Gresham House (Gresham House), the specialist asset manager, has announced that its infrastructure and housing investment platform, the British Strategic Investment Fund, is acting as the sole outside investor in the financing of 30 megawatts of operational grid-scale energy storage assets.
The transaction is the first investment for the fund, which held a first close in 2017 with £150 million ($210 million) of commitments raised from institutional investors including local government pension schemes.
The fund has invested through a combination of senior cash paid loan notes and equity in a dedicated project company. The project involves 30 megawatts of battery storage assets spread across three sites in Nottinghamshire, Bristol and Essex. Operational and technical oversight is carried out by Gresham House New Energy and Noriker Power.
Gresham House has identified a strong growth opportunity in renewables and new energy infrastructure along with the potential for additional ESG benefits by supporting the continued decarburization of the U.K.’s power generation mix. This deal is expected to form part of a more extensive Gresham House Energy Storage System portfolio. The company has now developed 50 megawatts that is commercially operational and providing services to the National Grid. It has a development pipeline in excess of 200 megawatts. This would make the company one of the largest ESS players in the United Kingdom.
As the U.K.’s power mix changes rapidly, the National Grid is increasingly seeking to manage frequency peaks and troughs as well as other imbalances in new ways. This can be achieved by assets such as batteries near-instantaneously absorbing or generating power to keep supply and demand for energy balanced in real time. These can be installed standalone or in conjunction with renewable energy sources such as wind or solar PV.
“Energy storage is one area of the new energy sector that has significant potential from an institutional investment standpoint and is a market that will see strong growth in the coming years. Not only does it deliver a financial return from a range of short- and long-term revenue streams, but it also has a positive social impact. Energy storage needs to be distributed across all regions in the United Kingdom. These projects benefit from typically low correlation to traditional asset classes, a partial link to inflation, good cash flow and significant asset backing,” said Ben Guest, investment director for BSIF.
