Quarterly Net Asset Value & Business Update
28 March 2019
Gore Street (ticker: GSF), London’s first listed fund for investing in income producing energy storage projects in the UK and internationally, is pleased to announce its quarterly net asset value (“NAV”) update. As at 31 December 2018, the unaudited estimated NAV per ordinary share was 92.9 pence.
Energy storage is a new market and as such it is undergoing continued and transformative growth in the UK and globally. The fundamental growth drivers remain fossil and nuclear powerplant closures and the steady increase in intermittent renewable energy capacity which affect grid stability and electricity price stability, both issues that storage projects are uniquely positioned to address. As a result, energy storage is a key part of government energy policy as it helps to deliver the low-carbon electricity sector that is the stated goal of the UK, the EU and many other nations and areas. The appetite for energy storage assets is therefore anticipated to increase in these markets as the levers that drive their growth further develop. Gore Street remains ideally positioned to capitalise on this anticipated increase in demand for energy storage assets.
Gore Street Capital, Gore Street’s Investment Advisor, has witnessed the market react to the need for storage with increased permitting and installation of storage projects in the UK that are accessing the frequency response and capacity markets. In November 2018, we commented on the news that the UK capacity market had been suspended following an EU decision that the process for obtaining EU State Aid clearance was flawed. These two events have led to a small fall in frequency response prices and temporary loss of capacity payments. The UK and the EU are working to address the procedural issues and reinstate the capacity market.
In light of these developments, Gore Street is taking a conservative view of the level and sources of revenue available to energy storage projects. It is this conservative forecast that results in the NAV adjustment. The Investment Advisor remains confident that the UK still presents compelling investment opportunities, and the present operational portfolio is generating strong positive cash flows, whilst the asset in construction remains on track for commissioning as previously advised.
As a leader in this new and growing market, Gore Street has an extensive pipeline of UK and European storage projects, several of which are in exclusivity or advanced negotiations; over the last few months that pipeline of opportunities has increased materially. However, Gore Street has been focused on preserving its rigorous investment discipline to safeguard target returns to shareholders at the levels indicated in the IPO prospectus and has therefore been selective in the projects it invest in. Nevertheless, the Company expects to announce several new investments in the near term.
In addition to the Company’s significant UK investment pipeline, the opportunities outside the UK have continued to grow considerably and there are immediate and attractive opportunities available at present market prices. Gore Street’s advanced pipeline encompasses projects across Belgium, Germany and the Ireland; a point of differentiation for the fund.
The Legal Entity Identifier of the Company is 213800GPUNVGG81G4O21.
For further information:
|Gore Street Capital Limited|
|Alex O'Cinneide||Tel: +44 (0) 20 3826 0290|
|Stockdale Securities Limited|
|Daniel Harris / Rose Ramsden (Corporate Finance)
Henry Willcocks / Fiona Conroy (Corporate Broking)
|Tel: +44 (0) 20 7601 6000|
|Charles Ryland / Steph Watson / Henry Wilson||Tel: +44 (0) 20 7466 5000|
|JTC (UK) Limited, Company Secretary||Tel: +44 (0) 20 7409 0181|
Notes to Editors
About Gore Street Energy Storage Fund plc
Gore Street is London's first listed energy storage fund and seeks to provide shareholders with a significant opportunity to invest in a diversified portfolio of utility scale energy storage projects. In addition to growth through exploiting its considerable pipeline, the Company aims to deliver consistent and robust dividend yield as income distributions to its shareholders.