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To provide an attractive and sustainable dividend over the long term by investing in a diversified portfolio of utility scale operational energy storage systems, which utilise batteries and generators, located in Great Britain.
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Been a few weeks since update and last share buyback announcement. Aren't we due more? Presumably its a matter of timing their buys
Battery energy storage systems (BESS), is pleased to provide shareholders with an update on the 2023 Capacity Market auction results for the portfolio.
The latest T-1 CM auction concluded on 20 February 2024, clearing slightly higher than expected at a price of £35.79/kW. The Company has secured additional 1-year contracts across 13 of its Projects with a total derated capacity of 90.491MW. In total, the additional contracts are expected to generate £3.2mn of additional revenue from October 2024 to September 2025.
In the valuation process for the Company's assets, CM revenues are only included where contracts are held at the date of valuation, therefore these new contracts are in addition to current revenue assumptions and are accretive to NAV. The NAV benefit from these contracts will be recognised at the next valuation date of 31 March 2024.
Ben Guest, Fund Manager of Gresham House Energy Storage Fund plc, said: "We're pleased with these results from the latest annual Capacity Market auction, as well as their expected positive contribution to our NAV from 31 March 2024.
"One of the great attributes of battery energy storage systems is their flexibility. We can swiftly and remotely configure our software to tap a wide range of potential revenues available to BESS without needing to make any physical changes to hardware. These revenues include both contracted income such as the Capacity Market auction results we're announcing today, as well as merchant, or trading, revenues."
Very good read, thanks for posting.
@oldman, a few key points:
- Several restrictions due to be removed in March. Early indicators suggest could treble volume.
- Another important upgrade appears to be regarding systems integration for understanding supply. My take is that ESO systems currently don't gather sufficient data to justify BESS, but that the system will be changed to increase data feed, which in turn will result in more BESS being used.
- ESO taking BESS v seriously, largely on response of "strong industry pressure". Again, v good for us.
Overall, reads like v positive developments. However, it is the "time will tell" story here. Could be towards late 2024 once market may be considered to be nearer a normalised status
Thanks for the link which I have read but did not fully understand! The gist appears to be that things are moving in the right direction for battery energy storage operators, I think! Is anyone able to explain the new developments in layman’s terms?
Good article from Timera explaining how the recent changes should be starting to help BESS.
https://timera-energy.com/our-latest-views-on-bess-value-capture-in-the-bm/
Nice to see directors taking advantage too. Everything out in the open. Work to do, but should be a solid long term investment from here. I started building a bit too soon, but happy with my ending position.
GLA
Likely no more buy backs for this next week or so. Forget the term, but was something like a restriction on buying 6% over average bid during the preceeding 5 trading days... so, given the jump today, cool off period required before more buy backs can resume.
Still, it is nice to have some green candles on the charts.
Re: average down, this remains highly discounted. Obviously the biz isn't out of the woods yet, and the sector still has big problems. But potential upside here over the next 18 months or so remains extremely attractive. I'm going to DCA up with my monthly SIPP contributions anywhere under 80p
You were right. It was clearly panic and heavily oversold. Wish ow I'd bought more and averaged down but lacked the courage. It is unclear how much buy backs actually happened but far less of cost than the dividend earmarked for distribution.
Buy backs taking effect in lower volumes, as expected. The panic is subsiding, and we should climb slowly past 60p, towards 70p, I hope!
The price of Natural Gas is now $1.823 per MMBtu back to where it was in 2020
And wind farms suffering too;
https://www.bbc.co.uk/news/articles/c9786p4qd83o
PS: nice to finally have a green candle. But that said, given ~250k in buyback + Director buys within the past few days, the fact it hasn't risen more suggests that either there were loads of shares needing picked up, or there remains quite a bit of selling pressure. Actually quite possible this only continued to have dropped if the buyback wasn't announced
Lots of good points and practical examples on complications + delays.
Back to GRID I was a bit disappointed about US delays. Understand the need for financial prudence, equally have read on other BESS projects that other markets can generate 2-3x the revenues in UK due to all the issues we got here (part of the reason why GRID is at more of a discount than others).
@Rylidan, selfishly, I hope that the buybacks have effect in rising the price, not just stabilising it for you to buy more lol. Equally, trust you can get in at a good rate. In long term, anything under a pound is likely good value tbh
The Edison note is good and combine that with buybacks and director purchases today was a good day.
For me there are two main sticking points here one is the infrastructure and the propensity of the free market to revert to fossil fuels as price allows and natural gas is back to 2020 prices at approx $2.06 per Mmbtu down from a peak over $10 when Putler invaded Ukraine early 2022. On the infrastructure Gresham have extra KwH but the national Grid isn't connected.
I am helping out at golf club and we are looking to put 36KwH peak solar onto the roof and need DNO authorisation before we do as we may supply a few KwH in the summer months we can't use back the grid, the DNO can take 6 months!
Edison said this in March23 - Operational capacity rose to 550MW at end December 2022, a rise of 29% from the 425MW capacity at the end of the previous year. Capacity is set to reach 1GW in 2023 (a rise of 80% compared to end 2022) and around 1.5GW (+170%) in 2024. GRID’s manager expects this to drive further NAV and EBITDA growth.
Now they are saying All these projects are completed and ready for connection to the grid. Once this is done, operational capacity is set to rise from 740MW at present to 1,072MW by end-Q324. In addition, work is also underway to increase the duration of several of GRID’s already operational projects, which should add a further 340MW to its operational capacity and raise potential earnings from these projects by up to 40% at relatively low cost.
GLA
TBH it would be nice if the shareprice stayed nice and low while the buy back was in progress.
This has always been advertised as a minimum 5 year hold. I'm lucky enough to have had this on my radar for a while and feel this is an ideal time to accumulate a long term position. I have a strong feeling we won't stay under 60p for all that long. As soon as the current issues are resolved this should climb back up quickly. All IMO.
GLA
My read of this Edison note is one of cautious optimism and makes me more confident to average down at these prices as the downside now would appear to be fairly limited. That said all my readings about this company were positive but I'm still nursing huge losses over 3 months of holding GRID.
More in depth research note coming, but link to the flash announcement below. Note that you need to replace DOT with a "." and delete the spaces
www.edisongroup DOT com/research/responding-to-challenging-times/33212/?utm_campaign=EQS%20Press%20Releases&utm_source=EQS&utm_medium=Press%20Release
Wrt fees, I don't buy under £1k, normally £3k trades. That way the max fees I pay is £6 plus stamp duty, or a max of 1.1% of the purchase. For a £3k purchase only 0.7% fees. Even very large transactions incur the 0.5% stamp duty, so buying frequently or one big doesn't add a lot IMO.
Yes, good point Rylidan. Guess we are very fortunate they got a solid raise in before everything dropped.
Regarding the buyback, a first day purchase of almost £70k is nothing to be sneezed at (unlike the Director buys. Their holdings are pretty low). I don't think we know how much the total buyback package could be (or maybe i missed that detail), but dividend would usually be a 9.5 to 10 mill payout. If even half that went into buyback, it really could make a material difference. Nowhere near back to what SP was, but at least get it started
Yes Rejucht, the fees can be high for small purchases. Some providers can set up re-occuring buys from 1 or 2 pounds. Otherwise, so long as fees can be kept below 3% and mentality is for 2+ year time frame, then maybe combined fee/risk v reward could still be attractive.
Just noticed RNS today stating company has bought 133.9k shares at av 50.1p. Obviously a small number as only £70 k but can one infer that the BOD and Jefferies think the shares are good value at this price and may provide a floor to risk of major further downside? This buyback encourages me to dip a toe in the market at under 50p SP. Any other under water investors in GRID see it the same way as I do?
Tempting to buy small lots to average down but the dealing costs become significant for those of us subject to
flat rate fees. The share buy back could be a stop on the downside if the market guesses at what level it kicks in. I believe a company eventually publish the price they paid to buyback.
I agree JTS13. I'll be making small top ups over the next year. Only started a small position a few days ago and bought 5 small lots so far. This board is going quiet which is good news. The share buy backs will take time to have an impact, but they will when volume drops off. Crazy that only 8 months ago they issued 32m shares at £1.55 and now buying back for a fraction.
GLA
Here you go... direct link to the post:
https://twitter.com/Adam_Grant_Bell/status/1752693813007831101
I think this is a pretty extreme FUD period for BESS projects. Equally, I find it hard to believe this sector will be allowed to sink.
It is now a bit of a contrarian play. I am however looking to DCA down with small amounts over the next 3 months or so. Made first small purchase yesterday in SIPP. I won't be accessing that for years, and have multi-year horizon on everything within that account. Wouldn't go in here with regular ISA yet though, still too many unresolved headwinds. And the constraints on buy-backs may limit impact that they have once SP is over 60p again
Just go to twitter and search his name. Thread posted on 31st Jan. Very informative and crazy!!! Thanks Talt for posting