Against the backdrop of a new energy strategy for the UK which will involve significant expansion for renewables, energy storage investor Gore Street Energy Storage (GSF) is currently running a placing at 110p per share to raise £75 million to invest in new assets.
As part of the fundraising a subscription offer is available to private investors and is set to close at the beginning of next week. The funds will be used to acquire and construct new projects as it targets a pipeline of 1.3 gigawatts in the UK and overseas. Investors in the issue will be entitled to the quarterly dividend due for the period to 31 March 2022. Currently the shares trade at a 8.57% premium to net asset value at 113p.
The CEO of investment manager Gore Street Capital, Alex O’Cinneide, told Shares that the company will ‘only raise when we’re fully committed, we have a healthy pipeline behind us and a strong track record of that pipeline translating straight into new deals’.
The company both constructs and invests in operational energy storage projects, effectively these are lithium ion batteries which store the intermittent energy derived from renewable energy sources like solar and wind. The fund describes itself as ‘technology agnostic’ but for now lithium ion batteries are the only viable option.
‘STORAGE IS FUNDAMENTAL’
As O’Cinneide observed ‘storage is fundamental, without it renewables can’t grow’. In simple terms, to provide the consistent energy required by an electricity grid, there has to be a way of storing energy from wind and solar to cover periods when the wind isn’t blowing or the sun isn’t shining.
The fund derives revenue from buying excess energy supply when prices are low, storing it before selling back to the market at a higher price when demand is higher or when renewable supply is lower, or a mix of both. It targets a 7% dividend yield.
O’Cinneide added that the fund is a ‘uniquely international player in energy storage.
‘Great Britain and Northern Ireland is our bread and butter and we will continue to maintain that position but we feel confident of generating returns in continental Europe and North America.’
In March the company agreed a deal to acquire a portfolio of eight energy storage assets in Texas from Perfect Power Solutions Texas - marking its first entry into the US market.
Although he conceded some participants in the space are facing supply chain issues, O’Cinneide said the fund’s strong relationships with manufacturing partners were mitigating any impact on its own operations for now.
