REG - Gore Street Energy - 12-year Fixed-Price Stackable Contract Secured

Gore Street Energy Storage FundAnnouncement

18/10/2024 07:00

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RNS Number : 6818I  Gore Street Energy Storage Fund PLC  18 October 2024

   18 October 2024

Gore Street Energy Storage Fund plc

(the "Company" or "GSF")

12-year Fixed-Price Stackable Contract Secured

 

Gore Street Energy Storage Fund plc, the internationally diversified energy
storage fund, is pleased to announce that its California asset, "Big Rock,"
has secured a Resource Adequacy ("RA") contract with J. Aron & Company
LLC, a subsidiary of Goldman Sachs. This fixed-price contract, worth over $14
million annually, marks a substantial achievement for the largest asset in the
Company's portfolio. Scheduled to commence in the summer of 2025, this
contract is fully stackable, allowing for concurrent revenue streams across
wholesale trading and ancillary services.

The RA programme in California aims to ensure sufficient generation resources
are available to meet the energy system's supply requirements. The RA
programme requires load-serving entities to demonstrate they have secured
enough generation capacity through RA contracts to cover their forecasted peak
demand plus a reserve margin. This includes physical resources like energy
storage to ensure flexibility and reliability in the power supply. The RA
contract requires a minimum duration of 4 hours. Therefore, the Company's Big
Rock asset will utilise 100 MW of RA deliverability.(1)

The RA contract is similar to contracts in the Great Britain ("GB") Capacity
Market in that it is a long-term contract which is fully stackable
simultaneously with other revenue streams. However, the RA contract is worth a
substantially larger portion of the total revenue in this market. It is
expected to account for up to 40% of the total expected revenue of the asset
over the contract life. Due to the long-term fixed-price nature of the
contract, it also supports securing project-level debt.

This long-term fixed-price stackable contract will significantly enhance the
Company's total revenue generation whilst further diversifying revenue streams
and providing further stability. It also supports the Company's long-term
ability to continue distributing dividends to shareholders.

The 200 MW Big Rock asset was acquired in February 2023 and is on track to be
energised by December 2024.

 

Webinar

The Investment Manager will hold a webinar and Q&A session open to
institutional investors and research analysts. The call will focus on the
resource adequacy contract and its impact on the portfolio. The call will be
held at 11:00am on Monday 21 October. Please contact Buchanan for details:
 gorestreet@buchanancomms.co.uk

 

Factsheets

The Company produces a monthly factsheet, in addition to quarterly updates, to
communicate developments from across its portfolio and markets in which it
operates. The publications, including the quarterly factsheet, are available
on the Company's website here
(https://www.gsenergystoragefund.com/content/investors/factsheet) .

 

 

Alex O'Cinneide, CEO of Gore Street Capital, the investment manager to the
Company, commented:

"This RA contract marks the next exciting step for the Company as a new
revenue stream is secured for the portfolio. Securing this contract is a
significant milestone for the Company's cash flow. Based on contracts now in
place, the Company's contracted cash flows will increase fourfold compared to
FY24.

"The closest equivalent of long-term contracted revenue held within the
portfolio would be from GB Capacity Market contracts, which offer a fraction
of the contracted revenue secured for Big Rock in California. The RA agreement
ensures the Company's largest asset to date will deliver long-term, stable
value to investors, demonstrating the significance of our decision to enter
the CAISO market.

"We are proud to have secured the RA contract from a high-level counterparty
in Goldman Sachs as we look to continue to build on the Company's track record
of success in a new market.

"California represents a particularly attractive location for investment as
the state is rapidly decarbonising its energy supply to reach carbon
neutrality by 2045. Renewable technologies, led by the state's c. 20 GW of
installed grid-scale solar capacity, are already delivering high levels of
power throughout the year and creating unique challenges in managing the grid.
Energy storage is proving itself to be a crucial technology in facilitating
California's energy transition, reducing curtailment of renewables and
supporting system operations during periods of steep ramping.

"We look forward to adding our expertise to the CAISO market with the Big Rock
asset and further diversifying the Company's revenue and geographic exposure."

 

(1) The resource adequacy programme requires that assets have a minimum
duration of four hours. The Big Rock asset has, therefore, secured a contract
for 100 MW to fulfil the RA contract requirements.

 

 

For further information: 

 

Gore Street Capital Limited          

Alex O'Cinneide / Paula Travesso / Ben Paulden 

Email: ir@gorestreetcap.com
(https://gorestreetcap01-my.sharepoint.com/personal/bpaulden_gorestreetcap_com/Documents/ir@gorestreetcap.com)
 
 
Tel: +44 (0) 20 3826 0290 

 

Shore Capital (Joint Corporate Broker)   

Anita Ghanekar / Sophie Collins (Corporate Advisory)
                                Tel: +44 (0) 20
7408 4090 

Fiona Conroy (Corporate Broking)             

 

J.P. Morgan Cazenove (Joint Corporate
Broker)

William Simmonds / Jérémie Birnbaum (Corporate
Finance)                        Tel: +44 (0) 20 3493
8000 

 

Burson Buchanan (Media Enquiries)       

Charles Ryland / Henry Wilson / George
Beale
Tel: +44 (0) 20 7466 5000 

Email: gorestreet@buchanan.uk.com (mailto:gorestreet@buchanan.uk.com)  

 

Notes to Editors 

 

About Gore Street Energy Storage Fund plc 

Gore Street is London's first listed and internationally diversified energy
storage fund dedicated to the low-carbon transition. It seeks to provide
Shareholders with sustainable returns from their investment in a diversified
portfolio of utility-scale energy storage projects. In addition to growth
through increasing operational capacity and a considerable pipeline, the
Company aims to deliver consistent and robust dividend yield as income
distributions to its Shareholders. 

 

https://www.gsenergystoragefund.com (https://www.gsenergystoragefund.com/)  

 

 

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