Gore Street En. Regulatory News (GSF)

6 July 2023

Gore Street Energy Storage Fund plc

(the "Company" or "GSF")

Portfolio and Trading Update

Energisation of 79.9 MW asset scheduled for July, trading update and a potential increase to ITC

Gore Street Energy Storage Fund plc, the internationally diversified energy storage fund, is pleased to announce the scheduled energisation of its 79.9 MW asset, "Stony", a positive portfolio update and potential qualification for increased ITC benefit for its US assets.

Energisation of 79.9 MW asset

The Company is pleased to announce that the energisation process of the Stony asset in Milton Keynes, GB, with a capacity of 79.9 MW, has been scheduled with National Grid ESO to begin on 31 July 2023. The process is expected to take up to two weeks to complete. Once operational, the asset will bring the Company's total operational portfolio to 371.5 MW.

Operational assets: revenue performance

*Based on Modo Energy data; Note (1) - classification for 1 hr system duration may differ slightly from exact integer value

Based on data provided by Modo Energy, the Company's Great Britain (GB) assets generated an average revenue of £7.62 / MW / hr for the 6-month period from January - June 2023. This compares favourably to the GB average for a one-hour system, which was reported to be £6.83 / MW / hr during the same period. Two-hour systems were reported to have generated, on average, just 7.6% more per MW than the Company's average during this period. Given the material increased capex required to build the additional duration, this supports the Company's view of optimal duration in this market.

As the GB market faces increased saturation and declining prices, portfolios solely dedicated to this market are experiencing decreasing revenues. The Company has effectively offset this impact through the strong performance of its international assets.

The Company's Irish portfolio, with a capacity of 130 MW / 72.6 MWh, generates the majority of its revenues from the DS3 (Delivering a Secure Sustainable Electricity System) program, which is Ireland's ancillary services market. This program was established to integrate non-synchronous generation, led by wind power, and rewards assets for their availability during periods of heightened grid volatility caused by System Non-Synchronous Penetration (SNSP).

From 01 January - 31 March 2023, the Company's operational Northern Irish assets, Drumkee and Mullavilly, played a significant role in driving revenue for the portfolio. They achieved an average revenue of £24.60 / MW / hr across the quarter. This high level of revenue was due to increased SNSP and strong asset-wide availability.

While Irish revenues declined as weather conditions stabilised and moved out of the winter months, extreme weather conditions in Texas resulted in a surge in revenues from the Company's operational portfolio in the ERCOT market from 01 April - 30 June 2023. Heatwaves experienced in the state caused power prices to spike; as a result, the Company's assets generated an estimated hourly average of $175 / MW / hr between 18 - 21 June 2023. In managing this volatility, the demand for energy storage enabled the Texas portfolio to deliver estimated average revenues of $14.76 / MW / hr for these three months.

In addition, the Company is pleased to announce that it has formed two new engagements with Tenaska and Enspired. These companies provide route-to-market services for the Company's assets in the US and Germany, respectively. Since establishing these relationships, the Company has achieved cost savings and gained access to additional revenue streams.

ITC benefit increased for US assets

The Investment Tax Credit ("ITC") forms part of the $369bn energy security and climate change initiatives available under the recently introduced US Inflation Reduction Act (IRA). This enables asset owners to deduct a percentage of the total cost of qualifying renewable energy projects from their federal taxes, including energy storage technologies.

Under the IRA, a basic tax credit of 30% is available, and additional ITCs can be obtained based on specific requirements. Per the 2022 unemployment data published by the Bureau of Labour and Statistics (BLS), the sites: Dogfish, Wichita Falls, and Mineral Wells (combined 95MW) all qualify for 40% ITC, provided that unemployment rates in these regions remain equal to or higher than the national average. This additional 10% ITC adder has yet to be factored into the assets' underwriting and represents a significant potential upside for shareholders.

Alex O'Cinneide, CEO of Gore Street Capital Limited, the Company's investment manager, commented:

"The continued strength of the Company's international portfolio further cements the success of our diversified strategy.

While GB has proved fruitful ground since the Company's IPO five years ago, we have anticipated for some time that market saturation will lead to a decline in GB revenue. The Company's decision to extend its portfolio across Ireland, mainland Europe and the US was driven by this foresight, and the performance of our entire portfolio illustrates the sound judgement of both the Company and the Investment Manager.

As well as currently benefiting from access to 19 revenue streams across four uncorrelated markets, the Company's established presence in the US means we are able to benefit from the positive legislative environment set by the Inflation Reduction Act.

These benefits will support the continued build-out of our construction portfolio, and we're delighted to have received a firm date for the energisation of the Stony asset. Building scale remains a key element of our strategy, with this site forming the first of over 500 MW the Company is set to bring online by the end of 2024."

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Notes to Editors

About Gore Street Energy Storage Fund plc

Gore Street is London's first listed energy storage fund and seeks to provide Shareholders with an opportunity to invest in a diversified portfolio of utility-scale energy storage projects. In addition to growth through exploiting its considerable pipeline, the Company aims to deliver consistent and robust dividend yield as income distributions to its Shareholders.