Important information

Gore Street Energy Storage Fund (the "Company"), the internationally diversified energy storage fund, is pleased to announce the following update. GSF notes the recent Capacity Market auction, in particular, in which contracts were secured at record-level prices.

GB Capacity Market Auction Results

• The Company secured contracts in the 2023 T-4 auction across six sites. These contracts are expected to commence delivery in October 2026 and have a combined value of c. £45 million. They will provide a consolidated revenue of c. £3.76 million between October 2026 and September 2027. The 200MW (Middleton site) is expected to generate £2.97 million annually in Capacity Market revenues for 15 years (subject to CPI adjustments).
  
• The Company also secured contracts for three sites in the 2023 T-1 Capacity Market auction. The contracts, which have a combined value of £1.8 million, will provide critical capacity to the UK's National Grid and are set to commence on 1 October 2023, lasting for a period of one year.
  
• The revenue outlined above is in real terms and is expected to be adjusted upwards for inflation.

Portfolio Update

In line with the Company's gearing policy, as set out in the Prospectus dated 29 March 2022, the Company may utilise debt up to 30% of gross asset value. Although this permits the Company to borrow up to c. £230 million inclusive of the £15 million RCF currently in place, utilisation of this capacity will depend on the cost of debt and the return available on investment. The Investment Manager is engaging with the debt markets and reports strong demand from lenders at both project and portfolio levels. Shareholders will be updated on the outcome of these discussions in the near term.

Gore Street's investment manager, Gore Street Capital Limited (the "Investment Manager"), estimates the total capex requirement to build out the Company's portfolio will be c. £370 million (inclusive of contractual commitments already entered) between now and 2026. Out of the £370 million, c. £173 million is expected to be deployed in the next 12 months. As disclosed in the Company announcement on 17 February 2023, the Company currently has c. £144 million in cash or cash equivalents. The Company intends to employ its current cash balance and a level of debt in line with its gearing policy to meet the capex requirement to complete the construction of its portfolio.

Alex O'Cinneide, CEO of Gore Street Capital, commented:

"We are pleased to have secured contracts for our portfolio in the 2023 T-1 and T-4 Capacity Market auctions, reflecting the importance of energy storage in supporting the stability of the grid and the growth of renewable energy sources. The contracts - worth a combined total of £1.8 million and £45.4 million, respectively - will serve as a reliable source of revenue and support the Company in realising its plan, articulated to investors during our most recent funding round, of using operational revenue to cover dividend payments from future quarters onward.

"As we look forward, we are exploring opportunities to expand our portfolio and take advantage of strong international markets for energy storage assets. While we are very well-capitalised, we recognise the potential benefits of judiciously utilising debt to finance our next phase of growth.

"We will continue to pursue a balanced approach to capital allocation, ensuring we retain the flexibility to respond to changing market conditions while continuing to focus on operational excellence to deliver further attractive returns to our shareholders."  

For further information:

Buchanan (Media enquiries)

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 an 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.