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.
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
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
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