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Two-Year Tolling Agreement Signed for Three Texas Assets

Gore Street Energy Storage Fund plc today announces a two-year tolling agreement with MAG Energy Solutions Inc. ('MAG'), a leading North American energy solutions provider. The agreement covers 80% of the capacity of three of the Company's operational assets in Texas: Snyder, Sweetwater, and Westover (29.85 MW / 59.7 MWh total capacity, 23.9 MW / 47.8 MWh under the toll). The agreed toll price is c.£57,700/MW/year^[1].

Summary of the Agreement

• Start Date: From 19th October 2026, MAG will manage the bidding, scheduling, and dispatch of all three assets, taking over from GSET, the current optimiser.
• Tolling payment: MAG will pay a fixed toll of c.£57,700/MW/yr (equivalent to £6.59/MW/hr)^[1] on 80% of each project's capacity, adjusted for asset performance.
• Revenue: The remaining 20% of capacity will keep its merchant exposure. MAG will trade this capacity, and the resulting revenue will be shared between MAG and the Company.

Rationale

The agreement is part of an ongoing portfolio-wide effort to diversify revenue. Contracts provide a reliable base and limit downside risk, while merchant exposure maintains the opportunity for upside. Contracted revenues already support the Company's assets in Ireland, Great Britain, and California.

Tolling structures have long been used in US power markets to give generators predictable income, and they are becoming more common in battery storage. Under the Agreement, MAG will pay a fixed toll fee for the right to operate 80% of the assets' capacity for two years.

Contracting is particularly valuable in Texas, which has been a highly cyclical market for the Company. Revenues reached record highs in 2022-23, driven by summer scarcity pricing and volatility. Since then, rapid growth in installed capacity has compressed spreads and revenues have fallen to cycle lows. The Company's Texas assets averaged c.£14,980/MW/yr (annualised) in the quarter to 30 June 2026.

The longer-term outlook for Texas remains strong, supported by data centres and industrial electrification, which are expected to drive a sharp rise in demand across the state. The agreement will support the assets through the current conditions while keeping exposure to merchant upside expected as the market recovers.

Alex O'Cinneide, CEO of the Investment Manager, said: "As indicated in the annual report, we have consistently explored commercial strategies to mitigate downside risk, which can be seen in the Resource Adequacy contract in the US and the DS3 contract in Ireland; and we are pleased to have secured this tolling agreement, which has been several months in the making. It provides the projects with stable, contracted revenues and visibility for the next two years, while keeping a portion of the capacity exposed to merchant revenues. Ultimately, the agreement allows us to bridge the gap between higher expected returns in Texas in future years and current market conditions. MAG brings deep experience across North American electricity markets, and we look forward to partnering with them.

Based on present contracts, we expect contracted revenue to account for c.40% of total revenue over FY26/27. We continue to explore similar structures where they add value to the portfolio, complementing our in-house trading which continues to deliver significant outperformance. We look forward to updating Shareholders as these initiatives progress."

 

For further information:

Gore Street Investment Management Limited
Alex O'Cinneide / Ben Paulden
Email: ir@gorestreetcap.com	Tel: +44 (0) 20 4551 1382
Shore Capital (Joint Corporate Broker)
Anita Ghanekar / Sophie Collins (Corporate Advisory) Fiona Conroy (Corporate Broking)	Tel: +44 (0) 20 7408 4090
J.P. Morgan Cazenove (Joint Corporate Broker)
William Simmonds / Rupert Budge	Tel: +44 (0) 20 3493 8000
Burson Buchanan (Media Enquiries)
Henry Wilson / Henry Harrison-Topham / Nick Croysdill Email: gorestreet@buchanan.uk.com	Tel: +44 (0) 20 7466 5000

 

https://www.gsenergystoragefund.com