top-navigation-logo
Pricing
09 Mar 2022
Alex DoneAlex Done

The investment landscape for UK & Ireland battery energy storage

The landscape for battery energy storage investment in the UK and Ireland is one of the strongest globally and is growing fast. This article provides a high-level overview of publicly traded funds specialising in the development, construction, management, and monetisation of BESS in the UK and Ireland. Specifically, we’ll be taking a look at:

  • An overview of three large battery energy storage funds operating in the UK and Ireland.
  • A view of their historic share price and market capitalisation.
  • A forward-looking view of the funds’ portfolios.

BESS fund overview

Table 1 (below) gives an overview of the three funds covered in this article, with figure 1 (below) showing their historical market capitalisation.

Table 1 - Key publicly traded funds with significant BESS pipelines in the UK and Ireland. Sources for the above are as follows: GRID, GSF, HEIT (NAV details for HEIT are estimated and provided by Hargreaves Lansdown). Share price, market cap, and premium are based on closing prices from 1 January 2022.
  • Gresham House ESF (ticker: GRID) is the largest of the three funds across all metrics, with a market capitalisation of £571m, net asset value (NAV) of £490m and portfolio of 425 MW.
  • Harmony Energy Income Trust (ticker: HEIT) is the newest addition to the list of publicly traded BESS funds, following its IPO on 9 November 2021. HEIT floated on the London Stock Exchange issuing 210m shares, raising gross proceeds of £186.5m, and acquiring the Seed Portfolio of 213.5 MW shovel-ready sites from developer Harmony Energy- see here for more info.
  • All three funds are trading at a premium to NAV as of 1 January 2022.
  • In November 2021, the market capitalisation of UK and Ireland BESS funds exceeded £1b (as can be seen in figure 1 below).
Figure 1 - Historical market capitalisation of UK and Ireland BESS funds. Market capitalisation based on share issuance detailed in key information documents, and daily closing share price.

Fund performance

Figure 2 (below) shows the share price of the three funds, in addition to the market-capitalisation-weighted share price. The data below runs from July 2018 onwards, coinciding with the IPO of Gore Street ESF.

Figure 2 - Daily closing price of the three UK and Ireland BESS funds.

Figure 3 (below) compares the FTSE All-Share price to the market-capitalisation-weighted share price of the above funds to show the relative performance of publicly traded BESS. In both instances, prices have been rebased to 1 July 2018.

Figure 3 - UK & Ireland BESS funds and FTSE All-share normalised return from 01 July 2018-01 January 2022.
  • The average return of the aforementioned funds outperformed the FTSE All-Share between July 2018 and Jan 2022, with a return of 19.5%.
  • BESS funds’ share prices were impacted less than the FTSE All-Share following the announcement of the first COVID-19 lockdown, with UK & Ireland fund value falling just 12% over Q1 2020, compared to 29% in FTSE All-Share.

Pipelines

In total, the above three funds boast a current installed capacity of 635 MW across the UK and Ireland, with a substantial pipeline expected over the coming years. Figure 4 (below) details the funds’ portfolio evolution since 2018 in addition to providing a forward-looking view until 2024. All site locations (both existing and pipeline) are shown in figure 5 (below).

Figure 4 - Portfolio evolution for UK & Ireland BESS funds, including acquisition and new-build pipelines. HEIT pipeline is assumed linear as commissioning dates are currently not yet outlined, their key information documents state - "[The portfolio will be] built and commissioned on a staggered basis with the final project expected to begin operations by the end of Q4 2023".
Figure 5 - Existing and pipeline sites for UK & Ireland BESS funds’ portfolio.
  • The total portfolio size of the above funds is expected to reach 2196 MW by 2024, ~3.5x today’s figure.
  • Geographically, the majority of projects are located in GB, with Gore Street ESF the only fund to deploy capital in Ireland to date.

Appendix

Disclaimer

This article does not constitute financial advice and Modo Energy Limited will not be held liable for any damages resulting directly or indirectly from decisions made based on the contents or views expressed within this report.

Sources

Fund information (NAV, portfolio size, share issuance and market capitalisation) is taken from annual/interim reports and key information documents provided by the respective funds as of 1 January 2021. Said documents can be found at the links provided below:

Closing price data for the above funds and FTSE All-Share is taken from Google Finance, at the end of each trading day.