12-year Fixed-Price Stackable Contract Secured

   18 October 2024

Gore Street Energy Storage Fund plc 

(the "Company" or "GSF") 

12-year Fixed-Price Stackable Contract Secured

Gore Street Energy Storage Fund plc, the internationally diversified energy storage fund, is pleased to announce that its California asset, "Big Rock," has secured a Resource Adequacy ("RA") contract with J. Aron & Company LLC, a subsidiary of Goldman Sachs. This fixed-price contract, worth over $14 million annually, marks a substantial achievement for the largest asset in the Company's portfolio. Scheduled to commence in the summer of 2025, this contract is fully stackable, allowing for concurrent revenue streams across wholesale trading and ancillary services.

The RA programme in California aims to ensure sufficient generation resources are available to meet the energy system's supply requirements. The RA programme requires load-serving entities to demonstrate they have secured enough generation capacity through RA contracts to cover their forecasted peak demand plus a reserve margin. This includes physical resources like energy storage to ensure flexibility and reliability in the power supply. The RA contract requires a minimum duration of 4 hours. Therefore, the Company's Big Rock asset will utilise 100 MW of RA deliverability.¹

The RA contract is similar to contracts in the Great Britain ("GB") Capacity Market in that it is a long-term contract which is fully stackable simultaneously with other revenue streams. However, the RA contract is worth a substantially larger portion of the total revenue in this market. It is expected to account for up to 40% of the total expected revenue of the asset over the contract life. Due to the long-term fixed-price nature of the contract, it also supports securing project-level debt.

This long-term fixed-price stackable contract will significantly enhance the Company's total revenue generation whilst further diversifying revenue streams and providing further stability. It also supports the Company's long-term ability to continue distributing dividends to shareholders.

The 200 MW Big Rock asset was acquired in February 2023 and is on track to be energised by December 2024.

Webinar

The Investment Manager will hold a webinar and Q&A session open to institutional investors and research analysts. The call will focus on the resource adequacy contract and its impact on the portfolio. The call will be held at 11:00am on Monday 21 October. Please contact Buchanan for details:  [email protected]

Factsheets

The Company produces a monthly factsheet, in addition to quarterly updates, to communicate developments from across its portfolio and markets in which it operates. The publications, including the quarterly factsheet, are available on the Company's website here.

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

"This RA contract marks the next exciting step for the Company as a new revenue stream is secured for the portfolio. Securing this contract is a significant milestone for the Company's cash flow. Based on contracts now in place, the Company's contracted cash flows will increase fourfold compared to FY24.

"The closest equivalent of long-term contracted revenue held within the portfolio would be from GB Capacity Market contracts, which offer a fraction of the contracted revenue secured for Big Rock in California. The RA agreement ensures the Company's largest asset to date will deliver long-term, stable value to investors, demonstrating the significance of our decision to enter the CAISO market.

"We are proud to have secured the RA contract from a high-level counterparty in Goldman Sachs as we look to continue to build on the Company's track record of success in a new market.

"California represents a particularly attractive location for investment as the state is rapidly decarbonising its energy supply to reach carbon neutrality by 2045. Renewable technologies, led by the state's c. 20 GW of installed grid-scale solar capacity, are already delivering high levels of power throughout the year and creating unique challenges in managing the grid. Energy storage is proving itself to be a crucial technology in facilitating California's energy transition, reducing curtailment of renewables and supporting system operations during periods of steep ramping. 

"We look forward to adding our expertise to the CAISO market with the Big Rock asset and further diversifying the Company's revenue and geographic exposure."

¹ The resource adequacy programme requires that assets have a minimum duration of four hours. The Big Rock asset has, therefore, secured a contract for 100 MW to fulfil the RA contract requirements.

For further information:  

Gore Street Capital Limited           

Alex O'Cinneide / Paula Travesso / Ben Paulden 

Email: [email protected]                                                                                     Tel: +44 (0) 20 3826 0290  

Shore Capital (Joint Corporate Broker)    

Anita Ghanekar / Sophie Collins (Corporate Advisory)                                     Tel: +44 (0) 20 7408 4090  

Fiona Conroy (Corporate Broking)              

J.P. Morgan Cazenove (Joint Corporate Broker)                                                               

William Simmonds / Jérémie Birnbaum (Corporate Finance)                        Tel: +44 (0) 20 3493 8000  

Burson Buchanan (Media Enquiries)        

Charles Ryland / Henry Wilson / George Beale                                                    Tel: +44 (0) 20 7466 5000  

Email: [email protected]  

Notes to Editors  

About Gore Street Energy Storage Fund plc  

Gore Street is London's first listed and internationally diversified energy storage fund dedicated to the low-carbon transition. It seeks to provide Shareholders with sustainable returns from their investment in a diversified portfolio of utility-scale energy storage projects. In addition to growth through increasing operational capacity and a considerable pipeline, the Company aims to deliver consistent and robust dividend yield as income distributions to its Shareholders.  

https://www.gsenergystoragefund.com