Gore Street Energy Storage Fund PLC 200 MW acquisition in California (2204Q)
February 17 2023 - 1:00AM
UK Regulatory
TIDMGSF
RNS Number : 2204Q
Gore Street Energy Storage Fund PLC
17 February 2023
17 February 2023
Gore Street Energy Storage Fund Plc
('GSF' or the 'Company')
200 MW acquisition in California
First acquisition in CAISO grid, and the largest acquisition to
date in the US
Gore Street Energy Storage Fund plc (ticker: GSF), London's
first listed energy storage fund supporting the transition to low
carbon power in the UK and internationally, is pleased to announce
that it has agreed to acquire Big Rock, a 200 MW / 400 MWh energy
storage project (the "Project") located in Imperial County,
California, United States from Avantus (the "Seller" - formerly
8minute).
Following this acquisition, GSF's internationally diverse
portfolio will consist of 27 projects with a total capacity of
1,173.2 MW of operational and construction assets across the UK,
Ireland, Germany and the Electric Reliability Council of Texas
(ERCOT) and California Independent System Operator (CAISO) grids
within the US, offering investors exposure to five different grid
partners. Big Rock will be the Company's first investment in
California and further diversifies the Company's revenue streams
and geographic exposure. The Project will be connected to CAISO,
one of nine independent system operators (ISO) in North America.
The CAISO grid provides electricity to 80% of California and a
small part of Nevada.
CAISO offers a particularly attractive opportunity for energy
storage investment due to California's significant deployment of
solar capacity and ongoing retirement of baseload thermal
generation across the state, creating significant opportunities for
services that aim to deliver stability to the grid. The asset will
support CAISO's grid by providing ancillary services while also
participating in the capacity market (Resource Adequacy) and
wholesale trading.
The construction-ready Project has secured material land rights,
planning consents and a grid connection scheduled for H2 2024.
Commercial operations will commence shortly thereafter as a battery
supply contract for all battery cells for the two-hour duration
site, and engineering procurement and integration contracts have
been secured.
The Project will be eligible to benefit from an investment tax
credit for up to 30% of qualifying capital expenditure via the
Inflation Reduction Act, which was passed in late 2022.
The Project acquisition costs, including capex spent on or
around the closing date, is approximately $110 million, including
development fees and milestone payments to date for an EPC contract
of all battery cells. Following the transaction, the Company's cash
position is c.GBP144 million, of which c.GBP66 million is already
committed through contractual obligations to construct announced
portfolio projects. The remaining funds are allocated to the
Company's pre-construction / construction projects but are not yet
contractually committed.
Gore Street's investment manager, Gore Street Capital Limited
(the "Investment Manager"), estimates the Project will have an
unlevered IRR in the range of 10-12%, in line with GSF's
target.
Patrick Cox, Chair of the GSF Board, commented:
"We are delighted to announce this landmark international
acquisition for the Company. This is the Company's first
acquisition in the Californian market and follows our successful
entry into the energy storage markets of Texas and Germany in
2022.
With this acquisition, the Company is now diversified across
five high-growth grids, underpinning our push into international
markets, where we continue to see attractive new investment
opportunities in line with our target returns. We remain dedicated
to performing competitively across the sector's core metrics - cost
per MW and revenue per MW / MWh - as this ultimately drives returns
for shareholders.
We look forward to updating the market over the next 18 months
as 361.7 MW of projects are set to become operational across Great
Britain, Ireland and Texas."
Alex O'Cinneide, CEO of the Investment Manager, is a
non-executive director of the Seller and holds employee ownership
plan units in the Seller. In order to manage any actual or
perceived conflict of interest arising in relation to the
acquisition of the Project, Mr O'Cinneide has not participated in
any discussions concerning the approval of the acquisition and the
Company's board of directors has approved the transaction.
For further information:
Gore Street Capital Limited
Alex O'Cinneide / Paula Travesso Tel: +44 (0) 20 3826 0290
Shore Capital (Joint Corporate Broker)
Anita Ghanekar / Rose Ramsden / Iain Sexton (Corporate Advisory) Tel: +44 (0) 20 7 408 4090
Fiona Conroy (Corporate Broking)
J. P. Morgan Cazenove (Joint Corporate Broker)
William Simmonds / Jérémie Birnbaum Tel: +44 (0) 20 7742
(Corporate Finance) 4000
Buchanan (Media enquiries)
Charles Ryland / Henry Wilson / George Beale Tel: +44 (0) 20
7466 5000
Email: Gorestreet@buchanan.uk.com
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.
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END
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