Gresham House inks two long-term floor agreements

(Sharecast News) - Battery energy storage systems investor Gresham House Energy Storage said on Thursday that it has inked long-term floor-pricing agreements with two counterparties.

Gresham House said the first agreement was with Statkraft Markets, part of renewable energy business Statkraft Group, while the second was with Markel Bermuda, owned by US insurance firm Markel Group.

The FTSE 250-listed firm said both floor agreements, which supplement its existing two-year tolling agreements with Octopus Energy over 568mw of capacity, will "significantly increase" long-term contracted revenues over the next ten years.

Once all the floor Agreements are in force and the tolling agreements have expired, Gresham House said 74% of its 1072mw portfolio will secure minimum annual contracted revenues of �35.0m, while still providing exposure to the upside merchant trading opportunity above the contracted floors.

Gresham House added that its portfolio's capacity market contracted revenues were not included in the aforementioned figures and were expected to provide it with an additional �11.0m of contracted revenues in 2026.

Chairman John Leggate said: "Being able to demonstrate to lenders that GRID has de-risked revenue streams is key to unlocking more favourable and longer-term financing terms with less onerous covenants. Along with a third agreement, which we expect to conclude soon with a separate counterparty, this revenue floor model will deliver contracted minimum revenues on the majority of our assets, meeting our needs to cover debt servicing obligations whilst retaining opportunities to access upside revenues."

As of 0915 BST, Gresham House shares were up 3.88% at 81.23p.

Reporting by Iain Gilbert at Sharecast.com