London Stock Exchange-listed energy storage investor Gresham House Energy Storage Fund expects to earn more than US$144 million (£108 million) revenues from contracts awarded in recent Capacity Market auctions in the UK.
The battery energy storage company was awarded 112.0MW of de-rated capacity in the T-1 auction for 325MW of projects, which is expected to add £8.4 million in revenues over one year between 2022 and 2023.
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It was also awarded 180.4MW of de-rated capacity in the T-4 auction for 463MW of projects, which is expected to add approximately £100 million over the 15-year period, assuming CPI at 2%.
“The Capacity Market is a vital tool for National Grid to ensure sufficient dispatchable generation to meet demand requirements as renewable generation expands, intermittency rises and as battery storage installations continue to lag renewable deployment,” Ben Guest, lead fund manager and managing director of Gresham House New Energy said.
Both the T-1 and T-4 auctions closed at record high prices due to capacity constraints. A total of around 1GW of battery storage assets were awarded contracts across the two.
The T-1 auction closed in the first round at £75/kW/y, with 4996.224MW of de-rated capacity across 226 pre-qualified Capacity Market Units (CMUs) securing contracts on 15 February.
The T-4 Capacity Market auction cleared in the ninth round at £30.59 /kW/year, with a total of 42,364MW of capacity securing contracts on 22 February.
Both were impacted by the closure of coal and nuclear power plants in the UK, straining the available capacity.
Additionally, the volatility in the energy market currently driven by high gas prices impacted the T-1 auction in particular.
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