LONDON, Jan 6 (Reuters) – Gresham House Energy Storage Fund has projected operational portfolio earnings before interest, tax, depreciation, and amortisation (EBITDA) of £29 million for the financial year ending December 31, 2024, marking a 12% increase compared to £25.8 million in 2023. This would represent an EBITDA margin of 69% for 2024, up from 67% the previous year.
In its interim results, published on September 30, 2024, the Fund had indicated that annualised operational portfolio EBITDA could reach £45 million if its uncontracted assets, estimated at 504 MW, could achieve merchant revenues of £45,000 per MW per annum once all projects under construction are commissioned. However, improved trading conditions have led to annualised revenues per MW exceeding £60,000 in the second half of 2024, surpassing initial projections.
The strong performance in the second half of the year has been supported by a recovery in the wholesale market and improved dispatch rates in the Balancing Mechanism (BM), with December emerging as the strongest month of 2024. If these positive conditions continue, the Fund is poised to meet or even exceed the £45 million EBITDA target.
New projects are also coming online to further support growth. The 50MW Elland project, with a two-hour duration, was energised on November 1, 2024. Meanwhile, the 100MW Melksham project, which experienced a delay due to Storm Bert, is now fully prepared for energisation later this month. The team at Melksham is also working to extend the project's duration from one hour to two hours, which should improve its overall performance.
In addition, the 40MW Shilton Lane project, with a two-hour duration, is nearing completion and is expected to pass the National Energy System Operator (NESO) compliance process by February 2025. This will ensure that all projects continue to meet the regulatory requirements necessary for operation.
The Fund's improved financial outlook has also been supported by cost-saving initiatives. The team achieved £1.1 million in savings from the disposal of non-essential equipment, including diesel engines and loadbanks, in December. Additional recurring savings, such as reduced insurance costs, are expected to further enhance financial performance in the coming months.
The National Energy System Operator (NESO) has implemented several improvements to its control room operations, leading to higher in-merit dispatch rates of batteries, which rose from 10% in September to 14% in November. This increase has benefited the Fund's trading income, contributing to its strong results in the latter part of 2024.
