Crystal Ball Time: Communal or even Area Energy Storage?

Energy Storage

Last Post by Old_Scientist 2 months ago

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Toodles

(@toodles)

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Topic starter 09/07/2025 5:03 pm

With energy storage systems becoming more practical almost day to day now with battery formulations improving in energy density, higher capacity and lower costs as well as higher safety factors regarding risks of fires etc. I am wondering when we might start to hear about storage schemes? I hope to hear good news about my investment in Derril Water Solar Park soon and by next year, this should start to pay ‘dividends’ so to speak. I hope other similar schemes, along with further Wind Turbine generation will increase the amount of renewable energy to the extent that, with sufficient storage capacity, the UK could say ‘bye-bye’ tp the peaker plants that currently rule the roost at times of high demand.

The DNO’s may not under current legislation invest in such energy storage schemes I know but… does this rule out private initiative - or is it just not practical yet awhile? Community schemes - perhaps financed by such arrangements as are used to build wind turbines and solar parks might be considered. (I know that there has been at least one hiccup with a wind turbine project resulting in failure; in fact I had money invested in one such but claimed my payment back under a section 75 claim, though this should not be the end of such initiatives I hope!)

Building wind turbines is I’m given to understand, a project that requires some considerable time, financing and planning to bring to fruition. I’m also given to understand that setting up battery storage schemes take far less time - if this is so, are we yet at the point where such projects could be brought to fruition?

Quizzically, Toodles.

Toodles, he heats his home with cold draughts and cooks his food with magnets.

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Old_Scientist

(@old_scientist)

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09/07/2025 8:38 pm

I am invested in a couple of listed energy storage funds on the FTSE. These are Gresham House Energy Storage Fund (GRID) and Gore Street Energy Storage (GSF).

Both invest in commercial scale battery storage (commonly 1 and 2 hour duration) and seek to generate revenue which is returned to shareholders by way of dividend payments.

However, both have had a particularly torrid time over the last couple years, and revenues have fell off a cliff last year as National Grid changed some of the mechanisms which allowed them to sell energy.

The Wind and Solar markets are a lot more established and transparent. There are index-linked government subsidies (ROCs, CfD etc) which generate secure income and the energy produced can be sold either in advance through PPAs or on the spot market, so these funds have a very clear isea of their revenue streams, which makes them relative stable investments.

Battery storage funds do not have this, and when their revenue streams dried up last year, their share price plummeted. They are recovering, but it's been a slow painful process. GRID did recently announce a deal with Octopus to contract around half of it's storage capacity for the next few years which at least gives some visibility to earnings.

The main issue at the moment is going to be raising funds for such projects. A lot of these trusts are trading on discounts to their Net Asset Values, and whilst doing so they are unable to raise new capital for further investment. This also makes them vulnerable to takeover, and one of the listed energy storage funds (HEIT) was recently bought so now there are only two listed energy storage trusts available to invest in (note, when I say invest, you are simply buying someone else's shares so it's not new money being invested into the sector).

As with Solar and Wind farms, I understand that getting a grid connection for commercial scale battery storage is an equally difficult / lengthy process.

This post was modified 2 months ago by Old_Scientist

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