Gresham House Energy Storage H2 2025 Earnings Report

Gresham House Energy Storage EPS Results

• Actual EPS: -GBX 1.15
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Gresham House Energy Storage Revenue Results

• Actual Revenue: $0.71 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Gresham House Energy Storage Announcement Details

• Quarter: H2 2025
• Date: 4/21/2026
• Time: Before Market Opens
• Conference Call Date: Tuesday, April 21, 2026
• Conference Call Time: 5:30AM ET

Gresham House Energy Storage (LON:GRID) Fund plc (GRID or the Fund) seeks to capitalise on the growing intraday supply and demand imbalances caused by Great Britain’s ever increasing reliance on renewable energy. The Fund aims to provide investors with an attractive and sustainable dividend by investing in a portfolio of utility-scale Battery Energy Storage Systems (BESS) located in Great Britain, which primarily use batteries to import and export power, accessing multiple revenue sources available in the power market. Gresham House Asset Management Limited (GHAM), is the investment Manager for Gresham House Energy Storage Fund plc. GHAM, the operating business of Gresham House plc (GHE), a London Stock Exchange quoted specialist asset manager, manages funds and co-investments across a range of differentiated alternative investment strategies for third-party clients. The company is built around a long-term investment philosophy and applies private equity techniques to due diligence and investment appraisal.

Gresham House Energy Storage H2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Gresham House reports a strong operational and financial recovery in 2025 with capacity > 1 GW, revenues up ~30% to ~£60m, EBITDA up ~33% to ~38.8m, and a share-price recovery of ~70% during the year.
• Positive Sentiment: Management materially de‑risked the business by increasing contracted revenue (from ~25% to ~39%) and closing an upsized £220m amortising debt facility at lower rates, enabling augmentations and new project financing.
• Positive Sentiment: Augmentations and duration upgrades are a core growth driver: ~330 MWh added in 2024–25, ~350 MWh targeted in 2026 to push the portfolio average toward ~2 hours duration, which should raise revenue per MW and long‑term EBITDA.
• Negative Sentiment: NAV was pressured in Q4 by third‑party downward revisions to revenue curves (a £0.16 haircut), and NESO connection delays for parts of the pipeline are pushing back cash flows — contributing to a persistent discount of the share price to NAV.

Presentation

[Rupert Robinson, Managing Director at Gresham House]

Good morning, everyone, and welcome to the annual results presentation for the Gresham House Energy Storage Fund for the financial year ending December 2025. As always, on these occasions, I'm delighted to be accompanied by Ben Guest, Managing Director of Gresham House's Energy Transition Business and Lead Fund Manager of GRID, together with James Bustin, Ben's Assistant Fund Manager on GRID. We'll present for 20 minutes-25 minutes this morning, and then we will open up to Q&A. Please send in your questions via the links. We'll get through as many as we can in the allotted hour. Before handing over to Ben, 2025 was a highly productive year for the company on multiple fronts as we executed on the first year of the three-year plan laid out at the Capital Markets Day in November 2024.

[Rupert Robinson, Managing Director at Gresham House]

Importantly, we saw a strong turnaround in the company's financial performance, which was reflected in an impressive recovery in the GRID share price during 2025, rising by a little over 70%. Portfolio revenue's up 30%, portfolio EBITDA up 33%, the NAV per share up 3.7%, even allowing for a GBP 0.16 haircut from the forward curves, which I believe James will talk about in a little bit more detail during the presentation. Interestingly, contracted revenue's more than doubled over the year to more than 40%, and obviously, augmentations and the arrangement of GBP 220 million amortized debt closed during 2025.

[Rupert Robinson, Managing Director at Gresham House]

I'm now going to hand over to Ben, who'll walk through the results in a bit more detail. We'll go through the bridge, we'll talk a little bit about the three-year plan. Obviously, we're working towards the Capital Markets Day at the end of May, where we'll expand a bit more on the plans for the next several years for the company. Ben, over to you, sir.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Thanks very much, Rupert. Good morning, everybody. Thank you for joining us today, to take you through the annual results for 2025. Getting underway, starting with our executive summary. 2025 was a year of significant growth for the company. We got our capacity up to over 1 GW. We grew revenues and EBITDA strongly, approximately 30%. We had a couple of other firsts as well. We raised capital at a project level, at a valuation which equated to the NAV of the company, which was pleasing in the absence of other transactions or many other transactions in operational assets in the sector. We concluded our refinancing. We really set the groundwork, the base for our 3-year plan, and this is underpinned by contracted revenues, which took some effort to put into place, but we're pleased to have done so and Rupert mentioned we've increased our contracted revenue substantially.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

This has led to an upsized debt facility, which has unlocked capital for augmentations in particular, and equity for new projects, and overall, capital for growth. We've achieved that with a lower interest rate and a longer-dated facility. This year or last year rather, we had augmentations well underway. We look forward to getting new projects underway this year, concluding on a substantial number of augmentations. Two already done, six more in progress, which we're staggering for obvious reasons. We don't want all our assets offline or potentially at risk of being offline given the complexities of upgrading projects. We're staggering those through the year cautiously, and we're bringing 90 MW back online at the moment.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We're looking forward to announcing the conclusion of the financing of our new pipeline, which has been heavily dependent on the NESO queue reform, AKA the Gate 2 process run by NESO. Next slide, please. Going to a little more detail. We've got an NAV which dropped slightly in the year. The drop came in the Q4 as a result of a significant further haircut in revenue assumptions from our third-party forecasters. James will go through the details shortly. We have significant growth in revenues, and you can see the growth in underlying revenues in the bars there, going from GBP 38.7 in 2023. Admittedly, it was higher in 2022, and GBP 46.5 in 2024 and GBP 60 million in 2025. We look forward to continuing to grow this figure as we add capacity and duration, megawatts and megawatt-hours of storage capacity.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Similarly, the EBITDA is also growing, if you pan to the right, which it grew to just a little below 40 million, GBP 38.8 million. That's despite having certain assets offline, which obviously impacted the increase in margins that we're looking forward to seeing in terms of underlying margins for the business, which we're sure we can achieve at higher levels than currently. In terms of the balance sheet, we've got net debt to NAV at GBP 159 million now. That's increasing, but it's just 25% of NAV. Gross debt is at GBP 220 million, so there's some cash against this figure. GBP 210 million of that GBP 220 million is drawn at the moment. Expressed as a percentage of GAV, that would be a 20% figure for those who are more familiar with GAV. Sorry, James. Thanks.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

More specifically on the three-year plan, just to remind everyone, we've got three, what we call prongs to the three-year plan or elements to it. Augmentations have been underway for some time. In 2024 and 2025, we added 330 MWh. We're looking forward to adding 350 MWh this year, and taking the overall portfolio to close to two hours in duration. We're looking forward to getting a project underway, dare I say finally, as the whole industry, and I'm not just talking about batteries, I'm talking the whole electricity industry in terms of developers looking to put new projects into construction, is being stalled due to the queue reform process, which hopefully longer term will achieve its purpose of accelerating the deployment, and the CP30 or Clean Power 2030 ambitions of the Labour Government, which we subscribe to as well.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We've got 594 out of 694, or 4 out of 5 of our connection offers back. LN2's outstanding, but we do expect this soon. We will provide the details when we get them. We do expect this to be a 2027 connection, and getting underway therefore on three projects in the near future. Reflecting the expectation that we'd have three projects going first, we signed three SPAs for LN2, which is completed, Monet's Garden, which is completed as well, and Mackenzie Storage Limited or Mackenzie A as we nicknamed the project. We will be signing SPAs on the subsequent two projects imminently. Once we've got the equity senior and junior in place, we look forward to get that underway, and we'll talk about the debt a little bit more shortly. In terms of alternative revenues, we're very excited about this. We have been for some time.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

I appreciate we've been talking about it for a long time. We've been very careful about how we've structured this, and got into this. We have been running formal trials. We've generated significant revenue per megawatts in a trial that we ran from December through March. We would like to think that we can increase revenues per megawatt per hour by GBP 5-GBP 10 per megawatt per hour, having achieved, it was a short period, but significantly more than that, during our trials. The trial was run on only 4 MW, and so we expect to scale this up. Just to point out that while the trial was small, it is scalable.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Once we have the full green light, sign our route to market contracts and so on, we'll be looking to scale that up, not from 0 to 100 or 500 or whatever number it might be, but to a more modest number and scaling this gradually, and enjoying the benefits of this and looking to achieve a target of GBP 25 million in incremental EBITDA set in the three-year plan. When you bring this all together, we're driving growth in capacity, we're driving growth in megawatt capacity, power in megawatt hour capacity, the storage that flows through that connection, and power potential, and through generating revenues in increasingly diversified manners, all the while increasing our contracted revenue base as well. Next slide, please. Thank you.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

In terms of the funding of the new projects, as I said, we've got three projects signed, a 57 MW project, a 100 MW project, and a 240 MW project, 397 MW in total. We've got 297 MW still to sign, which we mentioned a moment ago, and we can touch on those separately. These first three projects, we look forward to getting into construction. In terms of a little bit of a flavor or sense of the capital structure, we're looking at approximately 70% of the total project cost being senior debt. That's typical of these sorts of projects, and this is 70% of cost, which is substantially below the NAV of two-hour projects in our fund. The debt to value, or senior debt to value ratio will be lower than that.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

In addition to that, we have an export credit facility, which is sitting junior to the senior debt. We look forward to talking about this in more detail in terms of the precise terms, but this will fund a portion of the BESS equipment. This is also very close to being concluded. We'll look forward to concluding everything in one go, which is the senior debt, the export credit facility or junior, as we also call it, and a layer of equity funding as well. Next slide, please. No, thanks. Sorry, it's like a long presentation. The next one is alternative revenues. We've been talking about this for some time now. To be clear, we call it alternative revenues because it's another way of making money, but it is additive to what we do. It adds to, not replaces existing optimization agreements, floor agreements.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

They all remain in place, and unaffected. This is a means of diversifying our revenues, adding to our revenues, and also from a risk perspective, without overstating it, we are also introducing a revenue stream, which is inversely correlated to our existing merchant revenues. We do think that it is, overall, a powerful strategy, which once executed and scaled up, will add to our revenues, diversify, and improve the risk-adjusted nature of the business. We've been through a huge amount of modeling on this over a very long period of time. We've tested different routes to market, different, dare I say, flavors or structures or elements to the strategy, different ways of going about the same thing, in other words.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We're confident that we've reached a conclusion in terms of how we want to go about this now. As a result of this, we expect revenues to grow, revenues per megawatt to grow, and obviously to achieve our three-year plan target. As the portfolio grows, it can also scale with the portfolio as well, because it is tied ultimately to the characteristics of the existing portfolio. As you can see, there's a timeline down below. We'd be looking to scale up to 10 MW-20 MW in the following quarter, so a modest increase, and then getting to 500 MW-100 MW. Obviously, subject to further performance reviews, we're monitoring on this live basis. All being well, we will be scaling to a fairly substantial size by the end of the year. I'll hand over to James for his discussion of financials. Thank you.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

Thank you, Ben. Yeah, we've talked a lot about what we've been doing over the past year and what we're in the process of delivering at the moment, and the substantial growth that we're targeting with the next batch of pipeline, as well as additional augmentations. If we look back now over 2025, there's been a decent amount of growth through 2025. There's around 500 MWh of additional battery capacity added through the course of that year. Not all of that contributed for the whole year. On the charts we've got in front of us, we've got on the left-hand side the 2024 revenue mix, on the right-hand side, the 2025 revenue mix. The clear picture from here is a move towards contracted revenues. That's been the plan for a little while now. Our target is to improve the risk-adjusted returns of the portfolio in this business.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

That aids with financing through debt arrangements, but it also gives us more security on what our revenue picture looks like over the coming years, particularly while we've been seeing volatility in the market over recent periods, which Ben will talk to in the next slide. Contracted revenues has moved from 25% in 2024, it's now 39%. We expect that number to keep increasing. We've got floor contracts which started to take effect at the end of last year, but for the most part, are coming through during this year, and then with the new pipeline as well. That number, therefore, is set to increase. At the moment, the floor doesn't really appear in here, it's just the tolling and the Capacity Market. The tolling assets start to run off partway through this year. The first assets joined in the second half of 2024. They run for two years.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

We're in the tail end of some of those contracts, some of the contracts more recently started. Tolling will be around for a little bit longer, but will start to dwindle as we move more towards floor revenues. On the merchant side, so while merchant has decreased as an overall percentage, there is a switch more towards trading, which has been anticipated for a while. Particularly as we grow the duration of these assets, we'll expect to see more and more of our revenues come from trading environment rather than frequency response. These assets are flexible.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

They can achieve the revenues from the different sources that are available. It's between us and the optimizers to make sure we're delivering the best outcome on each of these assets, and it's being regularly reviewed. Overall, there's a move towards contracted revenues, that's intended. We should see that growth continue. Move to the next slide. Ben, if you want to talk about the volatility.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Thanks, James. Apologies for the slight outage there on connections. In terms of this slide, this is the slide that we've shown several times and updated over time, showing our actual revenues in the red line, which is the latest month's revenues annualized, and that's shown on the left-hand scale. The revenue range, which is a low range, so wherever the line is relative to the dotted lines in any moment in time is an expression of its revenue rate in megawatts per year. The green dotted line shows 30,000. The upper one shows 210,000, which is the range of revenues we've actually seen in this business, albeit for short periods at the extremes. What this does is compare it with the capacity in megawatt terms, not megawatt hours. It's just very much the megawatt capacity scaled over time.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

As you can see, over to the right-hand side, the ambitions of the three-year plan show the overall capacity growing to just under 1.8 GW of capacity versus a little under 1.1 GW now. Really what this shows is a nice, hopefully pictorial, of the direction of travel of the business. We'd expect the red line to rise with the rising capacity. Please note that the revenues in 2025, there was an underlying flattening of volatility which has recovered in the recent past for obvious reasons. There is also assets going into augmentation, and so the weighted average revenue rate that we shared is a weighted average as opposed to based on the full 1,072 MW, because they weren't all online throughout the whole year.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

As we do see a full year of those assets being online, we can expect an increase in revenues for the same revenue rate. We can expect further uplift in revenues as we have a higher quality of asset through the augmentations. Then the other vectors, as well as capacity and increases of capacity in 2025 and through 2029, dare I say, are obviously the alternative revenues. We also expect the battery market to be relied on much more significantly in the future. It's been a long time coming.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Clearly, our consultants are continuing to revise down their forecasts, and the skip rate topic has not been solved fully, which is the underutilization of batteries relative to their potential in the network, and that's completely clear and visible from the generation mix that you see today, where gas is far and away the asset that's ramped up and down the most. Of course, there are many more gas assets than there are battery assets. If you look forward three or four years, you do have clear signs that gas assets will start coming offline. We've got approaching 35 GW of gas assets in this country. A significant majority of those will be over 30 years old by the end of this decade.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

A lot of these need a business case to justify reinvestment into them, given the increases in intermittency and increases in renewables, which drive intermittency, but also drive and push out baseload generation. Obviously, the increase in batteries that go with that. That revenue case is not showing up either in the underlying merchant market or in the contracted market. Capacity Market auction recently failed to award many of the expected megawatts for refurbishment or rebuild of gas assets.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Now, of course, that may yet come in future years, but I think the case is diminishing, which means that the skip rate topic is in some way partially self-solving, because the prioritization of gas assets on the system naturally decreases. I just thought I'd share that point because there's a significant development in the last month or so at a macro level. Back to you, James, on the next two slides.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

Thank you, Ben. On here, we're just looking at the balance sheet impact of all the work that's gone through 2025. Three key messages from this. The first one is on the left-hand side, which is the impact from the work being done by the manager over the course of the year. This includes various valuation uplifts. On the right-hand side, point number two, it will be the cash generation of this portfolio. This portfolio is generating cash and covering its dividends. That's an opportunity to grow potentially in future. Then the last one is the revenue curves, which I'll touch on shortly on the next slide. That has detracted from a lot of the good work that's going on behind the scenes in the business. The first point, the work being done by the manager and the growth here.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

The largest impact has been on the new investments to fair value. That's come from a few different sources. Obviously, we've grown the operational capacity over the course of 2025 as we've reached 1,072 MW and 1.7 GWh of operational capacity. The way we value these assets, we hold a higher discount rate during construction, and that starts to move towards the operational discount rates as assets become operational. That extra 500 MWh of operational capacity through new projects and also the completing of the augmentations last year added further value to the portfolio. In addition to that, we also acquired land on two projects, York and Elland. The value of that comes in reduction in the lease costs through the life of the asset, plus also the value of the land itself and extended lives.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

On top of that, we also had refinancing of the operational portfolio debt arrangements during the year and also financing in a project, Glastonbury. The combination of all of that provided additional funds to be able to start augmentations. Some of those augmentations have already started, and as Ben has alluded to, Glastonbury concluded already this year. By having the funding in place, as part of our valuation policy, we can then revalue those assets. Those assets will have outages assumed in the model. As we get through those outages and the asset becomes operational, those increased capacity will then start to see further value coming through in the valuations. That will likely flow through in the roll forward section, as it's just a natural movement in the valuation model as you move through quarters. Next bar will be on lease extensions.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

In addition to acquiring land, we've also extended the leases on a number of assets. That's added further value to the portfolio. Similarly, with buying land, you can extend the life of that asset now. We had some assets that were shorter life. We've been able to extend those. The benefit is longer term cash flows from those entities. Next two bars are smaller, but still very useful in terms of what we're delivering during this period. Construction updates mostly represents a reduction in costs through construction as we get towards the end of construction on the main assets that we built during the year. We hold contingencies for extra costs that come out of the woodwork. We've been able to manage the cost pretty well, and therefore, a reduction overall in the original budgets that we had for these assets.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

OpEx assumptions reflects there's a lot of work going on behind the scenes just to ensure each of the underlying projects is as efficient as possible. One of those that we've been able to reduce quite substantially during the year is in the insurance costs as a benefit of the larger portfolio we hold, the longer track record we hold and able to demonstrate the capabilities of the sites. Plus also, as we move through augmentations and improve the technology, further decrease the risk in the portfolio, so being able to get a benefit mostly on that. We're also seeing some benefits when it comes to rates. Initial assumptions are coming in slightly lower than budgeted. We should hopefully start to see a little bit more coming through in the operational OpEx side as well.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

Last point on there was the contracted revenues, which was a marginal impact overall. Combined with the next point, which is the reduction in revenue forecasts, we're in a much more conservative revenue assumption, significantly de-risk the valuations from a revenue generation perspective, but also adding in the contracted layer further adds protection on what potential revenue returns are on these assets. I'll come back onto the revenue curves in a second. The last part is around cash generation in the business. That's the net fund and SPV working capital. That's the cash generated from the fund underlying projects, net of all costs in the fund structure, compared against the debt, costs and dividends shows overall cash generation in the business.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

This is something we want to maintain, we've been very clear on, we want to ensure that we're generating more cash than we're paying out in both the debt servicing and also dividend costs. We want to ensure we're fully covered on those. We've got a fairly healthy cover at the moment. We've stated our targets for dividends. That's something we'll keep monitoring. If the portfolio starts to generate in excess of where we are expecting, we can revisit those assumptions for dividends, but we're comfortable that we've got the cash generation to support the dividends we put forward to the market. As we build out the portfolio, which is the plans with the three-year plan, the expectation is there's a larger portfolio generating larger cash and greater opportunity for returns to shareholders.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

The last bar on this chart is the interest rate swap, which is a balance sheet movement just to reflect the change in the interest rates in the background on the debt arrangements we have in place. The next slide talks about the curves in a little bit more detail. In this chart, we've shown the 2024 year-end curves versus the 2025 year-end curves. As you can see across the board, they've all fallen quite substantially. That, combined with the fact that we've moved to a greater proportion of contracted revenues through 2025 and going forward as the floor contracts start to take effect in the portfolio, this significantly de-risks the revenue assumptions in the business and therefore the valuations.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

During this time, while de-risking the revenue assumptions for the business, we've maintained our discount rate approach, which we believe is the highest weighted average discount rate in this sector for such a portfolio. It's something we're looking to maintain. We want to ensure that our valuations are appropriate, that they are certainly achievable, but we believe there's hopefully upside to come in the overall valuations of the company because at the moment these valuations don't include things like the alternative revenues, new pipeline that we're building at the moment, and further augmentations potential in the portfolio. There is opportunity to keep this valuation growth going.

[James Bustin, Assistant Fund Manager at Gresham House Energy Storage Fund Plc]

Hopefully, if we go back to the previous slide, we start to see less of the downgrades on the curve side, and we can enjoy more of the benefit from what we're delivering as part of the team. Ben, if you would like to talk about this one. You're on mute, Ben.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Rookie mistake. Apologies, everyone. Thanks, James. Coming back to this one, we've been talking about the underlying sort of aggregated EBITDA of the portfolio to try and illustrate a metric that isn't all about discounting future cash flows, but actually looking at the EBITDA today. As we've mentioned, we generated total revenues of GBP 60 million on the portfolio of 1.07 GW last year, but not all of those assets were online. That's based on something close to GBP 70,000 per MW per year.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

If we were just to take that and look at the middle column here just to sort of help illustrate the business on a steady-state basis, once we've got 1,072 MW that are all online or being augmented and so on, the underlying revenue base based on last year's revenue rate on the assets that were online, it would be nearer GBP 76 million, GBP 75, GBP 76 million. We expect a lot of that to fall through to the bottom line because we continue to accrue the costs associated with the projects even when they're offline. That would take EBITDA mechanically up above GBP 50 million, which, if you look further below, just sticking to the EBITDA assumption, that would take the EV/EBITDA of the portfolio on a steady-state basis to less than 12x. As James and I have said, we're driving growth in the incremental megawatts.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We expect that the growth in incremental capital is less than the incremental EBITDA required, therefore taking down these ratios over time. Of course, alternative revenue should be a driver as well. This is hopefully sort of helpful to continue to report against alternative metrics. James, next slide, please. Just a moment on this, in terms of coming back to the market, which we haven't talked about much, although I did mention a moment ago around competing gas assets and so on. What's going on over the next five or so years is pretty extraordinary. When you look at the graph on the upper right-hand side of this chart or page, you can see that in 2025, we had a little over 30 GW of wind.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

A lot of that onshore wind, about half of it, actually, and about half offshore wind, which has the significantly greater capacity factor. Most of the incremental growth is coming from offshore wind in the next five years, and we can see from this that by 2032, it's expected to double. By 2030, it's expected to get to 50 GW. In terms of generation, by 2030, there's real potential for this total generation to double, given that the capacity factor of offshore wind is getting close to 50%, while onshore it can be anywhere between 25%-35%. There's very substantial growth in intermittent wind generation and also very substantial growth in solar generation, which has a much lower capacity factor, but has a very large impact in the sunnier summer months, given that that's when the generation occurs.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Then when you think of an incremental megawatt of anything coming online, if that's going to generate at a time when there's already saturation, it's only going to add to that saturation at the same time, given that it's driven by the same factors, whether it's sunshine or wind. That means that you need a one for one increase in the megawatts from that technology and batteries if you really want to solve the intermittency problem. That's not what you're seeing on this chart. The underlying picture just becomes more and more robust for the market if you assume that we're getting much more renewables, because we are, because they're contracted CFD projects, for the most part. We've got an undershooting based on third-party forecasts in battery growth.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

There's still substantial growth, and a lot of it's at a longer duration, but there's a lot of catching up to do. If we do see the underlying gas assets, which are doing most of the running today in terms of providing flexibility. Because they can't store, we end up with the curtailment that gets reported on the front pages. The batteries are going to have to do a lot of catching up, and a lot of focus is going to have to come on, and reliance on batteries is going to increase a lot. I think the macro picture is going to improve even if we don't see an improvement in the skip rate picture, which we do expect as well. Although I must say that I'm talking about something that happens over a 3-year to 5-year horizon, not something that happens immediately.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Also going on in the background is finally a recovery in electricity demand, driven by electrification, and that's likely to accelerate given current circumstances, and AI data centers and other data centers, and the growth associated with them, and demand associated with them. There's 50 GW of demand queue in the U.K. for data centers at the moment. We only consume on average 30 GW-35 GW. Now, I'm not saying it's going to double as a function of that. A lot of those won't get built, but it's going to add to demand. There's a lot of positives in the background in terms of drivers for the need for storage. Thank you, James. Next one. Thanks. Just to wrap it up, we've got a lot going on this year now. We've got to complete our augmentations. We've got to get our pipeline into construction.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Delighted to have painfully come out of the back end of the Gate 2 process. Still waiting for one project's connection offer, but it should come soon. Look forward to therefore closing out the financing, using this financing approach as a template for growth, and we might found others, and raising funds at a portfolio and project level rather than at a PLC level, because that's not possible while we trade at a discount. We look forward to scaling up our alternative revenues, having spent an awfully long time getting that into place and making sure we have a robust strategy here. We will scale it gradually, though, for caution, but we are excited about it. We look forward to gradually returning to sustainable dividends.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Obviously, this year there's a small dividend announced, and there's a placeholder in the board's calendars, in a manner of speaking, to advise the market in terms of what capital allocation will be for announcement at the end of this year, and refreshing at the end of this year. Look forward to providing more information on that as well. With that, I'm going to hand back to Rupert for Q&A.

[Rupert Robinson, Managing Director at Gresham House]

Ben, thank you, and thank you also to James for that informative presentation. Significant progress made over the year on multiple fronts, so well done to the team. Please send in any questions you'd like us to address online. There were one or two that came in prior to this webinar, and I'll just ask those initially, and then we'll work our way through the online questions. First one, please explain the difference between your valuation model and the share price?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Interesting. Okay, I'll try. The valuation model is straightforward because we can define it, and that is the discounting of existing assets, including those that are partially through construction at any moment in time, which are discounted at a higher discount rate. Then we just take a finite line for those projects, discount those cash flows back, adjust for any balance sheet exposures across the portfolio, and at the PLC level, and out comes the NAV number. Then it's divided by the number of shares to get the NAV per share. That's revised by rolling the model forward every quarter, and using revised revenue forecasts, which come from the third-party consultants, and anything else that needs revising, whether it's costs or balance sheet positions and so on. That's the NAV.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

The share price is at a discount to that, and I could speculate, I could almost self-castigate and flagellate in terms of why we trade at a large discount. We see this as a growth company. We think that we are worth what the NAV states. We think we're worth more than that, too, given the growth we're driving and the reinvestment of capital into the business. That's clearly not rewarded in the market, and I think we need to prove ourselves to achieve growth and recovery in the share price to start with, and then growth beyond that, if that's at all possible, in terms of the share price. We know that the actual growth will come, and providing the confidence that we can grow. Showing our funding strategy and the ability to grow is key.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Demonstrating our success in our overall three-year plan, and in particular, alternative revenues, I think, incrementally, is key as well. Then generally, I think there's a nervousness that renewable assets, battery assets, are sort of out of favor. The green agenda is questioned a lot, especially among Telegraph readers. The reality is that if you, and I did this recently, I looked up what is the support in surveys or electorate, for renewables in this country, and it's still up at the sort of 90% level. It's extremely strong, and we should not forget that because the press does try and tell us other things. Anyway, we've got this very, very significant transition to very significantly higher levels of renewables in the next few years. We've got batteries absolutely needed in that context.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We're not seeing the refurbishment, or new build of CCGTs, gas assets, in other words, combined cycle gas turbines, at anything like the rate needed to sustain their installed capacity over the long term. The reliance on batteries will increase. We believe that trading in this market will become more favorable as gas assets come offline and as the introduction of further improvements in the control room as well come through. Hopefully that leads to confidence in the business as well.

[Rupert Robinson, Managing Director at Gresham House]

Ben, thank you. One here on battery duration. What is your plan for 1-hour batteries? Are you looking to augment or sell down and recycle the cash into 2-hour and 4-hour ready-to-build projects?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Hopefully you saw in our presentation that the average of our portfolio will reach 1.9 hours by the end of this year. We are doing exactly that. We're upgrading anything of a shorter duration, especially 1-hour-ish, up to 1 hours-1.5 hours and below, Glastonbury being a good example of what we've fully refurbished. There was no point in keeping the sort of circa 30-minute duration of quite outdated batteries on the site. We've managed to install a roughly 2.2-hour system in place, and have scope to double that duration again, having prepared the space for further augmentation should we choose to do this in due course. Yeah, we are effectively doing that. We're adding to the duration of existing shorter duration assets and looking forward to the increased revenues per megawatt from that.

[Rupert Robinson, Managing Director at Gresham House]

Thank you. Next question. Are you feeling the benefits of U.K. government policy? Will these benefits increase?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Yes is the short answer. It's obviously a complex question, which stimulates a lot of thought, but I think the strongest point I can make is that we've got electrification well underway in this country, which is driving demand for electricity. There's support for all sorts of forms of electrification. There's still support for EVs, there's still strong support for heat pumps. We've got strong growth through the CFD regime for renewable generation assets, solar, onshore and primarily offshore wind, but also onshore wind as well. It was really good to see the huge result in the AR7, as it's called, auction round seven of the CFD regime. I forget exactly the upper single digits in gigawatts awarded contracts, just for installation in four years from last October. That's a huge amount of incremental capacity.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Good to see that it was awarded mostly to offshore wind off the east coast of England rather than in the far north of Scotland, where we've already got huge network constraints. There's a huge amount of reform activity. It's quite full on. It's quite exhausting sometimes. There's huge amounts of effort to try and improve on the system, but it is all for good reasons. We're supportive of the long-duration energy storage regime. We do think it should be opened up to batteries more than it has been, but that's a work in progress. Yeah, no, long answer short, it's good news. The attempts to reduce electricity prices by taking a significant portion of the ROC subsidy out of the electricity price. The carbon price support as well coming out from 2028 is very positive, announced in recent days.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

All these things are helpful to drive down the electricity price, and as we get more electricity demand, the very significant fixed cost burden per megawatt hour reduces. Because if the network is that fixed cost burden and we get more demand flowing over that, or supply flowing over that network, the cost per unit of installed network capacity drops. That could drive a virtuous cycle in the sector, and accelerate gradually the energy transition.

[Rupert Robinson, Managing Director at Gresham House]

Thanks, Ben. Pretty quick one here. Has the date of the CMD been set, and will it be both in person or online?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Thank you for the question. It's on the May 28th. We haven't sent out invitations or given any agenda at this stage, but it will be a webinar, for simplicity, and it's likely to be towards the first half of the day, but to be confirmed.

[Rupert Robinson, Managing Director at Gresham House]

Thank you. We'll obviously provide more details in due course. Is there any involvement in the LDES cap and floor projects?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Yes. There is. The LDES cap and floor scheme, it provides a 25-year index-linked revenue for LDES projects defined as projects of eight hours or longer duration. The way this works is that the government has set a real return, and I forget the exact number, but about 4.5% for projects, and the revenues are indexed into CPI over the 25 years. The job that bidders have to do, which has taken place already, and it's called the eligibility round, is to basically set your, slightly unusual in our eyes, you set your CapEx number and your CapEx, if awarded a contract, will then achieve that 4.5% real return, which will then translate into revenues and so on. That's the way they've decided to do it. The submissions have taken place.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We, Gresham, more broadly, the Gresham manager, has submitted, and some of the grid portfolio as well have submitted projects and been awarded. I think six eligibility sort of successes. In other words, we are shortlisted. It's a long shortlist, I have to say, of 77 projects in the country.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

It's substantially more than the government needs at this stage, or the market needs. If we're awarded one contract, it would be nice, and we'd be looking to build that. That's what's going on right now. There's 7 GW of maximum sought by 2030 by the powers that be. Significantly more than that's been made eligible or confirmed as eligible. A chunk of our projects have a future pipeline and so on and hopefully we'll win a contract somewhere. If that is the case, if that project then coming out of Connections Reform had a 2031-2035 connection, it would be entitled to accelerate, under that contract, its connection date to 2030 or sooner. That's a ramification of that as well. Our Ocker Hill, and other projects have been awarded, our Walpole project as well, have been made eligible.

[Rupert Robinson, Managing Director at Gresham House]

Thanks, Ben. Next question: Can you expand at all on what you mean by alternative revenues?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Certainly. We provided some more detail in the annual report. We've given a taster in this presentation as well. Ultimately, what we're trying to do, and I'll catch it in these terms, is basically to make more money out of our batteries and our battery portfolio. We're conscious that there is more value that can be made from these batteries, first through our own core business model, and we look forward to them being more well-utilized over time. That business model is essentially buying the wholesale electricity price at spot and selling it at spot, or in the day ahead market. Within a sort of 24-hour period. It's a very real-time business model, and we see that there is more value that you can capture.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

The batteries, as they are run today, contribute to the stability of the electricity from a frequency perspective, and to the stability of the system from a demand-supply balance perspective. We don't think we're well rewarded for that, and we don't think we're used enough to achieve that goal. When you look at the overall electricity price at GBP 250, give or take, in terms of just referencing the Ofgem price cap on a quarterly basis in the most recent quarter. Big chunks of that are fixed from, for example, network costs and subsidies. There's substantial other elements, and in particular, wholesale price, that is circa GBP 100+, that is our domain. As a percentage of the wholesale price, we earn, frankly, a very small proportion of that.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We think that there are ways of achieving better returns by changing the horizon that we make trades over and where we position trades in the market. I know that's not a complete answer, but that is what we're doing. It's not a complete answer because we're not saying exactly what we're doing, and there's a reason for that, sadly, which is that it's commercially sensitive. It could be done by others. It would take them time to work out how best to do it as we have, I think. We don't want to lose our head start in this area. We're going to keep quite quiet about how we're doing it, in the same way that I suppose we don't give great detail about how we carry out our optimization.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We are ending up with another layer of revenues, which has an inverse correlation to our existing layer of revenues, that therefore are complementary and we think improve the risk-adjusted nature of the portfolio's revenues and business, overall profits.

[Rupert Robinson, Managing Director at Gresham House]

Thanks, Ben. Next question. What is the typical cost to augment from 1 hours-2 hours or 3 hours-4 hours in terms of pound per megawatt?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

From 1 hours-2 hours and 3 hours-4 hours, it wouldn't be a very different number, by the way. Just as a reference point. You would be looking at adding batteries, associated cabling, and, depending on how you're going about it, you might need to change some other equipment. In simple terms, you'd be adding batteries, associated cabling, and foundations, and other civil works. That's what you're doing primarily. Then you might sometimes have to upgrade a piece of switchgear or add inverter capacity or something else. The cost of batteries, I'll illustrate, and we share a chart in our annual report. We'd ask you to reference that, and I would say that that reference is well over 50% of the cost of doing this.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

The cost of the civils is relatively modest. We haven't disclosed what it is, and it's obviously commercially sensitive. I would say that the battery cost is a majority of the cost, circa 75% of the total cost.

[Rupert Robinson, Managing Director at Gresham House]

Thank you. Can you talk about the potential revenue impact for batteries from the government's plans to de-link the cost of gas and electricity prices?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Short answer is none. Next to none. What's going on here, I fortunately heard that there's been some more detail provided in the FT overnight. The idea here is to try and convert ROC remunerated, RO, Renewables Obligation, which is a subsidy scheme that preceded the CFD, to become CFD remunerated projects. The clear line in the article, and other places, is that there's no intention to change the wholesale market system. Gas will continue to set the price, but when renewable generators and solar generators in particular that are benefiting from a very high price, whatever that is, they have to give that back above the CFD level, hence the Contract for Difference expression.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Therefore, it gets repaid and caps the return, but also provides a guarantee of the minimum return, and therefore provides a better contracted level, which I always think provides a lower cost of capital to the industry. I think that's all positive. It does mean that in the real-time wholesale market, there's no impact on our own trading, which is key, I think.

[Rupert Robinson, Managing Director at Gresham House]

Thank you. What is your opinion on NESO not procuring stability from any batteries in the latest auction?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

I'm not surprised. These ancillary services can be provided by other assets, basically more cheaply. I think it's helpful that batteries have the features to be able to provide this, whether it's reactive power, voltage regulation, black start, whatever other features that the network needs, beyond the frequency response that batteries are well-known to provide. I'm not too surprised, because it can just basically be done more simply and with others. I don't think it's prejudiced. I think it's just the commercial outcome.

[Rupert Robinson, Managing Director at Gresham House]

Okay, thank you. Quick one here on battery technologies. What battery technologies do you use? Only lithium-ion or vanadium flow technology too?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

No, just lithium-ion and lithium-ion phosphate, to be exact. We do have some NMC or NCM, some people call them, nickel manganese cobalt technologies, in the older part of the portfolio, which perform very well. The LFP technology has taken over from a cost perspective in particular, although do provide more challenges from a state of charge measurement and energy density perspective. We've mostly migrated the portfolio to LFP, which has lower cost, longer life typically, and better safety features as well.

[Rupert Robinson, Managing Director at Gresham House]

Thank you. Can you remind me if GRID owns the land the assets sit on, and approximately what proportion is leased?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

The majority is still leased, but we do own the land underneath a reasonable proportion of our projects. I don't have the exact percentage in my head, maybe 20%.

[Rupert Robinson, Managing Director at Gresham House]

Okay, there's a question here around, given the delays in connection for a material portion of the construction pipeline and the associated pushing back of cash flow shareholder returns, do you think there's a strong argument, given the persistent discount to NAV, to run a formal sales process for the company? Just before you jump in there, I don't think it's the manager's prerogative to-

[Ben Guest, Managing Director of Energy Transition at Gresham House]

No.

[Rupert Robinson, Managing Director at Gresham House]

-comment on whether the company should be put into a sales process. I think the company and the manager focus on driving shareholder returns as set out in the three-year plan, and we're confident of delivering on that. I don't know whether there's anything you want to add to that, Ben, but I thought I'd just ask the question as it was sent in.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

No, thank you. I think it's useful to say that if you look at the three-year plan's target, which is GBP 150 million, and you look at the alternative revenue part of that's GBP 25 million, you're left with GBP 125 million that need to be generated from the target portfolio. By missing out on the growth, and I don't want to underplay it, because it is frustrating, but by missing out on a little under 300 MW out of 1.8 GW, or 0.3 GW out of 1.8 GW, we still hit somewhere in the upper 80s% of our GBP 125 million asset-related EBITDA target. Sorry, of our overall target, once you add back in alternative revenues. Apologies, I did get wrong those numbers before. We're still going to be, all being well and then hitting the targets, achieving a significant percentage, square brackets, GBP 120 million+.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

If this business is generating GBP 120 million of EBITDA, I do believe it deserves to be in a different postcode to where it's sitting now. It is disappointing, but the growth isn't going away. We're dying to tell you more about it at the CMD on the 28th of May, because there will be some positives, not just further elaboration on the delays. We can't say anything now. We need to finalize our view of the world with our board in the interim. We think this is a growth company with access to capital to grow, even if it's more complicated than sorting the capital at the top. No, we're excited about our three-year plan, the value that delivers, and the valuation that that deserves, admittedly, in due course.

[Rupert Robinson, Managing Director at Gresham House]

We'll be setting a lot more detail out on that plan.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Yeah

[Rupert Robinson, Managing Director at Gresham House]

At the end of May. Thank you for that.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Sure.

[Rupert Robinson, Managing Director at Gresham House]

Can you give any details on your use of AI to improve efficiency and add value or added value, I should say?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We're starting to use AI in all sorts of different ways. We've got data scientists. AI can be called AI because there's an LLM in the background or a large language model in the background, or it can be just anything that uses intelligence and data science to inform in an intelligent way. We're using data scientists and data science extensively in our three-year plan, in our back testing and our back casting. In other words, running a new plan in a historical data set. Our optimizers use the same sorts of technology, data science and broadly trend following and so on, and forecasting for our own trading and optimization purposes. Then we're using AI more generally with the likes of Claude and ChatGPT for presentations, modeling, and acceleration and productivity of the underlying sort of day-to-day business in the office.

[Rupert Robinson, Managing Director at Gresham House]

Thanks, Ben. I'm conscious we're three minutes away from 11:30.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Yeah.

[Rupert Robinson, Managing Director at Gresham House]

Maybe a couple more questions. How much of the capacity of your existing portfolio will you be able to earn alternative revenues on, or you anticipate earning alternative revenues on?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

This is still a work in progress, but ultimately if successful, and we did provide a timeline in our presentation and in the annual report as to where we expect to get to towards the end of this year, all being well, subject to continuous review. Now, like I said, we haven't disclosed anything, and we've yet to set a formal target, but somewhere in the region of 50% of operational capacity is probably a reasonable rule of thumb. Yeah, 50% of operational capacity, which is a rising number as well.

[Rupert Robinson, Managing Director at Gresham House]

Okay. One final question. Any update or insights on skip rates?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Yes. Just, I'm conscious of the time, but-

[Rupert Robinson, Managing Director at Gresham House]

Yeah

[Ben Guest, Managing Director of Energy Transition at Gresham House]

-the skip rate topic is interesting. Dangerous words. There's a need to change the system which historically balanced the market with a handful of very large assets dealing with only significant fluctuations in demand, not supply. Right? That's the history. We've now gone to thousands of BM, Balancing Mechanism registered assets, incredible intermittency. You get oversupply as well as undersupply, and not just volatility in demand, which was modest, but significant volatility in supply. It's a really complex picture. The system operated historically, mostly using individuals who relied on different incremental amounts of software, more for information purposes, to try and help them make the right decisions in the control room. The idea is that the Open Balancing Platform integrates all that incremental software, basically puts everything in one place, the OBP, Open Balancing Platform, and dispatches assets ultimately in an automated fashion.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

We're not there yet, number one, in terms of the Balancing Mechanism being operated in that way. The additional point I would make is that there's a problem in terms of how assets are thought of ahead of the Balancing Mechanism timeframe. In other words, real time plus an hour before. If a gas asset or an asset that's not going to be available in the future is about to become unavailable, but might be useful, then NESO basically typically reserve that asset. Once it's reserved, if it's used then for subsequently, even if it's not economical versus a battery, it is not counted as a skip. That's a problem for us, and that's the fundamental problem that needs solving incrementally versus where we are today.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

It's great to see that large amounts of capital, time, and people resources are being concentrated on solving this with an awareness of where we're heading in terms of increased reliance on batteries versus gas assets.

[Rupert Robinson, Managing Director at Gresham House]

Thanks, Ben. One final question. Apologies if I missed this, but if you are targeting GBP 120 million EBITDA in the long term, what are you expecting the fully consolidated debt to be when you reach that level?

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Allow us to provide more information about that at the Capital Markets Day.

[Rupert Robinson, Managing Director at Gresham House]

Okay.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Regarding that question, I think we can provide more color on that.

[Rupert Robinson, Managing Director at Gresham House]

Okay. Well, I think that ends this morning's presentation. Ben and James, thank you for your time this morning and the informative presentation. As Ben highlighted, we will be hosting a Capital Markets Day on the May 28th, and sending out invitations and agendas in the not-too-distant future. Thank you to everyone who dialed in this morning. Thank you to shareholders, and even prospective shareholders, and we look forward to speaking to you all very soon. Thank you.

[Ben Guest, Managing Director of Energy Transition at Gresham House]

Thank you.

Participants

Executives

• James Bustin, Assistant Fund Manager

Analysts

• Ben Guest, Managing Director of Energy Transition at Gresham House
• Rupert Robinson, Managing Director at Gresham House