered most material to sustainability safety and well-being GRID operations and investments: ✓ Carbon emissions and pollution Community care Marketplace ✓ Natural resource management and engagement responsi
Slide 18: Conclusions & Upcoming Events
CONCLUSIONS & UPCOMING EVENTS Conclusions ▪ NAV is expected to range between 140-145p per Ordinary Share by the end of Q2 2022 ▪ Strong momentum on deployment set to drive cash generation with; Important upcoming events: ‒ 415MW projects in construction with over half commissioning in the April: Cir
Slide 19: Appendix Slides
APPENDIX SLIDES 19
Slide 20: Depiction of GB Electricity System
DEPICTION OF GB ELECTRICITY SYSTEM Energy Storage is a “relief valve” for system instabilities and, increasingly, for the growing supply-demand imbalances caused by the growth in renewable generation Electricity Generation has migrated Energy Storage Systems can import and Energy Storage Systems can
Slide 21: Updated Revenue Model
UPDATED REVENUE MODEL ▪ Two key uses for Battery Energy Storage Systems - trading and frequency response ▪ Trading algorithms continually assess whether more can be earned from trading or frequency response ▪ Trading and frequency response are inherently profitable on account of GRID’s asset-backed
Slide 22: Disclaimer
DISCLAIMER This presentation (the Presentation) is issued by Gresham House Asset Management Ltd (GHAM), Investment Manager for Gresham No person, especially those who do not have professional experience in matters relating to investments, may rely on the contents of this House Energy Storage Fund pl
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