The Energy Storage Report 2024

Now available to download, covering deployments, technology, policy and finance in the energy storage market

UK revenues ‘markedly lower’ in 2023: Harmony Energy echoes Gresham House update

LinkedIn
Twitter
Reddit
Facebook
Email

UK energy storage fund manager Harmony Energy has said revenues in 2023 were significantly lower than 2022, postponing its dividend, after peer Gresham House said the same thing earlier in the week.

Its fund Harmony Energy Income Trust (HEIT) signalled that battery energy storage system (BESS) revenues for the year ended 31 October 2023 were markedly lower than the same period in 2022.

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Revealed in the firm’s recent trading update, the discussion around a “weak revenue environment for BESS assets” echoes the thoughts of Gresham House Energy Storage Fund, another major UK-based storage investor, who said earlier this week that this was due to assets not being able to participate in balancing the GB grid or replacing gas-fired generation to their fullest capability.

Although HEIT did not reveal the financial impact the weaker environment has had on its BESS assets fully, its quarterly net asset value update and audited annual results are earmarked for later this month and should provide further clarity.

Multiple factors contribute to a reduction in revenue which ‘exceeded market expectations’

EIT revealed multiple drivers that contributed to a reduction in revenue that “exceeded market expectations”, specifically in a macro and sector-specific sense.

The first major influence is the saturation of ancillary service markets. Due to the high rate in the buildout of BESS projects in GB this has led to the saturation of ancillary services and thus driven record low clearing prices.

Interestingly, this was “widely anticipated” and the firm’s two-hour duration BESS portfolio is positioned to protect against the event and the wider balancing mechanism (BM). However, Energy-Storage.news previously reported that the impact had been “far sharper than projected” and thus rocked numerous BESS portfolios including Gresham House.

See the full version of this article on our sister site Solar Power Portal.

Read Next

March 1, 2024
London Stock Exchange-listed battery storage investment firm Harmony Energy Income Trust (HEIT) has predicted that it can generate “attractive returns” despite the ongoing woes in battery energy storage revenues in the GB market.
Premium
February 29, 2024
We hear from industry sources about why we’ve seen a flurry of investors acquiring energy storage developer-operators in the UK and Germany, Europe’s two largest markets by BESS deployments.
February 29, 2024
UK firm G2 Energy is moving into full BESS wrapped EPC services under its new owner Mitie, having focused on a grid connections and balance-of-plant (BOP) engineering services prior to its predecessor company’s bankruptcy last year, CEO Kelvin Ruck said.
February 29, 2024
The UK electricity system operator’s T-4 Capacity Market Auction (CMA) for delivery year 2027/28 cleared earlier this week (27 February) after two rounds at an “all-time high” clearing price of £65 (US$82.23)/kW/year.
February 28, 2024
Masdar Arlington Energy, Renewable Power Capital and TagEnergy have broken ground on, acquired and financed projects UK battery energy storage system (BESS) projects totalling 162MW of power.

Most Popular

Email Newsletter