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To provide a sustainable and attractive long-term dividend by investing in a diversified portfolio of utility scale energy storage projects located in the UK, North America and Western Europe.
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What is good for the goose is also good for the gander. Thanks SB for your post...
Interesting RNS from GRID today with quite a lot of detail on BESS revenues post the marketplace changes made in Q1. Key points:
"Revenues since 11 March 2024 have improved due to:
1) The launch of Balancing Reserve (BR), a new reserve product which has launched initially with a small volume of 400MW. Reserve requirements in Great Britain are for several gigawatts (GW) every day and this level will grow as renewable generation increases (as this drives up the volatility of supply). As the ESO launches a new suite of reserve products through 2024, including Quick Reserve (QR) in summer 2024, we expect to see the Reserve volume that BESS can compete for increase.
2) The ESO changing the '15-minute rule' for BESS, whereby the maximum duration of any BESS trade in the BM was limited to 15 minutes, to a '30-minute rule'. This change was required to deliver BR but is also leading to a greater use of BESS assets, although to date it has not led to a meaningful reduction in skip rates.
3) Improvements in wholesale markets, driven largely by a return of negative prices. This has led to increased trading spreads and the return of a second cycle opportunity in most days. Flat daytime prices over the winter mostly limited BESS assets to lower cycling. The rise of solar generation in warmer months means negative prices in the middle of the day, as well as overnight, creates two distinct trading cycles, in turn leading to improved revenue opportunities. Negative prices occur when renewable generation needs to be curtailed. Through mid-April 2024, GB has experienced more than three times the number of negative prices than at the same point in any of the prior four years. The trend of increasing negative prices is expected to continue as renewable penetration increases."
https://www.londonstockexchange.com/news-article/GRID/bess-portfolio-revenue-update/16437429
Think this may be near the bottom now so have taken a small position here.
AJ Bell on the 12th
Yep same here HL on 12th
Hi
I'm on HL mine came in on 12th
Has anyone received the dividend from the 12th April yet? Freetrade still haven't paid it into our accounts.
The news from GRID cancelling the divi won't have helped here
Https://www.britishbulls.com/SignalPage.aspx?lang=en&Ticker=gsf.L
Well I added more today. Sentiment will change sometime.
I’m really at a loss to know what can draw a line under this SP. A well diversified portfolio and assets coming on stream in key areas and yet here we are?
This is good news for the UK component of GSF's revenue.
https://modoenergy.com/research/gb-benchmark-index-battery-energy-storage-march-2024-revenue
I agree, topped up last week at 61.1p. The confirmation of the dividend last month was a confidence booster for me to invest more. We need 9 years of dividends for a free ride and let's be honest, BESS will not disappear in the next 5 years with so much focus on green energy. I am also thinking as EV infrastructure gets better and more cars are sold, energy requirements will increase - a typical EV battery requires 70kw + for full charging - that is a lot of electricity when compared to typical household use of electricity without EV. I am not sure where is all this extra capacity coming from?
GLA
I'm sure they will use asset life when calculating NAV (built into revenue curves). Doubling capacity this year. Great 12%+ yield right now, and they just confirmed the dividend policy as 7% of NAV.
So topped up this morning. Seems well oversold on sector woes.
The UK is not regulating their energy grid, they are leaving it to fend for itself. that measn potentially prices could end up being volatile since at some point compqanies will stop investing in UK BESS, in fact its already starting now - if the low prices continue then there is no incentive and it squeezes supply. maybe in 4 years they will regret it but maybe uk will just abandon the green transition (even so they would still need more storage). all in all it seems likely that this is a cyclical market currently at a low but the UK may be more volatile than others since it has no regulation/contracts or guaranteed payments etc for the BESS operators
That makes sense. If what you say is true then I guess that the mandate of having 40% of their assets in the UK is a bit of a millstone then!
Its not about the age but number of cycles. batteries in storage last around 5000 cycles and probably have a warranty for that. i see that they have been using maybe 1.5 cycles per day on some of the cells from gore street so maybe 10 years for uk batteries. i think other batteries like the ones in ireland and usa may be using less cycles.
uk is a terrible place for doing storage at the moment as its many cycles and not much profit - you need a very good trader/operator to maximise the battery profits but gore street doesnt seem to have the good operator or the right long duration cells for this so im not sure if they can ever ahcieve good profits in uk.
their success really lies in ireland and usa
In their prospectus, it states that the asset life for their batteries is 10 years. In their latest reports, it states that asset life is 20-25 years with a repowering every 7 years. Since I'm a relatively new shareholder I wanted to ask on here is this discrepancy has been explained in the past, or if it's been discussed in the past?
My early memories of this stock was simple, safe and dependable but having got out close to the top, my rebuilding my position has been a nightmare. Whilst it looks tempting at this price I’ll not mind losing a bit to get in further with more stability and transparency. I honestly thought with a diversified portfolio and what is due to come online, this looked like a no brainer…, and could yet be
I dont think thats the issue. the issue is uncertainty in the revenue generation past 10 years or so.
the revenue curves and future revenue predicted by GSF is very easy to find and calculate from the reports - so you can easily make your ownn calculations and if you followed their curves you would find a NPV similar to their NAV. the issue is in believing that battery energy storage is going to be in the same format, capturing similar revenues for 20 years or more.
some of the risks are car batteries acting as grid stabilisation (would need some grid reform but i guess it spossible especially since car batteries actually store a lot of energy). sodium cells which maybe gore street could capitalise on later and maybe things like hydrogen or other chemical storage - though these have low efficiencies.
i dont really see other big risks - can the grid saturate to very low prices? yes but not for long since this reduces future investment. can lithium prices stay low for a long time? maybe another year or 2. can rates stay this high for a long time? it doesnt seem so based on job numbers and mounting risks.
@alibaba42 - I agree with your explanation of how revenue rates are calculated. GSF (and the other BESS funds) could do much more to help investors understand their impenetrable jargon IMHO.
Added some more today as well. Bottoming out?
Always good to see a director buying in. Don’t know why it’s taken her nearly a year but better late than ever!
I would also add that any changes to the environment and also any big artificial intelligence deployments would be potentially big positive catalysts for revenue - https://www.computing.co.uk/news/4190203/power-demand-uk-datacentres-set-surge-fold-decade#:~:text=John%20Pettigrew%2C%20the%20chief%20executive,and%20advancement%20in%20quantum%20computing.
i think its very likely to occur in the next 5 years onwards