UK BESS owner Gresham House Energy Storage Fund (GRID) has entered into long-term floor agreements with Statkraft and Markel Bermuda, which will partially replace its toll with Octopus once that expires next year.
The deals cover 412MW of battery energy storage system (BESS) capacity with Statkraft Markets GmbH starting in 2025 and 2027, and 377MW of capacity with Markel Bermuda, part of insurance firm Markel Group, which kicks in once a debt refinancing is completed ‘shortly’, GRID said.
That totals 789MW, around 74% of GRID’s 1072MW BESS portfolio, some of which still needs to enter commercial operation during the period. The firm is one of the largest owners of BESS in the UK.
Floor agreements will replace Octopus toll
The agreements will fully kick in once GRID’s two-year 568MW tolling deal with Octopus Energy, which started in June 2024, ends, though will partially kick in before that.
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Once the toll expires, the floors will provide GRID with minimum annual contracted revenues of £35 million (US$47.61 million) while still allowing GRID to capture additional revenues above that level. The firm said this improves its risk-adjusted return characteristics.
Though not specified by GRID, revenues above the minimum floor are typically shared by owner and offtaker. That is different to a toll, where a fee is paid by the offtaker for some or all of a project’s capacity and financial performance, with no revenue or profit-sharing.
Those floor revenues do not include Capacity Market (CM) revenues for the projects, which will amount to £11 million in 2026, GRID added, meaning a total of £46 million in minimum revenues.
The toll with Octopus meanwhile provided £43 million in annual revenues across 568MW, including CM revenues, so the two deals are hard to compare.
Executives from both Octopus Energy and GRID discussed the toll deal with our sister site Energy-Storage.news at the time, in separate articles available for ESN Premium subscribers.
See the full version of this article, published earlier this week, on Solar Power Portal.
