Strong operational change by 2025: Portfolio revenue increased ~30% and EBITDA ~33% as capacity exceeded 1 GWwhile NAV per share increased a modest 3.7% but was overwhelmed by a £0.16 valuation cut and weaker assumptions on the forward curve at the end of the year.
Risk elimination and balance sheet progress: Contracted revenue increased from 25% to 39%, supporting an expanded, lower-cost, longer-term credit facility that unlocks capital for improvements; gross debt stands at £220 million (GBP 210 million withdrawn) with net debt to NAV of approx. 25%.
Growth Initiatives and Advantages: The three-year plan focuses on expansions and new construction to push the average duration towards approximately 1.9 to 2.0 hours (adding several hundred MWh) and “alternative revenue” tests aim to deliver up to £25 million of incremental EBITDA if scalable across the portfolio.
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Gresham House Energy Storage (LON:GRID) reported a strong improvement in operating performance in 2025 as the battery storage fund made progress in the first year of a three-year plan outlined at its November 2024 Capital Markets Day. Management highlighted higher revenue, capacity expansion, a refinancing that unlocked funds for upgrades and a continued drive to increase contracted revenue amid volatile market conditions.
Rupert Robinson, CEO of Gresham House, said 2025 was “a very productive year” as the company executed on multiple fronts. He noted a “strong turnaround” in financial performance and noted that GRID’s share price is up “just over 70%” during 2025.
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Robinson said portfolio revenue was up 30% and portfolio EBITDA was up 33% year-over-year. It also reported that net asset value per share increased by 3.7%, although it noted that this “allowed for even a £0.16 haircut in future curves”, a topic later addressed by the fund’s deputy manager, James Bustin.
Ben Guest, managing director of Gresham House’s energy transition business and lead fund manager at GRID, said 2025 marked “significant growth” for the company, with capacity increasing to “over 1GW”. It reported total portfolio revenue of £60m in 2025 and EBITDA of £38.8m, noting that EBITDA was achieved “despite taking certain assets offline”, which impacted margins.
Bustin emphasized that a key portfolio trend during 2025 was a move toward contracted income, aimed at improving risk-adjusted returns and supporting financing. It said contracted revenue increased from 25% in 2024 to 39% in 2025, and management expects that share to increase further as minimum contracts become more prominent and the pipeline is developed.
Bustin said the current mix of contracted revenue reflects “the tolls and the capacity market,” and that toll revenue will begin to decline as contracts expire. He added that as battery life increases, the revenue mix is expected to shift more towards commerce rather than frequency response, and the flexibility of the assets will allow optimization between different revenue streams.
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Guest said the fund concluded a refinancing and “laid the groundwork” for the three-year plan, with contracted proceeds helping to support an “extended debt facility” that unlocks capital for raises and capital for new projects. He described refinancing as achieving “a lower interest rate and a longer-term line of credit.”
In terms of leverage, Guest reported gross debt of £220m, with £210m drawn down, and net debt to net asset value of £159m, which it said was equivalent to 25% of net asset value (or around 20% of gross asset value).
However, Guest said NAV “fell slightly over the year,” with the decline coming in the fourth quarter due to “a significant further cut to revenue assumptions” from outside forecasters.
Bustin expanded on NAV drivers, describing a “reduction in revenue guidance” as a significant offset to operational and portfolio improvements. He presented a comparison of future 2024 year-end curves with 2025 year-end curves, stating that all curves “have fallen substantially.” He added that the combination of lower curves and a higher proportion of contracted revenue results in “a much more conservative revenue assumption”, which “significantly de-risks revenue assumptions in the business and therefore valuations”.
Bustin also said the fund maintained its discount rate approach, which he described as the “highest weighted average discount rate in this sector for a portfolio of this type.” He argued that valuations could have advantages over time because current valuations do not include the potential benefits of “alternative revenues,” new assets in the pipeline and potential for additional upside.
Management reiterated that the three-year plan focuses on (1) raises, (2) new construction projects, and (3) alternative income. Guest said the fund added 330 MWh of increases in 2024 and 2025 and expects to add another 350 MWh in 2026, bringing the portfolio toward “close to two hours of duration.” Guest said two surges have already been completed and six more are in progress, and the work is being staggered to avoid taking too many assets offline at once.
As for new projects, Guest said the industry has been slowed by NESO’s queue reform (“Gate 2”). He said the fund had received 594 of 694 MW of connection offers, with one project still pending, which it hopes will be a connection in 2027.
Guest said three projects have already been signed for the initial tranche (57 MW, 100 MW and 240 MW, for a total of 397 MW) and additional projects are expected to follow. He gave a broad view of financing expectations, including the fact that senior debt could account for around 70% of the total project cost, and said an export credit facility including junior and senior debt is “very close to completion”, along with an equity layer.
Alternative revenues were framed as an important potential driver of incremental profits. Guest said the fund conducted formal testing from December to March and generated “significant revenue per MW” during that period. It said the aim is to increase revenue per MW per hour by “between £5 and £10” and management is targeting £25m of incremental EBITDA from alternative revenues as part of the three-year plan. The trial was conducted with 4 MW, which Guest described as scalable, although he said implementation would be gradual.
In a question-and-answer session, Guest said a “reasonable rule of thumb” is that alternative revenues could eventually apply to “somewhere in the region of 50% of operating capacity,” although he characterized the effort as a work in progress.
When asked about the gap between the valuation model and the share price, Guest described NAV as the discounted cash flow from the asset base (with higher discount rates applied during construction) and acknowledged that the share price continues to trade at a discount. He said management views GRID as a growing company and believes testing the financing strategy, growth and alternative income initiative will be key to improving investor confidence.
As for battery life, Guest said the fund is upgrading shorter-duration assets, noting that the portfolio is expected to reach an average of 1.9 hours by the end of the current year. He cited Glastonbury as an example where older short-life batteries were replaced by a system of around 2.2 hours, with room for further increases in life.
Guest said the fund uses lithium-ion technology — “lithium ion phosphate, to be exact” — while acknowledging that some older assets use nickel, manganese and cobalt chemicals. He added that most of the portfolio has migrated to LFP due to cost, life and security characteristics.
Turning to government policy, Guest said the fund is benefiting from electrification trends and continued support for renewables through the CFD regime, citing strong AR7 results. He also referred to recent policy discussions, including the removal of a portion of the ROC’s subsidy impacts on electricity prices and the planned removal of carbon pricing support from 2028, as “very positive.” When asked about decoupling gas and electricity prices, Guest said there would be “none” or “almost no” impact on GRID trading because “there is no intention to change the wholesale market system” and gas would continue to set the price.
Management said a Capital Markets Day is scheduled for May 28 to be held as a webinar, where the company hopes to provide additional details on capital allocation and the next stages of its growth plans.
Gresham House Energy Storage Fund plc (GRID or the Fund) seeks to capitalize on growing intraday supply and demand imbalances caused by Britain’s increasing dependence on renewable energy. The Fund aims to provide investors with an attractive and sustainable dividend by investing in a portfolio of utility-scale battery energy storage systems (BESS) located in Great Britain, which primarily use batteries to import and export energy, accessing multiple sources of income available in the energy market. Gresham House Asset Management Limited (GHAM) is the investment manager of Gresham House Energy Storage Fund plc.
The article “Highlights from Gresham House Energy Storage Half-Year Earnings Calls” was originally published by MarketBeat.
