Gresham House Regulatory News (GRID)

28 February 2022

GRESHAM HOUSE ENERGY STORAGE FUND PLC

("GRID" or the "Company")

Capacity Market (CM) Auction 2022 and NAV uplift

Gresham House Energy Storage Fund plc (LSE: GRID) is pleased to provide shareholders with an update on the 2022 Capacity Market auction results for the portfolio.

The recent T-1 and T-4 Capacity Market ("CM") auctions* which took place on 15 and 22 February respectively have both cleared at record prices. The Company entered operational and pipeline projects into both auctions and as a result has been awarded several Capacity Market contracts which are expected to earn revenues of over £108m (assuming CPI at 2%) over the life of the contracts. These revenues are incremental to revenues currently used in our valuation models and in producing our Net Asset Value ("NAV") per ordinary share ("Ordinary Share") estimate.

Key highlights of the auction results include:

- T-1 auction for 1-year contracts starting in October 2022, cleared at £75,000 per MW

- T-4 auction for 15-year contracts starting October 2025, priced at £30,590 per MW

- GRID was awarded contracts for:

o 112.0MW of de-rated capacity** in the T-1 auction for 325MW of projects

o 180.4MW of de-rated capacity** in the T-4 auction for 463MW of projects

- Contracts were awarded to both operational and pipeline projects

- T-1 contracts are expected to add £8.4m in revenues over one year

- T-4 contracts are expected to add approximately £100m in revenues over the 15-year period, assuming CPI at 2%

GRID's project valuation models assume no CM revenues until contracts are in place. These contract awards will directly contribute to the Company's NAV and are expected to add approximately 15 pence per Ordinary Share to NAV over time. The impact on the Q1 22 NAV is expected to be a positive uplift of approximately 5 pence per Ordinary Share. The remaining NAV uplift of approximately 10 pence per Ordinary Share is expected to come in subsequent quarters from assets which are under construction as they are revalued based on future cashflows, in line with the Company's valuation policy, and include the benefit of these CM contracts.

The Company expects to publish its Q4 2021 NAV alongside its Annual Results in April 2022. The uplift from these recently awarded CM contracts will not be included in Q4 2021 figures. The Q1 2022 NAV is expected to be published in early May 2022 and is expected to include around 5 pence of the approximately 15 pence overall NAV uplift announced today.

The full results of both recent CM auctions can be found on the EMR delivery body website: https://www.emrdeliverybody.com/CM/Auction-Results.aspx

John Leggate CBE, Chair of Gresham House Energy Storage Fund plc commented:

"The Capacity Market offers valuable government backed contracted revenues to the portfolio. The 15-year T-4 contracts in particular will further enhance dividend cover and shareholder returns over the longer term."

Ben Guest, Lead Fund Manager and Managing Director of Gresham House New Energy, added:

"The Capacity Market is a vital tool for National Grid to ensure sufficient dispatchable generation to meet demand requirements as renewable generation expands, intermittency rises and as battery storage installations continue to lag renewable deployment.

We are very pleased with the results of the latest auction and the large volume of contracts we were able to secure for the Company's portfolio and pipeline. This increased level of contracted revenues also supports our existing financing arrangements and any potential future arrangements."

* T-1 and T-4 auctions relate to contract start dates occurring one and four years respectively after the most recent 1st of October, in these instances referring to 1 October 2022 and 1 October 2025.

** Contract prices are paid against the de-rated capacity of assets. De-rated capacities are determined by applying the relevant de-rating factors for the technology type, and in the case of batteries also their duration, to the connection capacity of the asset. The de-rating factors are set by the Electricity System Operator ahead of each auction so that available energy is comparable between different technology types.

For further information, please contact:

About the Company and the Manager:

Gresham House Energy Storage Fund plc seeks to provide investors with an attractive and sustainable dividend over the long term by investing in a diversified portfolio of utility-scale battery energy storage systems (known as BESS) located in Great Britain, Northern Ireland and the Republic of Ireland. In addition, the Company seeks to provide investors with the prospect of capital growth through the re-investment of net cash generated in excess of the target dividend in accordance with the Company's investment policy.

The Company targets an unlevered Net Asset Value total return of 8% per annum, calculated net of the Company's costs and expenses.

Gresham House Asset Management Limited is the FCA authorised operating business of Gresham House plc, a London Stock Exchange quoted specialist alternative asset manager. Gresham House is committed to operating responsibly and sustainably, taking the long view in delivering sustainable investment solutions.

www.greshamhouse.com

Definition of utility-scale battery energy storage systems (BESS)

Utility-scale battery energy storage systems (BESS) are the enabling infrastructure that will support the continued growth of renewable energy sources such as wind and solar, essential to the UK's stated target to reduce carbon emissions. They store excess energy generated by renewable energy sources and then release that stored energy back into the grid during peak hours when there is increased demand.