## Gresham House Energy Storage Fund plc (GRID) ## Annual Report and Financial Statements for the year ended 31 December 2024 ## Contents | Strategic Report | Portfolio Governance Accounts | | | --- | --- | --- | | Overview | | Independent auditor’s report 87 | | Highlights 4 | | Statement of | Comprehensive Income 95 Fund summary 8 Investment Portfolio Statement of Financial Position 96 Chair’s statement 9 see page 18 Statement of Changes in Equity 97 Board of Directors Statement of Cash Flows 99 Market and nancial review see page 60 Notes to the Financial Statements 100 Market overview 2024 27 Alternative Performance The Manager’s team 62 Financial review 31 Measures 121 Corporate governance report 65 Sustainability Other information Nomination Committee report 70 | | Audit Committee report 71 | Company information 126 | | --- | --- | --- | | | Management Engagement | Glossary 127 | | Investment | Committee report 74 | | Sustainable Finance Disclosure | Manager’s review | Sustainability report | | | | --- | --- | --- | --- | | | | Remuneration Committee report 75 | Regulation (SFDR) 130 | | see page 12 | see page 39 | | | Directors’ remuneration report 76 Additional statutory and corporate Three-year Plan 15 Task Force on Climate-related governance information 81 FinancialDisclosures (TCFD) 41 Risk and S.172reporting Principal risks and uncertainties 51 S.172 reporting 56 Gresham House GRID Annual Report 2024 2 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Strategic Report ## Overview Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Highlights 2 ### NAV per share Operational portfolio size Progress with completion ### of 1,072MW portfolio ## 109.35p 945MW ## +88% ## -15.3% +37.0% Dec 23 64% 1 | Dec 23 | 129.07p | Dec 22 | | 550MW / 598MWh | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | Dec 24 | 79% | | Dec 24 | | Avg. 22 | 441MW / 490MWh | | | | 109.35p | | | | | | Apr 25 | 88% | | --- | --- | --- | --- | --- | --- | --- | | | Dec 23 | | 690MW / 788MWh | | | | | | Avg. 23 | 607MW / 672MWh | | | | | | Revenues of underlying | Dec 24 | | | 845MW / 1,207MWh | | | 1 ### investment portfolio Avg. 24 778MW / 988MWh Apr 25 945MW / 1,447MWh ## £46.5mn ## +20.1% ### NAV Dec 23 £38.7mn Dec 24 £46.5mn ## £622.2mn ## -15.9% Dec 23 £740.1m n Dec 24 £622.2mn 1. Unaudited. Refers to revenues generated by the | assets in the portfolio. Alternative Performance | 2. Unaudited. Operational MW and MWh | | --- | --- | |  | here are the monthly-weighted average | | pages 121 to 124 | capacities over the year | Gresham House GRID Annual Report 2024 4 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review Highlights ### Underlying investment portfolio EBITDA of underlying 3 ### revenues per operational investment portfolio 3 ### MW and MWh ## £29.1mn ## 59,800 / 47,100 £ per MW per annum / £ per MWh per annum ## +12.7% | Dec 23 | | 63,800 / 57,600 | 2023 | £25.8mn | | | --- | --- | --- | --- | --- | --- | | Dec 24 | 59,800 / 47,100 | | | | | | | | | 2024 | | £29.1mn | ### Portfolio combined balance Assets under tolling arrangement 4 ### sheet metrics MW under tolling arrangements, ### out of the total 568MW contracted Debt ### under the two-year tolling Dec 23 £110 mn ### arrangement with Octopus Energy Dec 24 £150mn ## 360MW Cash | Dec 23 | | £43.7mn | Dec 23 | 0MW | | | | --- | --- | --- | --- | --- | --- | --- | | Dec 24 | £39.5mn | | Dec 24 | | 310MW | | | | | | Apr 25 | | | 360MW | Net debt Dec 23 £66.3mn Dec 24 £110.5 mn Net debt to NAV 2023 9% 2024 18% 4. Sum of debt and cash at the Company and  its investments excluding shareholder loans, and calculated on pages 121 to 124 unaudited. Debt excludes shareholder loans Gresham House GRID Annual Report 2024 5 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review Highlights  Energy storage capacity in  BESS utilisation in NESO’s Balancing  Tolling arrangement with Octopus ### Operational highlights 6 megawatt-hours (MWh) Mechanism (BM) in H1 2024: In Q1 Energy: The Company chose to reduce ### (as of 31 December 2024) 2024, the BESS sector saw very low down-side merchant exposure due to MWh increased 53% to 1,207MWh 8 | |  | utilisation of roughly 6.7% | | in the | the low revenue environment caused | | --- | --- | --- | --- | --- | --- | |  Net Asset Value (NAV) | | | 9 | | | | | 226MWh via new projects and 193MWh | BM operated by NESO’s | control | | by high skip rates in NESO’s BM, leading | NAV declined 15.9% to £622.2mn  room. This trough contributed to to our landmark tolling arrangement compared with a year ago (31 December existing projects. unexpectedly low revenues. with Octopus Energy which closed in  June 2024 and contracted 568MW of  BESS utilisation in NESO’s BM in H2 | |  Operational portfolio average battery | | capacity for two years. 310MW had | | --- | --- | --- | --- | | NAV per share declined 15.3% to | | 2024: The improvement in revenues | | | | duration (the ratio of portfolio MWh | | started their tolling agreements as of | | 109.35p compared with a year ago | |  | | | | to portfolio MW) | |  | |  | | higher utilisation in the BM as well as | | Duration rose 25.1% to 1.43h from 1.14h. increased electricity demand, higher  Asset disposals: The Manager has The decline was primarily driven renewable penetration, less baseload engaged with a number of counterparties 7  Underlying portfolio revenues by lower third-party forecast supply (decommissioning of last coal to progress a transaction to validate NAV  revenue curves. plant) and NESO’s launch of other and to improve liquidity. This activity is £38.7mn), despite being down at the | | | BESS-centric services such as Quick | ongoing; a deal with initial terms agreed is | | --- | --- | --- | --- | | NAV per share declined a little less than | half-year stage, as second half revenues | | | | | | Reserve in December. | in the late stages of due diligence. | | NAV due to share buybacks in H1 2024. | rose 58.1% year over year to £28.6mn | | | | | |  Borrowings: As of 31 December 2024, |  Manager’s fee: Renegotiation of | | The Financial review section provides |  | | | | | | total portfolio external borrowings were | fees began in 2024 and concluded | | a full analysis. | the decline in H1. | | | | | | £150mn and cash in the Company | in Q1 2025, changing the basis of | 7  Underlying portfolio EBITDA 10  Grid connection capacity in and the portfolio stood at £39.5mn , the fee calculation to an average of increased 12.4% to £29.1mn, 5 leaving overall net debt of £110.5mn NAV and Market Cap, from NAV and megawatts (MW)  11  reducing fees by 28% . MW rose 22% to 845MW year over EBITDA margin of 62%. debt to GAV was 14% and net debt to |  | | |  Capital Markets Day and Three-year | | --- | --- | --- | --- | | |  Buybacks: 4,380,555 shares | NAV was 18%, also remaining below | | | with the following projects energising | | | Plan announcement: In November, | | | repurchased (0.8% of shares | the investment policy restriction to | | |  | | | we hosted a Capital Markets Day and | | | outstanding) at an average | keep total external debt below 50% | | announced a Three-year Plan which – York (50MW) in January price of 45.6p. of NAV. Our total available facilities targets a £150mn annual EBITDA were £195mn, down from £335mn as – Penwortham (50MW) in May run-rate by the end of 2027. It involves of 31 December 2023, following the adding 1,500MWh of battery capacity – Nevendon extension (5MW) in October cancellation of £140mn of the facilities  – Elland (50MW) in November during the year. projects totalling 694MW in grid capacity, and the sourcing of additional alternative revenues. Progress is reported on in the Three-year Plan section. 8. Balancing Mechanism: How to calculate in-merit dispatch rates for BESS – | | 6. Megawatt-hours (MWh) are a measure of energy | Research \| Modo Energy | | | --- | --- | --- | --- | | | and in this context are a measure of the energy | 9. NESO is the National Electricity System | | | | that can be stored in the Company’s portfolio of | Operator, responsible for ensuring the supply | | | | battery energy storage systems (BESS) | of electricity in Great Britain matches demand. | | | | 7. Alternative Performance Measures, including | It was previously National Grid ESO but is now |  | | 5. Megawatts (MW) are a measure of the rate of |  | government owned | 2025 of 41.05p and current NAV per | |  | calculated on pages 121 to 124 | 10. Unaudited | share of 109.35p | Gresham House GRID Annual Report 2024 6 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review Highlights  Falling battery prices further improve ### Market highlights cost eectiveness and capital  Progress on skip rates in NESO’s BM. eciency: Battery pack prices fell 17 | In a breakthrough for the BESS sector, | c.20% in 2024 according to BNEF | with | | --- | --- | --- | | NESO released a statement in October | innovation expected to drive further | | | committing to improve BESS utilisation | falls. Coupled with the CP30 Action Plan, | | 12 | in the BM | . It also admitted, via a report | | | this most likely cements batteries as | | --- | --- | --- | --- | --- | | | | 13 | 14 | | | it commissioned | | , that BM skip rates | |  | | are far too high. | | | | technology for both short and long- |   Change of government in 2024 | is positive for BESS: The current |  Batteries are the optimal technology | | --- | --- | | Labour government is committed to | for Long-Duration Energy Storage | | decarbonising the UK’s electricity | (LDES) in GB: LDES provides energy | | by 2030. It coined the term Clean |  | | Power 2030 or CP30 and released a | electricity generation for longer periods, | 15 | CP30 Action Plan | report detailing its | with the government targeting 4GW to | | --- | --- | --- | | ambitions. A key change to prior policy | | 6GW of LDES by 2030. The Manager | |  | | and other GB battery project owners | | renewable generation deployment | | commissioned LCP Delta to report on | | was already on track to meet CP30, | | the suitability of BESS for LDES. LCP | 18 |  | Delta published its report | in April 2025, | | --- | --- | --- | | intermittency associated with renewable | highlighting BESS of durations up to | | | generation was not. The focus on 2030 |  | | 16 means less mature technologies are solution when compared with alternative no longer the priority and a political technologies such as pumped storage, realism about the commercial viability Liquid Air Energy Storage (LAES) or of alternatives to BESS in the near Compressed Air Energy Storage (CAES). term underscores Li-Ion BESS as the  GRID is the largest owner and preferred technology solution. operator of BESS in GB, with the operational portfolio representing 12. neso.energy/news/our-commitment-improve- 17% of the market by MW. The battery-dispatch-rates-balancing-mechanism next largest owner holds 8% of BM Skip 19 operational projects . Rates Phase 2 Report 14. The skip rate is known as 1 - utilisation rate | gov.uk/ | about.bnef.com/ | | --- | --- | | government/publications/clean-power- | blog/lithium-ion-battery-pack-prices-see- | | 2030-action-plan | largest-drop-since-2017-falling-to-115-per- | kilowatt-hour-bloombergnef/ 16. Alternatives included unproven, expensive and/or slow-to-build technologies that could at best emerge 18. LCP Delta report on BESS suitability for LDES | in the later 2030s, including nuclear small modular | https://greshamhouse.com/ | | --- | --- | |  | wp-content/uploads/2025/04/Value-of-long- | | with carbon capture utilisation and storage, and | duration-BESS.pdf | | even other forms of storage such as compressed or | 19. As of the end of Q4 2024 according to | |  |  | Gresham House GRID Annual Report 2024 7 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review ## Fund summary ### Investment objective Summary of portfolio ### Our Investment objectives aim today  Our Investment Portfolio and Pipeline  Income from an attractive and sustainable consists of 35 BESS projects across GB, dividend over the long term, from projects of which 27 are operational today. The located in Great Britain, and overseas. portfolio’s current operational capacity is |  Capital growth through the re-investment | 945MW / 1,447MWh and is set to reach | | --- | --- | | of net cash generated in excess of | 1,072MW / 1,701MWh after the release | | dividends paid. |  | of West Bradford (87MW / 174MWh) and Shilton Lane (40MW / 80MWh) expected in Q2 2025. ### Investment Manager As part of the Three-year Plan we are ### (the “Manager”) planning to drive further capacity growth with duration extensions on existing Gresham House Asset Management assets alongside the build-out of new Limited (GHAM) is the Manager and is pipeline assets through 2025-2027. The wholly owned by Gresham House Limited further construction plans are subject (formerly Gresham House plc), a specialist to the completion of the ongoing debt alternative asset manager focused on Investment sustainability (GHAM website). Portfolio for full details on the Investment Portfolio and Pipeline. The Company’s assets are consistently amongst the top-performing BESS. The Manager has achieved this by working  all emerging revenue opportunities to drive wider earnings opportunities for the Company’s assets. In addition to running our business, the Manager engages with regulators, leading sector participants and the media to promote the sector and its vital importance for energy security, resilience and net zero targets. Gresham House GRID Annual Report 2024 8 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review ## Chair’s statement On behalf of the Board, I am We have articulated an income and The tolling arrangement with Octopus In parallel, we are encouraged that the growth strategy since the Company’s Energy announced during the year subject of skip rates is now recognised ### pleased to present the Annual IPO which we delivered on through 2023. provides greater earnings diversity, as a problem at the highest levels of ### Report and Accounts of Gresham | |  | away from NESO, and downside | government and that NESO has publicly | | --- | --- | --- | --- | | House Energy Storage Fund | of 2024 meant that the Board had to | protection should a low revenue period | admitted skip rates have been too high, | | | suspend its dividend policy to navigate a | return in future. | committed to improving its performance | ### plc (“GRID”, the “Fund” or the low revenue environment. and proactively engaged with BESS ### “Company”) for the year ended We have spoken on several occasions sector leaders. This allowed us to preserve capital to about the regulatory risk that has ### 31 December 2024. manage our debt obligations, complete manifested, which relates to the national Our work is not done, however. The pace construction on projects in progress and control room owned and operated by of change in the grid control room and complete the upgrade of some existing NESO, whose task is to balance supply and underpinning systems remains very slow sites to accelerate near-term revenues. demand in real time via the BM. and the Board and Manager will continue ### A challenging year to highlight the skip rate issue until it is fully While we have consistently achieved NESO did not, and seemingly could not, ### with an improving resolved. Nonetheless, it is encouraging strong growth in operational capacity, utilise batteries properly due to a lack to see a positive trend during 2024 and ### strategic context revenues per unit of installed capacity of appropriate systems and technical evidence of real progress. have been much more volatile than infrastructure, leading to the very low This was a particularly challenging year anticipated. In the last four years, we have utilisation (or “skipping”) of batteries. The for the Company, shareholders and the achieved compound operational capacity Board and the Manager have had to work wider GB BESS sector. The continued growth of 39% p.a., rising from an average very hard to get this issue noticed and share price discount to NAV has been of 207MW in 2020 to 778MW in 2024. We addressed, working with peers and trade  expect further growth of 25-30% in 2025, associations, NESO, government policy are thankful for the continued support as capacity heads above 1,000MW. makers, Ofgem and the media, as this of and belief in the long-term strategy. issue was not well understood beyond the Despite the challenges in the year, we In contrast, revenues per MW (or per BESS industry.   the second quarter and closed the year with highs and lows in 2024 of £91k/MW/yr It is therefore encouraging to revisit things at a high, posting over 50% growth in (December) and £34k/MW/yr (February) now, at the start of 2025, in the context operational battery capacity (MWh) in respectively in terms of revenues per of an improving revenue backdrop and 2024 and enjoying revenues in December MW expressed on an annualised basis. greater government and regulatory which, if annualised, would set a record In reality, our revenues were impacted support for our sector. Labour’s current for the portfolio. | by counterparty concentration risks | focus on Clean Power by 2030 (CP30) | | --- | --- | |  | has woken everyone up to the fact that | | NESO, failing to move quickly enough | batteries are the only near-term available | | with the modernisation programme of its | and economically viable form of storage | | control room to be able to properly utilise |  | | batteries in its BM. | to balance renewable supply with demand. | Gresham House GRID Annual Report 2024 9 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review Chair’s statement As we announced with our interim results, The Company’s repositioning is being At our Capital Markets Day on 27 ### Lower forecast | | we now share additional valuation metrics | | achieved by securing long-term | November 2024, the Manager presented | | --- | --- | --- | --- | --- | | revenue curves impacted | | 20 | | | | | such as enterprise value | (EV) to sales, EV | contracted revenues with investment | our plans for the three years from 2025 to | | | to EBITDA and EV to MW, alongside NAV | |  | 2027. The plan has three elements. Two | ### asset valuations and NAV per share, to help investors value portion of the Company’s operational  our shares in more traditional ways. These   The Company’s NAV and NAV per share metrics are presented in the Financial if, as it did earlier in the year, the trading augmentations and new pipeline. These fell to £622.2mn and 109.35p per share review section. backdrop weakens. The contracts represent the majority of the targeted respectively, from £740.1mn and 129.07p at  increase in EBITDA from c.£50mn in 2025 the end of 2023. The Board is encouraged that the revenue base whilst still ensuring some to the £150mn run-rate target announced transaction announced on 25 March The movement in the valuation was driven merchant upside. for the end of 2027, without the need for 2025 under which Drax Power plc by a downward revision to forecast revenue  intend to purchase HEIT for £199.9mn, curves provided by the independent opportunities which the Manager has  consultants. This impact was increased by  ### Foresight Group LLP, demonstrates the Improving portfolio the replacement of one of the forecasters and EBITDA. Full details of the key elements underlying value of BESS. Factoring their used at the start of 2024 with a consultant of the plan are provided in the Three-year ### performance through higher proportion of debt and slightly with a more conservative set of forecasts Plan section on pages 15 to 16. ###  the year at the half-year stage. | | this transaction strongly supports the | | To make the Three-year Plan possible, | | --- | --- | --- | --- | | The resulting reduction in NAV therefore | valuations in the Company’s accounts for | Our portfolio of assets generated net | we are in the process of sourcing debt | |  | 31 December 2024. | revenue of £46.5mn and £29.1mn of |  | | revenue assumptions, including a shaving | | EBITDA in 2024. Throughout 2024, each |  | |  | | quarter outperformed those preceding it, | existing debt and provide additional capital | |  | | culminating in December 2024 being the | for augmentations and the new pipeline. | | | Increased contracted | best month in two years for the whole sector. | | | that have become apparent in the BM, | | | Allocation of incremental capital to extend | | and their expected resolution over time. | | The revenue mix has increasingly shifted | the duration of our existing portfolio is | ### revenues will Valuations are discussed in more detail in to trading, as the long-expected saturation highly accretive to both earnings and ### the Investment Manager’s report. fundamentally of the Frequency Response market began NAV per share. at the end of 2022. While revenues were ### reposition the business Existing discount rates for merchant under pressure for large parts of the year, the As mentioned above, long-term revenue revenues and Capacity Market revenues portfolio has meaningfully and consistently contracts are integral to unlocking Our focus on increasing contracted were unchanged in 2024 and a discount outperformed the rest of the market, as  revenues will allow us to fundamentally rate of 8.5% was applied to the newly discussed in the Financial review section. new investment. This debt is expected reposition the business, supporting introduced tolling revenues. This has had to be at lower margins than existing debt   which, combined with substantially lower sustainable dividends which remains a average discount rate, reducing it to 10.73% battery prices, makes our new investments  ### from 10.87% as of 31 December 2023. A Three-year Plan to drive highly accretive to shareholder returns. debt facilities during Q2 2025 will be the ### catalyst for this. signicant accretive value  mentioned above will, once concluded, unlock our Three-year Plan. 20. Enterprise value is the sum of the market capitalisation and total net debt Gresham House GRID Annual Report 2024 10 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review Chair’s statement ### Capital allocation Delivering our plan has ### post-renancing positive implications ###  for shareholders  In the last year, investors across the BESS operations for distributions. and renewables sectors have been through  a torrid time. We have taken steps to address expect to have meaningful and growing our downside revenue vulnerabilities while   dividends and/or share buybacks as the than currently contracted to be able to Three-year Plan unfolds. The Board looks continue to grow. This should unlock growth forward to announcing the details once the in distributable income and in our NAV. The  Board and Manager are wholly focused on delivering the Three-year Plan, with very positive implications for shareholders. ### Increasing the We look forward to reporting progress on the Three-year Plan and on further ### Manager’s alignment improvements in battery utilisation in the BM as promised by NESO. ### with shareholders The Board, the Manager and policy To improve alignment between the makers are clear that the BESS agenda Manager, the Company and investors, is key to the UK’s critical national the Board initiated a full review of the infrastructure and is becoming an Manager’s fee, being cognisant of the accepted cornerstone of the UK energy need to protect short, medium and transition ecosystem, and GRID retains long-term value for investors. Those its position as leader in the BESS sector. discussions were concluded in early Q1 2025 and will realise savings of 28% p.a. 21 from the management fee. ### John Leggate CBE, FREng Chair 22 April 2025 21. Assumes the closing share price of 41.05p on 31 January 2025 and the current NAV per share of 109.35p Gresham House GRID Annual Report 2024 11 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review ## Investment Manager’s review 2024 was a year of signicant The start of the year presented a To address the revenue challenges In the Company’s interim results challenging revenue backdrop, with BESS faced at the start of the year, we agreed announcement on 30 September 2024, ### activity, as we continued to grow | |  | | a landmark tolling arrangement with | we indicated that annualised operational | | --- | --- | --- | --- | --- | | capacity and worked to set the | | 22 | | | | | BM, which is operated by NESO’s | control | Octopus Energy, which was signed in June | portfolio EBITDA could reach c.£45mn, | | Company up for success as the | room. The 2023 Annual Report (published | | 2024 and priced above prevailing market | once all projects under construction | 24 in April 2024) outlined the Company’s levels. The tolling arrangement was the had been commissioned . We based ### market recovered following an strategic plan, which highlighted our focus  this calculation on merchant revenues ### especially weak rst quarter. | |  | with more visibility, while diversifying | of £45,000 per MW per annum from | | --- | --- | --- | --- | | | out more duration extensions instead | the Company’s revenues away from | uncontracted assets (i.e. those not under | | We added 155MW and 419MWh of | of only new project connections, as this | sole reliance on the national wholesale | tolling agreements). The better trading | | connection and battery capacity | minimised capital requirements and | market and the BM. | conditions in fact resulted in annualised | | respectively during the year, through a | mitigated delays, at a time that new project | | operational portfolio revenues per | The tolling agreement with Octopus combination of new project connections connections were proving challenging due MW exceeding £66,000 per MW in the contracted 568MW / 920MWh of our and battery duration extensions and to construction programme extensions second half of 2024. capacity, representing a little over half of took operational battery capacity to over often caused by network operators. the Company’s portfolio, to maintain a While rising installed capacity supported  In parallel, we amended the Company’s balance between contracted and merchant growth, improved operational portfolio Further project completions have followed debt facilities in April 2024 to provide revenues and allow us to also participate in a revenues and EBITDA have also been since the year end. The Company now greater protection against any further market recovery. We were therefore pleased driven by a recovery in the wholesale  worsening of the revenue backdrop which, to see improvements in merchant revenues market backdrop and better dispatching 1,447MWh today, representing 84% in the outturn, troughed in Q1 2024. The as the year progressed. Improving merchant of batteries in the BM, with December growth in operational battery capacity  revenues could also underpin better terms being the strongest month of 2024. This (expressed in MWh) since the end of 2023. decision to suspend dividends. The in any further tolling arrangements, so this improved trading has continued so far Further details on the portfolio, including combination of these actions has enabled recovery is also encouraging for future into 2025. If this is sustained, GRID is likely case studies, can be found in other us to progress the completion of the contracting opportunities. to be well placed to exceed the £45mn sections of this report. current construction programme at lower EBITDA referred to above. Revenues for the year from the underlying leverage levels. portfolio were £46.5mn, driving year-on- year underlying portfolio EBITDA growth of 23  , with  by growth in second-half revenues. This growth was also supported by the increase in operational capacity mentioned above. 24. As referenced most recently in the  will be two-thirds contracted once all tolling | 22. NESO is the National Energy System | 23. Alternative Performance Measures, including | agreements are in place and assuming | | --- | --- | --- | | Operator (ex. National Grid ESO prior to being |  | a merchant revenue rate on 504MW of | | nationalised during 2024) | calculated on page 121 to 124 | uncontracted assets of £45k/MW/yr | Gresham House GRID Annual Report 2024 12 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review Investment Manager’s review | | The team continues to make progress on | | Electricity prices can turn negative during | | | --- | --- | --- | --- | --- | | Three-year Plan to drive | | Outlook: the investment | | | | | the next phase of the pipeline. Subject to | | periods of excess renewables generation, | | | shareholder returns |  | case remains strong and | as curtailment of generation is needed | | | | are expecting to begin works on further | | to reduce supply to the level of demand | | | through portfolio growth | | market fundamentals | | | | | duration extensions on existing assets and | |  | | | and economies of scale | to build out new two-hour projects, the full | arepromising | prevalence of negative prices increased | | | | details of which will be provided at the time | |  | | | At the Capital Markets Day on | | The investment case for BESS remains | | 25 | | |  | | prices | turning negative for 176 hours | |  | | strong, with rapidly rising renewable | | | and intraday system prices being negative Company’s new Three-year Plan, and energy penetration continuing. As for 536 hours, representing a 25% year- this is described in depth in the Three- renewable electricity generation tends  ### year Plan section. The work done during Progressing a transaction to range from 0% to 200% (i.e. twice the negative system prices). the year has put the Company on a level) of demand, this is causing increasing ### to underpin NAV surer footing going into 2025, so we can challenges for NESO’s control room to This BESS opportunity will only increase capture the opportunity as the market balance supply and demand via its BM with greater renewable penetration. Indeed, In the course of 2024, we engaged with a improves. This new plan sets out our aims framework, which BESS are very well the consultancy Modo Energy is forecasting number of counterparties to progress a 26 for the next three years and how we aim placed to address and earn from. up to 1,000 hours a year in 2027 . transaction to validate NAV and improve to achieve them. liquidity, including project-level equity The volume of storage needed on injection at NAV or a disposal at NAV. So far in 2025, our team has focused on the system just to catch up with the  securing additional contracted revenues increase in renewable generation is during the Capital Markets Day to support leverage while working to  presentation relating to the raising of  new equity into the Glassenbury project debt facilities. Both elements have company to augment the project’s duration, progressed well and we expect to make at the valuation at which this project is held an announcement shortly about this in the books, continues to progress and, if cornerstone of the Three-year Plan. successful, should underpin the valuation that the projects are held at. We note that 25. https://modoenergy.com/research/gb- recent industry transactions, such as the battery-energy-storage-markets-2024-year- in-review-great-britain-wholesale-balancing-  mechanism-frequency-response-reserve HEIT, provide further third-party support 26. Negative Prices – why do they happen for the value of BESS and our current and why will they continue to grow investment valuations. Research | Modo Energy Gresham House GRID Annual Report 2024 13 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review Investment Manager’s review | It is very encouraging to see the Department | In the Manager’s view, this has pushed up | | From a regulatory perspective, reducing | This is highlighted in a recent report | | --- | --- | --- | --- | --- | | for Energy Security and Net Zero (DESNZ), | costs to consumers, as this country has | | the under-utilisation of batteries in the BM | published by LCP Delta, a leading | | under a Labour government, calling for |  | | operated by NESO remains a top priority | technical consultancy. BESS, up to | | 22GW of BESS by 2030, compared with | stations to back up renewable generation. | | and must also be for DESNZ if the £10bn | at least a 12-hour duration, have the | | 5GW today, as it focuses on the execution | Thus, the CP30 plan will allow Great | | in savings mentioned above are to be | lowest upfront capital and running | | of Labour’s Clean Power 2030 (CP30) | Britain to shift away from, and allow the | | realised. In this context, our dialogue with | costs, lowest environmental impact, are | | Action Plan. CP30 has fundamentally shifted | decommissioning of, a substantial portion | | NESO has improved. NESO’s leadership | most technologically mature and are | | attitudes in favour of batteries, putting them |  | | team now holds a quarterly roundtable with | deliverable by 2030. This presents new | | centre stage. The previous administration’s |  | | BESS industry leaders and is committed to |  | | focus on 2050 put too much store in as-yet | that a zero carbon system would achieve | | improving utilisation of BESS. | and our pipeline. | | unproven technologies (such as hydrogen) | £10bn in savings to consumers in real | | | | | | | 27 | Under the CP30 Action Plan, DESNZ is | Our immediate focus is on delivering | | to address renewable intermittency, and | 2012 terms | , which is only achievable | | | | | | | also targeting the installation of between |  | | overlooked the immediate potential of BESS. |  | | | | | | | | 4GW and 6GW of Long Duration Energy | that unlocks the capital expected to | the entire electricity market today is worth Storage (LDES) to address longer lulls in conclude in Q2 2025. c.£75bn (wholesale and non-commodity   We are excited by the Company’s next the ability to discharge for at least eight is set to be unlocked. phase of growth which we expect to be hours. While several technologies compete  in this area, Li-Ion BESS represents the most NAV per share and the move to a more  27. assets.publishing.service.gov.uk/ longer-term contracted revenue base. requirements of twelve hours in duration media/60f575cd8fa8f50c7f08aecd/smart- and potentially longer. systems-and-exibility-plan-2021.pdf Gresham House GRID Annual Report 2024 14 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review ## Three-year Plan ### At the Capital Markets Day ## 1 2 3 ### (CMD) on 27 November 2024, the ### Manager unveiled a Three-year ### Teeing up the Unlocking contracted Renancing ### Plan to the market, outlining our ### aims for continued growth in Three-year Plan revenues to underpin and new nancing ### our GB portfolio and improving ### Prior to the start of the three elements current and future Since November 2024, the Manager has ### returns for shareholders through of Three-year Plan, the Manager will been working with an expert independent ### debt arrangements complete the current construction  ### three key prongs, with each programme, which will take operational The tolling arrangements secured with facilities and adding incremental debt. ### contributing to the growth in grid capacity to 1,072MW and installed  We expect to conclude the process in ### EBITDA up to £150mn p.a. | battery capacity to 1,701MWh. As of |  | Q2 2025 and will announce full details at | | --- | --- | --- | |  |  | that time. The new facilities are expected | | had reached 845MW and 1,207MWh. | 455MWh to tolling. We are onboarding | to provide a longer term and reduced | | Since the year end, Melksham (100MW / | the remaining capacity through Q1 and | margins compared to our existing facilities; | | 200MWh) has become fully operational | Q2 2025, with total capacity onboarded | these new facilities are expected to | | and the augmentation of Coupar Angus |  | unlock additional duration extensions | | to a two-hour duration has also been | the end of Q2 2025. |  | | completed. Therefore, only the 40MW | | additional pipeline. | | / 80MWh Shilton Lane project and the | We have learned a lot from the tolling | | | | arrangements and the Manager is |  | 87MW / 174MWh West Bradford project leveraging this to unlock additional Manager will proceed with the main stages are outstanding and we expect them to multi-year contracted revenues, to of the Three-year Plan, as described on come online in Q2 2025. | | support existing and incremental debt | the following pages. | | --- | --- | --- | |  | capital being sought to execute the | | | is operational it could achieve c.£59.4mn | Three-year Plan, as described below. | | in annualised EBITDA during the tolling arrangement, assuming non-contracted assets perform at the recent merchant net revenue levels of £75,000 per MW (based on the Modo BESS index from December 28 2024 to February 2025) . 28. Calculation of possible EBITDA under revenue scenarios as part of the alternate valuation tables on pages 35 to 37 Gresham House GRID Annual Report 2024 15 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review Three-year Plan ## 4 5 6 | Augmentation of the | New investment pipeline | | Additional revenues – | | --- | --- | --- | --- | | existing portfolio | The Manager has shortlisted 694MW of |  | an increased revenue | | | projects for construction. The projects | expected to be announced at the time of | | | During the Capital Markets Day, we | | | stack | | | described at our Capital Markets Day have |  | |  not changed, however Monet’s Garden listed below may be amended, for example In addition to the established sources duration increases across the portfolio, to and Lister Drive are now in at 57MW each, if other opportunities arise. We expect  extend assets to durations of at least two instead of 50MW. to begin works on the pipeline in the trading (through the BM and wholesale) hours. This was in addition to the 330MWh second half of 2025. and now tolling, the Manager continues to of duration increases we added through work on additional revenue opportunities. 2024 and the start of 2025. Grid Due to commercial sensitivity we are not  connection Battery Battery providing further details today but the have been identifying an initial list of capacity capacity duration  augmentations to add battery capacity to the EBITDA growth levels set out during Pipeline projects Location (MW) (MWh) (c. hours)  the Capital Markets Day. Cockenzie A Scotland 240 480 2 anticipated from these augmentations have not been included in the NAV; they Monet’s Garden North Yorkshire 57 114 2  Lister Drive Merseyside 57 114 2 ### Summary: a plan to been concluded. Further augmentations, Elland 2 West Yorkshire 100 200 2 ### described in our Three-year Plan deliver signicant growth presentation at our Capital Markets Day Ocker Hill Midlands 240 480 2 ### and catalyse increasing in November 2024 (which would take total Total pipeline 694 1,388 2 augmentation of the current portfolio to ### shareholder value c.1,500MWh) will be decided in the future, with the decision being taken as a function The Three-year Plan aims to deliver of the prevailing battery technology and  battery prices, among other factors. and EBITDA. We aim to further increase operational capacity over the next three years and increase average duration to around two hours. This growth is set to be funded by well-priced debt, supported by contracted revenues. Successful execution of the plan is expected generate  Gresham House GRID Annual Report 2024 16 Sustainability Accounts Other information Governance Overview Portfolio Market and nancial review ## Portfolio Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Investment Portfolio ### Portfolio and pipeline In the year, we commissioned three Post year end, we completed ### Portfolio new projects (York, Penwortham and Melksham (100MW / 100MWh) in ### construction updates | Our Investment Portfolio and Pipeline | |  | January before completing the duration | | --- | --- | --- | --- | | consist of 35 BESS projects across | The chart below summarises the | capacity and completed augmentations | extensions at Melksham (100MWh) and | | GB, of which 27 are operational today. | increases in capacity through 2024 in |  | Coupar Angus (40MWh). | | Current operational capacity is 945MW / | terms of both MW and MWh. The duration | (Arbroath, West Didsbury, Enderby, | | In total, we have added 330MWh to our 1,447MWh and is set to reach 1,072MW / of a BESS is the ratio of MWh to MW. Nevendon and Penwortham), adding a operational capacity since the start of 2024, 1,701MWh shortly after the release of this  by augmenting existing sites. The Manager  will apply the expertise developed through Lane (40MW / 80MWh) and West Bradford these projects to future augmentations and (87MW / 174MWh) expected in Q2 2025. to site design of new projects, as part of the As part of the Three-year Plan, we are next phase of construction. targeting the construction of further duration extensions on existing assets, alongside new two-hour projects through 2026 and 2027. The pipeline of available GRID portfolio growth since December 2023 (MW/MWh) projects extends beyond these but is subject to securing further funding and capital allocation considerations. The ,600MW 174MWh 1,600MW  80MWh 1,701 alongside the announcement of the ,400MW 40MWh 100MWh 1,400MW MWh | |  | | 26MWh | 100MWh | 1,447 | | | --- | --- | --- | --- | --- | --- | --- | | | | ,200MW | | | | 1,200MW | | 1,800MW | | | 1,800MWh | | MWh | | 50MWh 100MWh ,000MW 87MW 1,000MW 50MWh 1 50MWh h 50MWh 100MW 40MW 5MW | | | | 17MWh | 76MWh | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 800MW | | | | | | | | 800MWh | | 1 | | | | | | | h | | | | | | 788MWh | | | | 50MW | | | | | | | | | | 50MW | | | 1,072 | | 50MW 600MW MW 600MWh 1 h 945MW 690MW | | 400MW | | 400MWh | | --- | --- | --- | --- | | 1 | | h | | | | 200MW | | 200MWh | York | | | | | | | | | Elland | | | | | | | | | | | today | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | (Jul-24) | | (Jul-24) | | | | | | | | | | | | | | | | | | | | (Mar-24) | (Apr-24) | (Apr-24) | | Enderby | | | (Oct-24) | (Oct-24) | | (Nov-24) | | (Jan-25) | (Apr-25) | | (Apr-25) | | | | (Jun-25) | | | | | Arbroath | | | | | | | | | | | | | | | | | Capacity | | (May-25) | | | | | | | | | | | | | | | | Nevendon | | Melksham | | | Melksham | | | | | | | | | Capacity at | | | | | | | | | | | | | | | | | | | | | | Capacity at | 30-Jun-25 | 31-Dec-23 Penwortham Penwortham Shilton Lane West Didsbury Coupar Angus West Bradford Capacity (MW) New project additions (MW) Augmentation additions (MW) Gresham House GRID Annual Report 2024 18 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Capacity (MWh) New project additions (MWh) Augmentation additions (MWh) Investment Portfolio ## Augmentations case study ### Rapid, low-risk duration The works consisted of doubling up existing containers behind inverters, to free up half ### extensions increase of the inverter capacity at the site. We then ### operational battery capacity, placed new containers next to the free ### andearnings potential inverters and connected them to the site. This approach required no changes to grid | Through 2024 and into the start of | connection equipment and no new inverters, | | --- | --- | | 2025 we have prioritised augmenting | and the cost was therefore limited to the | | existing sites over building new capacity. | new batteries and some electrical works. | Extending the duration of existing  The images show the site before a faster way to increase the portfolio’s augmentation (top) and after (bottom). earnings capacity, since we have typically  completed augmentations in around added alongside existing inverters, while three months, whereas new projects half the existing battery containers can take multiple years from project (green) have been moved to new positions acquisition to completion. alongside other existing containers. Using Enderby pre augmentation – 50MW / 50MWh  can present challenges. The approach we took at Enderby avoids these challenges ### Enderby  | Enderby was one of the sites we augmented | The controller system then runs over | | --- | --- | | in 2024 and was the location for our | both technology types, balancing to the | | investor site visit in October 2024. Enderby | inverter level. | was built in 2023 at 50MW / 50MWh and The Enderby site has more land was designed with augmentation in mind, available for further duration increases, with foundation works put in place during  the original build. This enabled us to add revenue opportunities. capacity relatively quickly in July 2024, once we had decided to increase duration. Enderby post augmentation – 50MW / 100MWh Gresham House GRID Annual Report 2024 19 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Investment Portfolio ### Penwortham At Penwortham, we left the containers in place and instead moved half of the inverters to the available space on the site. The top image shows the original green containers pre-upgrade, with the bottom image showing the new white battery containers we added during the augmentation, with the green inverter boxes moved into their new positions.  at Enderby, where containers are paired together behind inverters and the site is subdivided by battery type. As with Enderby, Penwortham was planned for a duration increase at the time of Penwortham pre augmentation – 50MW / 50MWh the original build, allowing us to quickly deliver the augmentation once the initial site was connected in 2024. As battery prices fall, the duration a site can go to and still hit our return targets increases. We are now seeing the opportunity to hit our return targets in some instances at a four-hour duration, whilst two-hour durations remain the focus we are monitoring for opportunities to install longer duration assets. Penwortham post augmentation – 50MW / 100MWh Gresham House GRID Annual Report 2024 20 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Investment Portfolio ### Map 18 21 Chart numbers correspond to the Company portfolio table on pages 22 and 23 17 28 31 13 16 8 32 9 29 24 25 26 20 34 23 11 33 2 1 ### Next phase of construction 10 19 6 30 ### under the Three-year Plan 35 22 12  presents an opportunity to increase  15 leverage with more contracted earnings. 3 4 27 This should enable us to build out duration 5 increases at existing assets and also build 7/14 Operational new projects across GB in an initial next In construction phase. The likely projects are listed in the Key Three-year Plan section but are subject to Pipeline  Gresham House GRID Annual Report 2024 21 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Investment Portfolio ### Company portfolio (operational, in-construction and pre-construction projects) and exclusive pipeline | | | | | Battery | | Battery | | --- | --- | --- | --- | --- | --- | --- | | | | Capacity | | | size | duration | | Existing assets Location | | | (MW)* | (MWh)* | | (c. hours) Operational status at 31 Dec 2024 | | 1. | Staunch  20 3 0.20 Operational | | | | | | | 2. |  Nottinghamshire 7 9 1.35 Operational | | | | | | | 3. | Lockleaze Bristol 15 22 1.45 Operational | | | | | | | 4. | Littlebrook Kent 8 6 0.80 Operational | | | | | | | 5. | Roundponds Wiltshire 20 26 1.30 Operational | | | | | | | 6. | Wolves West Midlands 5 8 1.55 Operational | | | | | | | 7. | Glassenbury Kent 40 28 0.70 Operational | | | | | | | 8. | Cleator Cumbria 10 7 0.70 Operational | | | | | | | 9. | Red Scar Lancashire 49 74 1.50 Operational | | | | | | | 10. | Bloxwich West Midlands 41 47 1.15 Operational | | | | | | | 11. | Thurcroft South Yorkshire 50 75 1.50 Operational | | | | | | | 12. | Wickham  50 74 1.50 Operational | | | | | | | 13. | Tynemouth Tyne and Wear 25 17 0.70 Operational | | | | | | | 14. | Glassenbury Extension Kent 10 10 1.00 Operational | | | | | | | 15. | Nevendon Basildon 15 33 2.20 Operational | | | | | |  | 16. | South Shields Tyne and Wear 35 28 0.80 Operational | | --- | --- | | 17. | Byers Brae West Lothian 30 30 1.00 Operational | | 18. | Arbroath Scotland 35 52 1.49 Operational |  19. Enderby Leicester 50 100 2.00 Operational  20. Stairfoot North Yorkshire 40 40 1.00 Operational 21. Coupar Angus Scotland 40 80 2.00 Operational  22. Grendon 1 Northampton 50 100 2.00 Operational 23. West Didsbury Manchester 50 100 2.00  * Rounded to nearest MW/MWh Gresham House GRID Annual Report 2024 22 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Investment Portfolio | | | | | Battery | | Battery | | --- | --- | --- | --- | --- | --- | --- | | | | Capacity | | | size | duration | | Existing assets Location | | | (MW)* | (MWh)* | | (c. hours) Operational status at 31 Dec 2024 | | 24. | York York 50 76 1.50 Operational | | | | | | | 25. | Penwortham Preston 50 100 1.00 Operational | | | | | |  26. Elland 1 West Yorkshire 50 100 2.00  27. Melksham Wiltshire 100 200 2.00   Total operational 945 1,447 1.53 28. Shilton Lane Scotland 40 80 2.00  29. Bradford West West Yorkshire 87 174 2.00  Total operational or 1,072 1,701 1.59 under construction 30. Walpole Cambridgeshire 100 200 2.00 Total portfolio owned by 1,172 1,901 1.62 the Company  Battery | | | Capacity | | | size | | --- | --- | --- | --- | --- | --- | | Pipeline projects Location | | | (MW) | (MWh) | | | 31. | Cockenzie Scotland 240 480 | | | | | | 32. | Monet's Garden North Yorkshire 57 114 | | | | | | 33. | Lister Drive Merseyside 57 114 | | | | | | 34. | Elland 2 West Yorkshire 100 200 | | | | | | 35. | Ocker Hill Midlands 240 480 | | | | | Total pipeline not owned by the Company 694 1,388 Total portfolio and pipeline 1,866 3,289 Gresham House GRID Annual Report 2024 23 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Investment Portfolio ### Site information | | 5. Roundponds | 9. Red Scar | | | --- | --- | --- | --- | | 1. Staunch | 20MW/ 26MWh | 49MW/ 74MWh | 13. Tynemouth | | 20MW/ 3MWh | Operational IPO | Operational 2019 | 25MW/ 17MWh | | Operational IPO | Seed asset at | First c.50MW | Acquired in 2020 | | Part of the initial |  | project and largest | One of the original | | seed portfolio at IPO | augmentations | in the portfolio when | EFR assets acquired | | |  | acquired | | | 2. Ruord | | | 15. Nevendon | | --- | --- | --- | --- | | | 6. Wolves | 10. Bloxwich | | | 7MW/ 9MWh | | | 15MW/ 33MWh | | | 5MW/ 8MWh | 41MW/ 47MWh | | | Operational IPO | | | Acquired in 2020 | | | Operational 2019 | Acquired in 2020 | | | Seed asset at | | | Acquired as an EFR | | |  | Our only site | | |  | | | asset - has been | | | after the seed | situated inside a | | | augmentations | | | through a major | | | portfolio | warehouse building | | |  | | | upgrade in 2024 | 7./14. Glassenbury 11. Thurcroft 3. Lockleaze including extension 50MW/ 75MWh 15MW/ 22MWh 50MW/ 38MWh 16. South Shields Operational 2020 Operational IPO Acquired in 2019 35MW/ 28MWh  Seed asset at One of the original Acquired in 2020 and largest assets  EFR assets One of the original to enter Dynamic augmentations acquired, was EFR assets acquired Containment  extended by 10MW  in 2020 12. Wickham 50MW/ 74MWh 4. Littlebrook 8. Cleator 17. Byers Brae Operational 2020 8MW/ 6MWh 10MW/ 7MWh 30MW/ 30MWh  Operational IPO Acquired in 2019 Operational 2021 and largest assets Part of the initial One of the original First asset to enter Dynamic seed portfolio at IPO EFR assets acquired  Containment  Gresham House GRID Annual Report 2024 24 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Investment Portfolio 27. Melksham 18. Arbroath 100MW/ 200MWh 24. York 35MW/ 52MWh 21. Coupar Angus Operational 2025 50MW/ 76MWh Operational 2022 40MW/ 80MWh Largest project in Operational 2024 Scottish asset Operational 2023 the portfolio, split Initially built at  Site built at one hour into two 50MW  from constraint and extended to sites initially for extra duration management at     and extended to  | 19. Enderby | | 25. Penwortham | 28. Shilton Lane | | --- | --- | --- | --- | | 50MW/ 100MWh | 22. Grendon 1 | 50MW/ 100MWh | 40MW/ 80MWh | | Operational 2023 | 50MW/ 100MWh | Operational 2024 | Operational 2025 | | First site to be | Operational 2023 | Site extended from | Two-hour project | | augmented to | First two-hour site | one hour to two | situated in Scotland | |  | |  | connecting in 2025 | 20. Stairfoot 23. West Didsbury 29. Bradford West 26. Elland 1 40MW/ 40MWh 50MW/ 100MWh 87MW/ 174MWh 50MW/ 100MWh Operational 2022 Operational 2024 Operational 2025 Operational 2024 Site originally built to Site extended from Largest single site in Built as a two-hour one hour with plans one hour to two the portfolio, due to project   complete in 2025 Gresham House GRID Annual Report 2024 25 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Market and ## nancial review Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Market overview 2024 | | Revenues increased further in January | | This still implies a very high skip rate | | --- | --- | --- | --- | | Improving revenue outlook | | Dispatch rates of BESS in | | | | 2025, as days when renewable generation | | of 84%, however the trajectory and | | The revenue environment for BESS assets | was low drove greater upside volatility. | NESO’s BM are increasing | recent improvements on the back of | | in GB evolved throughout 2024. | Increased reserve energy procurement after | | dispatch algorithm improvements and the | An improvement in the dispatching of BESS the launch of Quick Reserve in November inclusion of BESS in reserve services are The year started with BESS assets being has contributed to increased revenues. has given BESS assets a further opportunity encouraging, as are ongoing comments severely under-utilised at the national level, for utilisation. Quick Reserve is a faster from NESO about further improvements Modo Energy’s modelling of the in-merit resulting in exceptionally low revenues in response time reserve product designed 29 planned during 2025. dispatch rate shows it has risen to 16% in January and February 2024. Since then, with BESS in mind. December 2024, up from low single digits at various improvements to reduce skip rates the start of 2024. in the BM, the launch of additional services While our portfolio has followed the which BESS can compete in and the national trend, we have consistently continued rollout of renewable generation outperformed the market, as discussed have all improved the revenue picture further in the Financial review. for GB BESS assets, such that BESS The following sections break down some revenues reached their highest level in two of the key drivers and trends impacting years during December 2024, according current market conditions. to Modo Energy. Modo Index – Revenues £/MW/Yr including Capacity Market Evolution of the Modo dispatch rate of batteries in the BM January 2025 revenues at over 2.4x the 14% 90,000 120 revenue level of January 2024 12% 80,000 100 70,000 10% 80 60,000 8% 60 50,000 6% 40,000 40 4% 30,000 20 2% 20,000 16% 0 0% 100,000 140 10,000 DecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFebJan 0 In-merit dispatch rate (%) 20242023 Jan-25Dec-24Nov-24Oct-24Sep-24Aug-24Jul-24Jun-24May-24Apr-24Mar-24Feb-24Jan-24 Bid – Energy Bid – System-agged Oer – Energy Capacity Market Frequency Response Wholesale Oer – System-agged Modo dispatch rate Modo dispatch rate  29. The in-merit dispatch rate is a measure of battery utilisation in the Balancing Mechanism. It is the total dispatched battery volume divided by battery availability that was priced cheaper than the most  Total dispatched volume (GWh) expensive balancing action in that half-hour | | Gresham House | | | | GRID Annual Report 2024 | 27 | | --- | --- | --- | --- | --- | --- | --- | | Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review | | | | | | | | | | Balancing Mechanism Reserve Imbalance | – 15-min. rule | – 30-min. rule | | | Market overview 2024 | The key milestones for improvements | In addition to these changes, there is | Recently, there has been a misconception |  | | --- | --- | --- | --- | |  | a positive background with Labour’s | that BESS revenues are linked only to |  | | | CP30 Action Plan moving the focus on | gas prices, because of the high trading | much greater use of storage. This would |  Launch of the Bulk Dispatch Optimiser mature technologies such as BESS and opportunities that coincided with high lead to more gas actions moving to real (BDO) in January 2024. The BDO enables the inclusion of BESS in the LDES cap gas prices during 2020-2022. However, time in the BM, rather than being started the control room to aggregate BESS  the correlation between BESS revenues up ahead of time. As a result, the full cost units and dispatch them simultaneously. is working on calculating and releasing and high gas prices is actually the result of gas assets would be included in the While the launch resulted in limited a cost analysis of BM skips. The fact  system price calculation, including the improvement at the time, BDO will allow that NESO is reviewing skip decisions with gas being used for the majority of cost of start-up and minimum non-zero for automated instructions across a more transparently is encouraging  times. Shifting away from gas will also large portfolio of assets in future. for the sector.  move the system back towards relying on  Switch from a 15-minute rule to a | | | results in additional costs to the system | renewable generation where it is available, | | --- | --- | --- | --- | | 30-minute “rule” (read maximum | Crucially in 2025 we should see a grid | | | | | | and therefore to consumers. This is | leading to excess renewables driving | | dispatch duration) in March 2024. | code update, to allow BESS assets to | | | | | | made worse by several arrangements for | low or negative prices and a shortfall of | |  | show the length of time they can be run | | | | | | pre-contracting thermal assets, which | renewable generation driving high prices | | are now for 30 minutes and increasing | for, rather than assuming an arbitrary | | | | | | result in a large proportion of the cost of | for starting up marginal units. | | the duration for which batteries |  | | | running those assets, such as reserving can be dispatched increases their control room with the ability to use BESS It is pleasing that as BESS utilisation has and start up, being excluded from the revenue potential. to their full potential. improved during the year and renewable  penetration continues to rise, we have  Launch of Balancing Reserve (BR) in a stronger correlation to the gas price started to see the correlation of BESS April 2024. Reserve services contract in recent years. revenues to renewable generation as BESS to ensure they are available ### BESS revenues predicted. The chart below from Modo when needed during the typical one- Energy shows the correlation between wind ### day contract period. Although limited are increasingly generation and BESS revenues in the year. volumes of BESS were procured initially, ### correlated with rising growth in services such as these ### ensures more volume is procured in renewable generation Battery revenues and wind generation trends in 2024 advance and should improve BESS The investment thesis for BESS has utilisation rates. always been underpinned by the rollout  Quarterly BESS sector CEO roundtables 160 16 of renewable generation. As an electricity  140 14 system relies increasingly on renewables, in December 2024 and April 2025) 120 12 its storage requirements also increase. allow BESS sector leaders to monitor 100 10 This is because storage is needed to avoid progress against commitments made 80 8 costly curtailment of generation during at each session. 60 6 periods when excess renewable power is | 180 | | | 18 | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | 40 | 4 | | |  Launch of Quick Reserve in December | being produced, and to avoid expensive | | | | | | | | | | | 20 | 2 | | | 2024 is driving additional reserve | alternative generation in times of low | | Wind generation (GW) | | | | |  | | | | 0 | 0 | renewable power. Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Revenue (£k/MW/year)  Gresham House GRID Annual Report 2024 28 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Revenues Wind generation Market overview 2024 Solar and wind as percentage of total UK electricity generation Quantity of negative half hour system prices by year Record number of negative prices in 2024 35% 30% 800 25% 20% 600 Increasing number of negative 15% system prices each year 400 since 2021 10% 200 5% | 0% | | | | | | | | | | | | | | | | 0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | | | | | | | 01-Jan | 15-Jan | 29-Jan | | | | | 08-Apr | 22-Apr | | | | | 01-Jul | 15-Jul | 29-Jul | | | | | 07-Oct | 21-Oct | | | | | | | Mar-10 | Mar-11 | Mar-12 | Mar-13 | Mar-14 | Mar-15 | Mar-16 | Mar-17 | Mar-18 | Mar-19 | Mar-20 | Mar-21 | Mar-22 | Mar-23 | Mar-24 | | | | | 12-Feb | 26-Feb | 11-Mar | 25-Mar | | | 06-May | 20-May | 03-Jun | 17-Jun | | | | 12-Aug | 26-Aug | 09-Sep | 23-Sep | | | 04-Nov | 18-Nov | 02-Dec | 16-Dec |   | Prior to April 2024, we saw almost no | Summer months where demand was lower | The greater reliance on renewable | We should see the trend of BESS revenues | | --- | --- | --- | --- | | utilisation of BESS at the national level | and solar output was higher saw more | generation in the electricity system | being driven by renewable generation | | and limited correlation with wind output. | frequent excess renewable generation | creates larger peaks and troughs in power | continue, as BESS are better utilised | | However, after the 30-minute rule was | and hence more regular negative prices. | relative to demand. This means we should | in the BM and able to compete against | | implemented in March, followed by the | BESS was able to capture the negative | see more negative price periods and | thermal generation in areas such as | | launch of the Balancing Reserve and | prices and enhance earnings, driving | more high price periods, as renewable | Reserve services. Summers are likely to | | dispatch algorithm changes from April, we | a direct correlation. In the winter the | penetration grows. Above, we can see the | be dominated by negative prices and the | | see a pattern emerging. |  | ongoing growth in renewable penetration | need to remove excess renewable power, | | | and trading opportunities emerged during | in the UK, with this level of penetration | while winter revenues will be driven by | | | periods of low renewable generation, with | already providing challenges to the | lulls in renewable generation needing to | | | fewer hours of negative prices during | system and opportunities to BESS assets. | be covered by stored energy, with the | | | this time. This leads to higher revenue | | opportunity to discharge for large prices. | In 2024, there were a record number of opportunities during low renewable These imbalances will become much negative day-ahead wholesale prices generation in the winter. greater as renewable generation builds 30  ) and negative half hourly out and may drive greater spikes in pricing system prices (1,072 half hours, see for BESS to capture. This is now the 1,200  investment thesis beginning to play out in on renewable generation. Modo Energy 40% the trading markets. 1,000 forecasts 200 hours of negative day- 29 ahead wholesale prices in 2025 and for further growth beyond that. 30. modoenergy.com/research/gb-battery-energy-storage-markets-2024-year-in-review-great- britain-wholesale-balancing-mechanism-frequency-response-reserve Gresham House GRID Annual Report 2024 29 30-Dec Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review 2019 20212020 2022 2023 2024 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-20 Sep-21 Sep-22 Sep-23 Sep-24 Market overview 2024 Overview Portfolio Market and financial review Governance Accounts Other information ![img-0.jpeg](img-0.jpeg) ## Our scale and expertise put us at the forefront of the market As we see signs of improvement in GB and the trading story beginning to take shape as we had anticipated, it is worth noting that we remain the largest player in this space by some distance. The Company and the Manager have vital expertise and continue to drive the market forward. The announcement of our landmark Energy was another example of moving contractual alternative to trading against market headwinds. In addition, implement across several positioning revenue opp alongside ac asset manage us to continue industry ber leader in the We are well the improvis and able to further capa power, expe Operational capacity by owner ![img-1.jpeg](img-1.jpeg) ## Financial review The graph below illustrates the expansion ### Company metrics table Fund performance in portfolio operational capacity and | | | | | NAV per share fell by 15.3% from 129.07p | improvement in revenues per MW | | --- | --- | --- | --- | --- | --- | | 31 December | | 31 December | | | | | | | | | on 31 December 2023 to 109.35p on | achieved on the underlying portfolio | | | 2024 | | 2023 | | | | | | | |  | through the year, which have resulted | Company metrics a decline in third-party revenue forecast in the overall increase in revenues. The assumptions, which is discussed in the Market Overview section on pages 27 NAV £622.2mn £740.1m n Valuation section below. to 30 discusses the market backdrop Underlying portfolio asset valuation £758.0mn £840.2mn in more detail.  NAV per share 109.35p 129.07p performance of the portfolio revenues and 31 Cash in the Company and subsidiaries £39.5mn £43.7mn EBITDA improved compared with 2023. Revenues were up 20.1% from £38.7mn in Total external debt drawn at Company £150.0mn £110.0mn 2023 to £46.5mn in 2024. This translates   32 Resulting net debt £110.5m n £66.3mn MW in 2024. Likewise, EBITDA grew 12.4% from £25.8mn in 2023 to £29.1mn in 2024. Underlying portfolio performance 33 Revenues £46.5mn £38.7mn 34 EBITDA £29.1mn £25.8mn EBITDA margin 62.5% 66.7% 1,200 200,000,000 MW 845 690 1,000 MW weighted average 778 607 150,000,000 800 MWh 1,207 788 250,000,000 1,400 600 MWh weighted average 998 672 100,000,000 400 Revenue per weighted average MW £59,800 £63,800 50,000,000 Revenue per weighted average MWh £47,10 0 £57,60 0 200 Capacity (MW) 0 0 | | Jan-20 | | | Jul-20 | | | Jan-21 | | | Jul-21 | | | Jan-22 | | | Jul-22 | | | Jan-23 | | | Jul-23 | | | Jan-24 | | | Jul-24 | | | Jan-25 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Mar-20 | May-20 | | Sep-20 | Nov-20 | | Mar-21 | May-21 | | Sep-21 | Nov-21 | | Mar-22 | May-22 | | Sep-22 | Nov-22 | | Mar-23 | May-23 | | Sep-23 | Nov-23 | | Mar-24 | May-24 | | Sep-24 | Nov-24 | | Mar-25 | May-25 | | Projected Capacity (MW) RHS | | | | | | | | | | | Historical Capacity (MW) RHS | | | | | | | | | | | | | | Annualised Actual Monthly Revenue (£) | | | | | | | | | 31. Unaudited Annualised Monthly Revenues (£) 32. Unaudited 33. Unaudited 34. Unaudited | | | Gresham House | | GRID Annual Report 2024 | 31 | | --- | --- | --- | --- | --- | --- | | Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review | | | | | | | | £30,000/MW per year revenue level | | £120,000/MW per year revenue level £210,000/MW per year revenue level | | | Financial review This improved revenue environment may Revenue mix FY 2024 versus FY 2023 ### Underlying portfolio signal that third-party forecasts may | stabilise or improve. Indeed, in December | earnings | | | | --- | --- | --- | --- | | 2024 the portfolio achieved an average | | 22.7% | | | | The revenue mix evolved over the course | | 17.6% | annualised revenue rate of £91k per MW  which, with a portfolio average duration of tolling emerged as a new revenue stream. 25.2% 1.4 hours, was well above the third-party Frequency Response markets continued revenue forecast for 2025. The third-party 50.2% to saturate and the opportunities available forecasts are an important element of the in the trading market expanded, with the NAV calculation, as they are a key input to   52.1% each project’s net present value. Trading, including a small amount of 24.2% 35 TRIAD income, generated the largest share of portfolio revenues at 50.2%, 20242023 up from 25.2% in 2023 as the market ### Financing continued to shift away from ancillary The Company has a £195mn debt facility services. Frequency Response remained The portfolio has also performed well relative to the peer group and consistently via its wholly owned subsidiary, Gresham  outperformed the Modo Energy BESS Index, as shown in the chart below. This was House Energy Storage Holdings Limited 52.1%), while Capacity Market revenues despite the average duration of the Modo BESS Index throughout the year being higher   (1.36hr) than the GRID portfolio (1.26hr). | September 2021 (with committed lines |  | | | --- | --- | --- | | of £180mn), amended and restated in | remainder of the portfolio revenues | | | November 2022 (to a level of £335mn) | increased. Tolling revenues amounted to | Grid portfolio versus market index | | and April 2024 (back down to the current | 8.0% of the mix. We expect this to increase | | |  | as we onboard the remaining assets | | 90,000 revenue backdrop). £150mn was drawn as  80,000 of 31 December 2024 and total gross debt agreement in 2025. 70,000 drawn under this facility is expected to 60,000 peak at £175mn. 50,000 40,000 In Q4 2024 the Manager started a 30,000  100,000 20,000 which is well progressed and expected 10,000 to conclude in Q2 2025. In addition to 0  8.0% is expected to provide additional capital for augmentations of the current portfolio Modo Index Modo Index Modo Index Modo Index Modo Index Modo Index Modo Index Modo Index Modo Index Modo Index Modo Index Modo Index and for the acquisition and build of the GRID Portfolio GRID Portfolio GRID Portfolio GRID Portfolio GRID Portfolio GRID Portfolio GRID Portfolio GRID Portfolio GRID Portfolio GRID Portfolio GRID Portfolio GRID Portfolio £/MW (annualised)  Feb-2024 Mar-2024 Apr-2024 May-2024 Jun-2024 Jul-2024 Aug-2024 Sep-2024 Oct-2024 Nov-2024 Dec-2024Jan-2024 growth as described in the Three-year 35. TRIADs are the three half-hour settlement periods of highest demand on the GB electricity Plan section and elsewhere in this report. transmission system between November and February each year, separated by at least ten clear  days, and are part of a charge-setting process | | Gresham House | | | GRID Annual Report 2024 | 32 | | --- | --- | --- | --- | --- | --- | | Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review | | | | | | | | | Frequency Response Trading CM Tolling | Frequency ResponseCapacity Market Trading TRIADs Tolling | | | Financial review ###  +0.64p gain resulting from the impact Portfolio asset valuations During 2024, the Company also changed ### Valuation of share buybacks made during the one of its curve providers from Cornwall  Insight to Modo Energy, as it recognised Revenue forecasts that Modo Energy were seen to provide ### NAV bridge  +1.54p from valuation gains on new  | | investments, as they moved from | The end of 2023 and start of 2024 saw some | | | --- | --- | --- | --- | | As of 31 December 2024, NAV per share | | | current market conditions. | | |  | of the lowest revenue periods for GB BESS | | was 109.35p, down 15.3% from 129.07p as to in-commissioning or operational  The graph below shows the results of of 31 December 2023. The change to the assets, resulting in a lower discount UK grid. This was a dramatic change given these changes on the blend of the curves  rate being applied; that just 18 months prior, the second half from the two providers, illustrating the |  -22.86p impact from changes to | | of 2022, saw the highest £/MW revenue | | | --- | --- | --- | --- | | |  +2.58p from model roll forward and | | precipitous drop in independent forecasts | | revenue forecasts from independent | | achieved by the Fund. This backdrop meant | | | | modelling adjustments; and | | which resulted in a -22.86p reduction in | | third-party forecasters; | | that by mid-2023, BESS revenue forecasts | | our NAV over the year. If trading conditions  +4.17p increase in NAV from the portfolio   -2.30p due to debt costs; continue to improve the Manager expects  upcoming decline in market revenues. At to see an uptick in revenue forecasts.  -2.14p due to the reduction in assumed year end 2023, the Company applied its own  Further information on the changes short-term reduction in revenue forecasts, to in the year and assumptions used  -1.88p impact from contracted  are provided in the portfolio asset revenues, which is explained below; by the industry. Over time, the independent valuations section below. forecasters followed suit and lowered their  +0.53p increase from a favourable move long-term outlooks for BESS assets. in interest rate swaps; NAV (p/share) bridge from 31 December 2023 to 31 December 2024 Q4 2023 vs Q4 2024 curve comparison NAV/share Increase Decrease 1.54 130,000 135 2.58 0.64 120,000 129.07 (1.88) 130 110,000 125 100,000 120 90,000 80,000 115 4.17 0.53 109.35 70,000 110 (22.86) 60,000 (2.30) | | 105 | (2.14) | | | | --- | --- | --- | --- | --- | | 140 | | | 50,000 | | | | 100 | | 40,000 | | | 140,000 | | | | 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 | to FV Share | | | | | | | Interest | | Q4 2024 Blend 0.5hr Q4 2024 Blend 1.5hrQ4 2024 Blend 1hr Q4 2024 Blend 2hr | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | buybacks | | revenues | Revenue forecasts | | rate swap | | | | 2023 NAV | | modelling | | | Change in | | 2024 NAV | | Debt costs adjustments ination rates 31 December working capital 31 December Rollforward and New contracted New investments EBITDA £mn £/MW/Yr Gresham House GRID Annual Report 2024 33 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Q4 2023 0.5hr (rebased) Q4 2023 1.5hr (rebased)Q4 2023 1hr (rebased) Q4 2023 2hr (rebased) Net fund and SPV Financial review | Contracted revenues | New investments to fair value | The weighted average discount rate | The tolling discount rate does not have | | --- | --- | --- | --- | | | | for the portfolio is 10.73%, which is the | a material impact on the weighted | | Two areas of contracted revenues were | West Didsbury, York and Penwortham are | | | | | | highest amongst our industry peers. This | average discount rate, due to the short | |  | now all operational and passed a 30-day | | | | | | is a small decrease from the weighted | duration of the tolling period (two years) | | Capacity Market (CM) contracts and | proving period by the year end. As such, | | | | | | average discount rate as at 31 December | versus the merchant revenues over the | | tolling revenues. Updated CM contracts | the 0.75% discount rate premium during | | | | | |  | remaining asset life, and because only half | |  | construction was removed during the | | | | | | rate applied for tolling revenues and on | of the assets are included in the tolling | | CM contracts awarded in February 2024. | period. Elland was in commissioning at the | | | | | | those projects moving from construction | agreement during that period. | | These T-1 contracts are for delivery for | year end and the discount rate premium | | | to operations. one year from October 2024.  this. The result of these changes is a total MW MW Tolling revenues from the Octopus NAV increase of 1.54p per share. (31 December (31 December agreement were included at the interims Valuation basis Discount rate approach applied: 2024) 2023) stage. A discount rate of 8.5% is used for these revenues, set at 200 basis points Ination rates Operational  795 640 above the rate used for CM revenues DCF   and at the top of the range guided by the rate (6.5% at FY2023) Merchant/ from 4.5% to 2.75% for RPI and from 4% to Company’s independent valuer. Whilst   tolled rates are in line with the valuation (FY2023: 10.85%) than expected in 2024. This is in line with model revenue curves in 2025, they others in the market. The impact of this (FY2023: n/a) are lower than the merchant revenues change is a -2.14p reduction to NAV. Only forecast for 2026. Whilst the contracting Commissioning  50 – the 2024 assumption has been changed of revenues may limit upside on part of the DCF (energised)   portfolio, this provides helpful protection we apply a 50bps premium to levels of 2.5% for RPI and 2.25% for CPI against weaker revenue environments Operational discount rates (50bps at have not been changed. These apply should they return. FY2023) from 2026 onwards. The net impact of these two changes Construction  – 50 was to reduce NAV by -1.88p. Despite DCF (energised) phase – energised project but not Discount rates the negative NAV impact of the tolling achieved Provisional Acceptance agreement, this was an important step for  The Manager has made no changes to the fund to take to secure a base level of construction premium to Operational the discount rates used, except for the revenues for the portfolio during a time of discount rates (75bps at FY2023) introduction of the new 8.5% rate used for extreme revenue uncertainty. | tolling revenues, as discussed above. | Total MW in operational portfolio 845 690 | | | | --- | --- | --- | --- | | | Construction |  | 227 377 | | | DCF |  | | to Operational discount rates (75bps at FY2023) Cost incurred Assets held at cost as valuation 100 100 to date thresholds not met Total portfolio MW included in valuations 1,172 1,167 Gresham House GRID Annual Report 2024 34 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Financial review ### Operational assets were valued at £684k/ Alternative valuation metrics Financial information FY2022 FY2023 FY2024 MW as of 31 December 2024. Adjusting for | working capital, which means the valuation | As discussed in the Fund performance | All gures are in £mn unless otherwise stated. | | | --- | --- | --- | --- | | only includes the NPV of future cash | section, we believe the alternative valuation | | 38 | | | | Underlying portfolio revenue in each year | 62.7 38.7 46.5 | |  | metrics below provide useful additional | | | 39 | | | Underlying portfolio EBITDA in each year | | 48.8 25.8 29.1 | | --- | --- | --- | --- | --- | | Working capital includes cash, batteries | information for shareholders showing | | | | | and other equipment held for upgrades |  | Total portfolio external debt at each year end 60.0 110.0 150.0 | | | | across the portfolio. | performance and aligns with typical valuation | | 40 | | | | | Total cash | at each year end 78.9 43.7 39.5 | | metrics used for companies. These are Operational capacity at each year end (MW) 550 690 845 | None of the new pipeline assets proposed | provided in addition to the Alternative | | --- | --- | | under the Three-year Plan are currently | Performance Measures set out on | | included in the valuation. | pages 121 to 124. | Historic valuation metrics FY2022 FY2023 FY2024 41 | | Enterprise value (EV) | based on: | | | | --- | --- | --- | --- | --- | | Valuations based on historical | | | 42 | | | | Market capitalisation at 45.9p share price | | | 229.6 329.5 371.7 | performance Using NAV prevailing at each year end 822.8 806.4 732.8 The table below shows valuation metrics 43 EV per operational MW (£k/MW) based on: based on the operational portfolio’s Market capitalisation at 45.9p share price 417.4 477.6 439.9  | using the NAV prevailing at each year end | Using NAV prevailing at each year end 1,496.1 1,168.8 867.2 | | | --- | --- | --- | | and then using the current share price at | | 44 | | | EV to EBITDA | based on: |  Market capitalisation at 45.9p share price 4.7 12.8 12.8 valuation metrics therefore do not take | into account the increase in operational | Using NAV prevailing at each year end 16.9 31.3 25.2 | | | --- | --- | --- | | capacity so far in 2025. | | 45 | | | EV to sales | based on: | Market capitalisation at 45.9p share price 3.7 8.5 8.0 Company valuation FY2022 FY2023 FY2024 Using NAV prevailing at each year end 13.1 20.8 15.8 All gures are in £mn unless otherwise stated. Market capitalisation as a percentage of NAV: 36 Shares in issue (no. shares) 541 573 569 Using a 45.9p share price 30% 36% 42% 37 Market capitalisation at 45.9p share price 248 263 261 NAV per share at each year end (pence/share) 156 129 109 NAV prevailing at each year end 842 74 0 622 38. Unaudited 39. Unaudited 40. Total cash includes cash in the Company and in the underlying operational portfolio 41. Market capitalisation or NAV minus cash plus total external debt  time of writing) 36. Shares outstanding net of shares held in treasury by the Company 43. EV/total operational capacity in MWs  44. EV/total underlying portfolio EBITDA time of writing) 45. EV/total underlying portfolio revenues Gresham House GRID Annual Report 2024 35 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Financial review Overview Portfolio Market and Financial review Governance Accounts Other information Given the portfolio's increased capacity since the start of 2024 and the changing a much smaller earnings base than we expect looking forward. # Valuation metrics based on a range of revenue projections We have therefore provided a forward-looking valuation metrics based on potential near-term future earnings, uncontracted assets and contracted revenues for those assets under tolling arrangements. We have assumed up to £175mn of debt and used the closing share price as of 14 March 2025 (being the time of writing). # Forward valuation metrics based on different merchant revenue 1,072MW capacity All figures are in £mn unless otherwise stated. Assumed merchant revenue on merchant portfolio Average contracted revenue during tolling Assumed underlying portfolio revenue Potential underlying portfolio EBITDA EV to EBITDA⁴⁸ based on: Market capitalisation at 45.9p share price NAV at 31 December 2024 EV to sales⁴⁹ based on: Market capitalisation at 45.9p share price NAV at 31 December 2024 # 2024 Company valuation used for forward valuations on 1,072MW capacity All figures are in £mn unless otherwise stated. Shares (millions) 569 Market capitalisation at 45.9p share price ⁴⁶ 261 NAV as of 31 December 2024 622 Assumed future peak external debt 175 Assumed minimum future cash 10 Assumed operational capacity (MW) 1,072 Enterprise value (EV)⁴⁷ (£mn) based on: Market capitalisation at 45.9p share price 426.2 NAV as of 31 December 2024 787.3 EV per operational MW⁴⁸ (£k / MW) based on: Market capitalisation at 45.9p share price 397.6 NAV as of 31 December 2024 734.4 time of writing) 47. Market capitalisation or NAV minus cash plus total external debt 48. EV/total operational capacity in MW 49. EV/total underlying portfolio EBITDA 50. EV/total underlying portfolio revenues Gresham House Financial review It is worth noting that the EV per operational MW implied by a 45.9p share price is below the estimated build cost of an equivalent portfolio, 51  . 52 £75k/MW/Yr of net merchant revenues  the three months up to writing of this report (December 2024 – February 2025). Alongside this we have shown a sensitivity of £15k/MW/Yr up and down on merchant revenues, to illustrate the volatility in earnings driven by merchant revenues. The portfolio continues to perform at those levels today and we remain  outlook. At these levels, the enterprise value of the Company should look attractive to investors as we see a substantially larger portfolio contributing to earnings in 2025 versus 2024.  business case and investment outlook    the information given here does not and should not be treated as indicating any likely level of    Gresham House GRID Annual Report 2024 37 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Sustainability Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Sustainability report This section describes the We are committed to transparency  Connecting new projects to the National and accountability in our sustainability 2024 was establishing industry standard  ### sustainability aspects of our  methodologies for carbon metrics to the growing number of projects bidding ### business and how we integrate | | obliged to report under the Sustainable | such as avoided emissions. Gresham | to be connected; according to Ofgem, | | --- | --- | --- | --- | | and enhance sustainability in | Finance Disclosure Regulation (SFDR) | House engaged with the Energy Storage | the connection queue was 700GW in | | | and the Task Force on Climate- | Network in September 2024, proposing an | March 2024 and was estimated to be over | ### our investment processes and related Financial Disclosures (TCFD) industry-wide collaboration to produce a 800GW by the end of 2024. ### asset operations. the Board has voluntarily provided  As a result, the Investment Manager appropriate disclosures. across the BESS market participants. revisited its growth plans to avoid these Gresham House has since led the We are proud to hold the Green Economy potential connection delays and continue  ### Introduction Mark from the London Stock Exchange, to deliver operational capacity growth by participants will then use going forward recognising our contribution to the investing in duration extensions of existing in their reporting. As at the publication of The Company’s business is investing in green economy. This demonstrates our sites. In 2024, upgrades were completed this report, the working group are in the  dedication to integrating environmental, at eight of our operational projects,  from the decarbonisation of energy social and governance (ESG) increasing most project durations to and will seek third-party accreditation systems. The growing proportion of considerations into our investment two hours, adding over 300MWh to the by an independent body to improve the energy supply by wind and solar presents processes. Below, we present updates on  credibility of the approach. system operators with challenges our work and performance during 2024. manner. Many of our existing sites and in ensuring stable supply due to the pipeline could go beyond two hours if the intermittent nature of renewable energy economics are favourable. ### generation. By storing energy from the Social ### electricity grid during periods of high Environmental The Manager continues to monitor supply/low demand and releasing energy The operational portfolio’s increased processes to ensure full adoption of the The Manager’s Energy Transition during periods of low supply/high demand,  Supply Chain Policy across its activities Sustainability Committee, overseen by BESS plays a critical role enabling the use needed to ensure lower cost power and suppliers. In 2024, the Manager Gresham House’s Sustainable Investment of renewable energy. availability on demand. As we continue  team with representatives from various to expand our operational capacity, we statement, and these changes have been As sustainability is inherent in our sectors of the Manager’s team, such aim to enhance our impact on electricity incorporated in our activities. Health business, in discussing sustainability as construction, operations and fund consumers by providing tools for better and safety remains a priority, with all we look at the operations, opportunities management, was established to identify management of the National Grid, ensuring construction projects requiring dedicated and risks of our business, as well as the and address emerging sustainability robust demand and supply responses, and Health and Safety oversight.  issues and facilitate knowledge sharing. reducing overall consumer costs. Gresham House GRID Annual Report 2024 39 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Sustainability report ### Governance The GHAM Sustainability Committee meets regularly and remains focused on achieving our sustainability objectives. The Board meets at least quarterly, regularly discussing our approach to ESG considerations and risks as part of the agenda. We remain committed to reporting against SFDR and TCFD, despite these being non-compulsory for the Company. During the year, the Manager worked to meet the requirements of the UK Sustainability Disclosure Regulation (SDR), applying a Focus label to the Fund to further highlight its sustainability credentials and role in the transition to net zero. The Board and Manager are monitoring industry standards and best practice to ensure continued transparency in our reporting of performance against our sustainability goals. Gresham House GRID Annual Report 2024 40 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Task Force on Climate-related ## FinancialDisclosures (TCFD) The recommendations of the Whilst the Company is not required to The Company’s business is investing in BESS also replaces fossil fuel sources comply with TCFD, the Company supports  that are otherwise used as a backup to ### Task Force on Climate-related the disclosure recommendations and from the decarbonisation of energy intermittent sources, as in GB. Because ### Financial Disclosures provide a has therefore voluntarily provided systems. Renewable energy generation sustainability is inherent in our business, reporting framework based on TCFD disclosures. through wind and solar is inherently in discussing sustainability we look at the intermittent. The growing proportion of operations, opportunities and risks of our ### a set of consistent disclosure The Company began reporting against the | | | energy supply by wind and solar presents |  | | --- | --- | --- | --- | | recommendations. | TCFD recommendations in its 2021 Annual | | | | | | energy system operators (ESOs) with | we conduct our business. | Report and has added to those disclosures challenges in ensuring stable supply. in subsequent periods. In this 2024 This framework provides a level of Annual Report, the Company continues By storing energy from the electricity grid comparability and transparency  during periods of high supply/low demand around climate-related risk exposures disclosures which aim to be consistent and releasing energy during periods of low and approaches. with the TCFD recommendations and supply/high demand, BESS plays a critical recommended disclosures. role enabling the use of renewable energy. Gresham House GRID Annual Report 2024 41 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Task Force on Climate-related FinancialDisclosures (TCFD) ### 2 Describe management’s role In April 2024, Gresham House released its fourth Sustainable Investment Report ### in assessing and managing highlighting the Investment Manager’s ### climate-related risks and focus on investments that are well ### opportunities placed to provide long-term solutions to the issue of climate change as part The day-to-day management of ESG of its 2025 Corporate Sustainability and climate matters is delegated to Strategy (CSS) and which included the Investment Manager, which applies updates on climate-related activities considerations outlined in the Gresham across the Gresham House group. This House Energy Transition Sustainable is available on the Gresham House Investment Policy when making new website at https://greshamhouse.com/ investments and in the running of the sustainable-investing/. Company’s existing investments. The Manager also ensures that climate The Investment Manager’s CSS and Climate-related risks and opportunities ### Governance change-related risks are considered for Sustainable Investment Policy inform the  individual investment projects. application of the Company’s strategy strategy, including the intention to and its assessment of risks. This is continue to expand the portfolio to ### 1 Describe the Board’s oversight The Investment Manager monitors complemented by sustainable investment capture opportunities arising from the ### of climate-related risks and climate-related risks through the risk objectives that have been established for decarbonisation of energy use and the register, utilising knowledge gained by its ### opportunities the Energy Transition division and align to increased penetration of renewable experience in operating the investment the Investment Manager’s CSS. energy in GB and overseas. The Board has overall responsibility portfolio, from information gathered for the Company’s risks, opportunities through due diligence processes and by The Energy Transition division’s The Company follows the Gresham House and compliance. The Board considers engaging with third parties as appropriate. sustainable investment objectives Energy Transition Sustainable Investment the Company’s approach to ESG include Climate Change & Pollution as a Policy which is available on the Gresham The Investment Manager has also considerations and risks, which include priority topic with an objective by 2025 here. Climate change engaged with the Company’s largest the potential impact of the physical to “Demonstrate the role of new energy and environmental pollution is a key shareholders to better understand consequences of climate change and in the energy transition and understand topic within the Sustainable Investment the investor community’s perspective changes to the business outlook for BESS the carbon footprint of the full lifecycle of Framework which is used to structure on sustainability-related issues, as a result of governmental policy and the assets with the intention of reducing it”. analysis, monitoring and reporting of including climate-related strategy, increased penetration of renewables. In 2025, progress towards the objectives ESG issues and opportunities within the disclosure and metrics.  lifecycle of our investments. Climate change risks are captured by the objectives will be reviewed and a new The Investment Manager’s Sustainable Company’s risk management framework The Board reviews all aspects of the sustainability strategy will be developed to Investment team monitors the evolving via the risk register which is maintained Investment Manager’s performance further evolve our approach to sustainable climate-related government policy and and updated by the Investment Manager annually, including adherence to the investment and align with Gresham participates in industry forums and and the subject of consideration and Company policies, and the Board’s Audit House’s overarching 2030 strategy; this  debate at the Board’s quarterly meetings. Committee considers the Company’s will include Group and divisional-level net investment-related policy developments climate-related disclosures. zero strategies. that may include climate change mitigation and adaptation. Gresham House GRID Annual Report 2024 42 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Task Force on Climate-related FinancialDisclosures (TCFD) Whilst the Company has ambitions to These climate-related factors, which The Board and Investment Manager ### Strategy develop internationally, the portfolio is are applicable over the lifecycle of the  currently geographically limited to Great Company’s investments, are incorporated the principal risks facing the Company, Britain and therefore the Company’s into third-party revenue curves including climate-related risks, and these ### 3 Describe the climate-related climate-related risks and opportunities are which are used within the Company’s are captured within the risk register. ### risks and opportunities the | | currently focused on Great Britain. |  | | | --- | --- | --- | --- | | organisation has identied over | | | The Company’s investments are designed | | | The Company’s investments in BESS are | The Board and Investment Manager also | to operate over time horizons of 25 years | ### the short, medium and long term | |  | recognise that there are certain climate- | or more. The table below sets out the key | | --- | --- | --- | --- | | The Company is committed to investing | related opportunities over the short, | related risks that could have an impact on | climate-related risks and opportunities | | in and developing Battery Energy Storage | medium and long term by participating | the Company in relation to changes in the |  | | Systems (BESS) to contribute to, and | in the opportunities arising from the | business environment and physical risks | Manager over the short term (<12 months), | |  | decarbonisation of energy usage and | caused by extreme weather events. |  | | energy systems. | the increased penetration of renewable | | term (5-25 years) and include their potential | | | energy and the corresponding increase in | |  | | | energy storage requirements. | | of the Company. | Timeframe Opportunity Risks Short term  The continuing rollout of renewable generation increases demand for   BESS to balance the energy system and may increase the volatility earn revenues from wholesale trading activities in the prevailing and forecast power price, providing wholesale  Saturated market for ancillary services depresses pricing for those services trading opportunities  Lack of progress in the development of NESO systems and processes continues  Medium term  Increased government and public support for decarbonisation increases  Increased competition for investment opportunities will increase project costs the volume of sustainable and impact investing   Implementation of carbon pricing in new sectors may lead to increased  Increased focus on BESS as a key enabler of renewable deployment may lead investment in companies that enable renewable deployment to greater regulation and associated costs  Reductions in battery prices and advances in battery technology provide  Co-located batteries on renewable generation sites may reduce the need for standalone BESS opportunities to augment existing sites and increase the MWh of the portfolio at a lower cost of ownership and in a relatively short timescale Long term  As economies continue to move away from fossil fuels, demand for   electricity will increase and could increase power prices and power and storm damage price volatility    Advances in battery technology may lower cost of ownership and provide  Development of alternative energy storage systems to support the rollout of new opportunities to increase participation in energy markets renewable power generation may lead to early obsolescence of BESS, causing asset write downs Gresham House GRID Annual Report 2024 43 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Task Force on Climate-related FinancialDisclosures (TCFD) ### 4 Describe the impact Risks Financial planning Risks ### of climate-related risks The Company’s portfolio is focused  ### and opportunities on the Opportunities exclusively on BESS within GB, and as such the portfolio investments are likely to be ### organisation’s businesses, is exposed to the physical, technological  Despite a poor revenue environment in  prices which are outside of the control of ### strategy and nancial planning 2024, the medium and long-term outlook However, the investment portfolio is the Company or its investments. for BESS remains strong and this is geographically spread in GB, and given the anticipated to provide access to investor Increased input prices linked to carbon- nature of BESS technology, is not generally ### Investment portfolio capital in the future. related raw material costs may increase  construction costs of pipeline assets Consideration is given to potential The development of new, contracted, Opportunities and therefore reduce returns available  revenue sources for BESS, such as to the Company. planning phase and the geographic spread The Company’s operational BESS tolling revenues, may also open up provides resilience against local issues. investments participate in the market access to further sources of debt The emergence of new energy storage  funding, further enabling the Company technologies may require the Company from governmental and societal support  to invest in research and development, ### Strategy for deployment of renewable technologies. thereby impacting on returns. Volatility of wholesale power prices,  driven by volatility in the availability price volatility driven by increased Opportunities of renewable energy generation, may renewables penetration and a relative lack  of BESS capacity. Increasing awareness and attention to trading energy as renewables become an climate change has spurred increased The Company has also developed a increasing proportion of the energy mix. deployment of renewable energy  As high energy prices are typically driven  projects which have been constructing by fossil fuel generation and low prices opportunities for BESS in the short, BESS assets. Large parts of this pipeline driven by high renewable generation, medium and long term. The Company is a have recently been commissioned or are any increase in carbon pricing is likely to leading provider of BESS in GB and has a expected to be commissioned shortly. extend spreads with fossil fuel generation  having to increase pricing to cover the  cost of running. This means there is an opportunity for increased revenues Risks resulting from increasing carbon prices. Development of BESS capacity in GB has The Company uses the services of led to the saturation of the market for third-party experts to estimate revenue BESS ancillary services in GB and greater opportunities for BESS over the short, reliance on the wholesale trading market, medium and long term, taking into account resulting in greater volatility of returns. the large number of potential variables,  the third-party experts are used within the  Gresham House GRID Annual Report 2024 44 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Task Force on Climate-related FinancialDisclosures (TCFD) 5 Describe the resilience of  SSP2-4.5 which represents a likely, This scenario analysis has been used Transition risks middle-of-the-road climate scenario to identify which assets are likely to ### the organisation’s strategy, with an end-of-century temperature rise experience a change in climate conditions It is likely that wholesale energy markets, ### taking into consideration of around 2.7°C  which provide the majority of the ### dierent future climate the Investment Manager’s exposure to investment portfolio’s revenues, will be  SSP3-7.0 which represents a high ### scenarios, including a 2°C physical climate risks. Changing climate  GHG scenario with an end-of-century | | | conditions do not mean the risk is material | climate-related factors. Some of the most | | --- | --- | --- | --- | | orlower scenario | temperature rise of 3.6°C | | | | | | and given the geographic spread of the |  |  SSP5-8.5 which represents a worst- Company’s investment portfolio within  government policy (including carbon cost case, fossil fuelled development GB and the nature of BESS technologies, ### Physical risks regimes and mandated plant closure); scenario with a 4.4°C temperature rise the Board and Investment Manager do  penetration of renewables and the ability | In 2024, preliminary climate scenario | | not consider that there are likely to be | | | --- | --- | --- | --- | | | The percentage of the portfolio’s assets | | of NESO to develop appropriate systems | | analysis was conducted across | |  | | | | expected to face increasing water stress, | | to manage variable energy supply; | | the Company’s assets to build an | | investment portfolio. | | increased average daily precipitation and | understanding of exposure to changing | | |  development in future technologies | | --- | --- | --- | --- | | | increased average daily temperature by | To build on this assessment, next steps | | | climate conditions. The scenarios used for | | | designed to deal with and adapt to | | | 2050 is displayed in the table below. | will involve assessing the materiality of | | |  | | | climate-related matters; and |   SSP1-2.6 which represents a low GHG  changing patterns of demand (including of hazards analysed and reviewing the emission scenario, resulting in a below the impact of electric vehicles, heat pumps design and management plans of at-risk 2°C end-of-century temperature rise and increased use of air conditioning). assets to ensure material risks can be  The Company uses the services of third- Below Business- party experts to estimate the impact of Hazard 2°C as-usual Worst case Currently, physical risks are considered those factors in energy prices over the 53  Water stress 16% 8% 10% short, medium and long term to create low, increased infrastructure costs to cope 54 Precipitation 0% 6% 0% high and central case scenarios. These with potential physical risks are not 55 scenarios, which factor in Government Daily maximum near-surface air temperature 59% 94% 100% anticipated to be material. Flood defences commitments, a view on the likelihood are already considered in the investment of their implementation, and expected portfolio with a number of projects having carbon prices, are then embedded key equipment elevated above the ground  to reduce risk of damage in the event scenarios are used within the Company’s   insurance costs to cope with potential  physical risks are not anticipated and their timing, is highly uncertain. to be material. 53. Calculated using data from Aqueduct Water Risk Atlas. SSP1-2.6 is below 2°C scenario. SSP3- 7.0 is considered business-as-usual scenario. SSP5-8.5 is considered pessimistic scenario. For the  analysis, increased risk is moving into a higher category of water stress i.e. from low-medium (10-20%) to within the wholesale market, or to provide medium-high (20-40%) ancillary services, provides revenue 54. Calculated using CMIP6 climate projections from Copernicus Climate Data Store. SSP1-2.6 is below 2°C scenario. SSP2-4.5 is considered business-as-usual scenario. SSP5-8.5 is considered worst-case opportunities even in low case scenarios. scenario. For the analysis, increased risk is an increase of >5% in average daily precipitation 55. Calculated using CMIP6 climate projections from Copernicus Climate Data Store. SSP1-2.6 is below 2°C scenario. SSP2-4.5 is considered business-as-usual scenario. SSP5-8.5 is considered worst-case scenario. For the analysis, increased risk is an increase of >0.5°C in daily average temperature Gresham House GRID Annual Report 2024 45 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Task Force on Climate-related FinancialDisclosures (TCFD) ###  Transition risk 8 Describe how processes ### Risk management climate risk assessment approach in ### for identifying, assessing and line with the evolving nature of climate The anticipated growth of renewable ### managing climate-related factors and emergence of climate-related energy generation, which is likely to lead ### 6 Describe the organisation’s ### tools and data. to increased volatility of wholesale power risks are integrated into the ### processes for identifying and ### prices, is considered to be an opportunity organisation’s overall risk ### assessing climate-related risk for the investment portfolio rather than a ### management risk. However, shifts in power demand or ### 7 Describe the organisation’s   As noted above, climate-related risks ### Company or its investment portfolio are processes for managing pricing, impact the ability of the portfolio are integrated into the Company’s risk ###  climate-related risks companies to generate revenue. The management framework through the Manager as part of the risk management Investment Manager regularly updates the investment process and through the The Board and the Investment Manager   regular review of the Company’s risks   net revenue yield curves. carried out by the Investment Manager facing the Company, as determined and consideration given to likelihood and and are included in the risk register which  impact and ranked accordingly. The Investment Manager keeps abreast is reviewed quarterly by the Board. of developments in battery and storage   ### part of the due diligence process that Physical risks Company’s market opportunities in the is carried out prior to acquiring new future. In 2024, the Manager engaged portfolio companies by the Investment Potential physical risk factors that are sustainability consultants Sancroft to Manager and independent experts.  produce a memorandum on the state of The Investment Manager has created  the BESS industry, current market issues, a detailed ESG decision tool which is design reviews, site inspections or during  completed prior to making acquisitions of routine maintenance, may be mitigated via inequalities entitled “The Case for Urgent portfolio companies. design changes such as raising containers Action to Increase the Role of Battery  Storage in the UK’s Balancing Mechanism”. This decision tool includes consideration assessments are undertaken to determine Sancroft then engaged with Ofgem, of numerous ESG and climate factors  DESNZ, NESO, politicians, universities and including environmental assessment,  other key industry participants to promote  assets have temperature management BESS as key to net zero in the UK. suitability of construction contractors to (such as air conditioning or liquid cooling) adequately deal with environmental or and further mitigations of physical risks climate-related mitigation actions. During are considered at the planning stage and investment appraisal, consideration is are often required to be considered as given to available climate mitigation and part of planning approval. any the costs of putting this in place are factored into the investment proposal. Principal and emerging risks, which may include climate-related risks, are disclosed within the Company’s Annual Report. Gresham House GRID Annual Report 2024 46 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Task Force on Climate-related FinancialDisclosures (TCFD) ### The Board and Investment Manager 10 Disclose Scope 1, Scope   ### Metrics consider that the most important Scope 2 and Scope 3 (transmission ### 2, and if appropriate, Scope 3 climate-related metrics for the Company and distribution losses and well to ### greenhouse gas emissions, and relate to the scale, availability and tank emissions) CO emissions for the ### 9 Disclose the metrics used ###  the related risks year ended 31 December 2024. The ### by the organisation to assess  calculations were supported with input ### climate-related risks and The Company reports emissions using from third-party carbon consultants  Total operational BESS capacity at the the Greenhouse Gas (GHG) Protocol which ### opportunities and apply the Partnership for Carbon year end (MW and MWh) is the most widely used framework for Accounting Financials’ (PCAF) “The Renewable energy generation through  Weighted average BESS capacity reporting on carbon emissions and this Global GHG Accounting & Reporting wind and solar is inherently intermittent for the year (MW) framework separates emissions into the Standard for the Financial Industry” and the increased proportion of the   Carbon emissions avoided (tCOe) (December 2022). UK Government energy generated by renewables   conversion factors and environmentally therefore increases the challenges facing In addition, the Investment Manager will or controlled sources extended input-output (EEIO) emissions energy system operators to ensure a monitor carbon emissions and carbon factors have been utilised to facilitate   stable supply of energy. The Company’s intensity metrics in line with TCFD the calculations. generation of purchased energy investments in BESS play an important  role in facilitating the use of renewables by    providing ancillary services that support the value chain  GHG emissions – Scope 1, 2 and 3 the transmission network balancing carbon emissions (tCOe) system and by storing energy from the | | | | 31 December | | 31 December | | | --- | --- | --- | --- | --- | --- | --- | | electricity grid during periods of high |  Weighted average carbon | | | | | | | | | Metric | | 2024 | | 2023 | | supply/low demand and releasing energy | intensity (WACI) (Scope 1 and 2 | | | | | | Scope 1 emissions (tCOe) 2,598 7,541 during periods of low supply/high demand.  Scope 2 emissions (tCOe) 1,607 5,228 To date, the rollout of BESS has lagged The methodology used to calculate the behind the deployment of renewable Scope 3 (emissions (tCOe) 1,752 1,876 average carbon intensity and carbon | energy. The Company has been targeting | emissions is documented in sections 10 | | | | --- | --- | --- | --- | | | | WACI (tCO | 90 297 | | growth of its investments in BESS to | and 11 of this report respectively. | | | Scope 1 and 2 emissions) support renewable generating capacity and thereby reduce dependency on fossil fuels. Carbon emissions methodology   c nancial Emissions = x Company Emissions c Total Equity and Debt c Gresham House Outstanding Amount GRID Annual Report 2024 47 Fi ## Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Σ Task Force on Climate-related FinancialDisclosures (TCFD) Emissions reported currently encompass For battery assets, the presumed energy 11 Describe the targets used However, BESS will also displace fossil only operational assets and do not yet consumption of an asset is calculated by fuel-based energy generation operating ### by the organisation to manage account for assets under construction. deducting energy exported from energy as a backup system (which is often kept ### climate-related risks and | The Company intends to expand | imported (kWh) by the asset. Half-hourly | | “warm” in advance of use) and it therefore | | --- | --- | --- | --- | | reporting to cover construction assets in | UK electricity grid carbon emissions | opportunities and performance | enables the avoidance of emissions | | future periods. | factors are then applied to estimate the | against targets |  | | | carbon footprint associated with this | | between the carbon associated with the | | | energy consumption. | | energy imports and exports. | | More information on Scope 1, 2 | | BESS capacity | | | | Scope 3 emissions in this reporting | | The current BESS avoided emissions | ### and3 emissions include Transmission & Distribution (T&D) BESS capacity underpins multiples of methodology utilised by the fund was  renewable generation capacity and developed in partnership with the Carbon Scope 1 emissions for the Company associated with loss during transmission therefore incremental BESS deployment Trust in 2022. As at February 2025, the  and distribution of energy consumed by is a key measure. The Company has Energy Storage Network working group certain assets. Only one of the Company’s the BESS assets. The Scope 3 emissions continued to grow its portfolio of   also include the estimated well to tank operational BESS capacity despite industry standard methodology. As amounts of gas or diesel, with the bulk emissions associated with natural gas industry-wide challenges. The operational  of generation coming from gas at that consumption. In future, the Investment capacity reported by the Company, of development, the previous year’s site. Further, one other asset used a small Manager will look for ways to include measured in MW and MWh capacity, has methodology has been used for this amount of diesel for testing under its Scope 3 emission calculations for grown as shown below. report. More detail on the methodology Capacity Market contract obligations and construction activity, as well as identifying applied for this is set out below. did not represent a material trading return. opportunities to engage with suppliers to It should be noted that at this stage  take action to reduce such emissions. ### GHG emissions avoided the carbon avoided methodology gas emissions released from indirect As BESS generally store energy during does not account for lifecycle consumption of energy. periods of high renewable energy carbon impact, i.e. carbon emissions generation/low demand and release associated with the supply chain and energy during periods of low renewable construction of the assets. Weighted-average carbon intensity methodology and metric energy generation/high demand, there   carbon-intensive assets, expressed in tCO BESS within the electricity grid (on the  assumption that BESS exports would otherwise by met by fossil generation). i i i x ## ( current portfolio value issuer’s $M revenue ) n i Operational capacity Operational capacity (MW) (MWh) Note that “issuer” in the case of the Company refers to its battery assets. 31 December 2020 315MW 380MWh 31 December 2021 425MW 473MWh 31 December 2022 550MW 598MWh 31 December 2023 690MW 788MWh 31 December 2024 845MW 1,207MWh current value of investment Gresham House issuer’s Scope 1 and Scope 2 GHG emissions GRID Annual Report 2024 48 ## Σ Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Task Force on Climate-related FinancialDisclosures (TCFD) | On this measure, the carbon avoided | The Scope 2 methodology omits two | The average carbon intensity of the grid | Grid stability baseline emissions = | | --- | --- | --- | --- | | by the Company’s BESS investments is | key aspects of the broader role of BESS | is relatively stable due to a general high | 50%BESS capacity x No. hours in | |  | that should be factored into carbon | prevalence of gas and, therefore, the | service x grid operational margin | | |  |  | | This baseline is then compared to the YE 31 December 2022 510,291 tCO intensity is often relatively small on any 1 no value is attributed to BESS services calculated emissions to estimate the given day. BESS will typically result in YE 31 December 2023 677,775 tCO  emissions avoided. The approach taken is net consumption of energy as a result of YE 31 December 2024 596,764 tCO and the renewable generation this allows likely to result in a conservative estimation round-trip losses, i.e. it imports a greater on the system; and of the avoided emissions as it only factors volume of energy than exported with a in the emissions avoided during periods resulting “carbon consumption”. Unless 2 whilst trading, the battery exports would ### Carbon emissions avoided of Frequency Response services and consideration is given to the wider carbon replace the next marginal asset that not emissions avoided through trading. ### methodology  would otherwise be called upon, which The calculation also uses average enable, i.e. Frequency Response enabling would be a higher carbon intensity Scope 2 emissions show the net carbon carbon intensity rather than marginal greater reliance on renewables, the technology such as gas, than the emissions impact of assets’ operations asset intensity. carbon emissions impact of these assets average intensity on the grid. Therefore, through energy consumption. This will be misstated.  Under the current methodology the methodology for BESS assets is such marginal unit carbon cost and not the estimated carbon emissions avoided from that the net metering, i.e. import and Therefore, we have worked with third- average intensity. our portfolio for 2024 was 596,764 tCO export of energy by each battery, is party data providers to factor in the ). assumed to be consumed/avoided at the  As shown in the chart on the previous average intensity of the national grid for Response services. The avoided emissions page, imports are typically carried out each half hour. are calculated by comparing calculated during half-hourly periods when carbon ### emissions against a baseline emission Target for GHG intensity is lower, whilst exports are This calculation demonstrates the should these BESS assets not be available ### emissions avoided typically delivered during higher carbon operational carbon emissions of the to the electricity grid operators. intensity periods on the grid.  The Investment Manager is in the process role of BESS assets when it comes to In the case of a BESS asset performing of developing a group-wide net zero Low prices are typically driven by high broader grid carbon emissions and their Frequency Response services, the strategy, which will look to include asset output from renewables, leading to role in supporting increased penetration of baseline is assumed to be a plant at the  lower grid carbon intensity, whilst high renewables and decreased use of carbon- operating margin. For the purposes of the targets and engagement strategies, and prices are typically driven by periods intensive energy generation. estimation, it is assumed that a BESS asset  of lower renewables output when would maintain a state of charge of 50% in including the Science Based Targets power is delivered by higher carbon- order to provide headroom in the battery initiative. The Investment Manager intends intensive and more expensive power to deliver upwards and downwards actions to publish this by the end of 2025. technologies such as gas. and therefore when comparing against the baseline it is assumed that only half of the nominal battery capacity is used. This is multiplied by the number of hours in which the BESS asset was operational in the service and then multiplied against the average operational margin grid carbon intensity. The baseline calculation is  Gresham House GRID Annual Report 2024 49 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Risk and ## S.172reporting Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Principal risks and uncertainties ### Risk management approach The Company recognises that active risk management is critical to enable it to meet its strategic objectives. The Company has a clear framework for identifying and managing risk, at  changing environment in which the Company operates. The impact of emerging risks on the Company’s business model are also considered and used to make informed decisions,  the underlying investments), based on their impact and/or likelihood. ### Existing risks in detail Risk area Gross impact Mitigation Net impact Operational and performance The BESS investments do not perform in the The Company has ensured that assets are The Investment Manager has substantial risk in the underlying manner expected or are not optimised in the  experience managing BESS assets and works investments leading to loss best commercial manner to capture revenue for new investments is considered to ensure with leading asset optimisers to ensure assets ofvalue. streams which could lead to reduction in  are designed and operated as expected. valuations.  Each investment is subject to commissioning Health and safety performance is rigorously Performance within the SPVs may not meet testing to ensure all relevant planning and tested and reviewed.   planning or safety requirements and result HSE conditions are met. Fire risk is carefully   Performance of the Company’s BESS in curtailment of operations and loss of assessed and sites are designed and operated investments has been impacted by market   investment value. to ensure this risk is as low as practicable. issues. A key focus of the Company is to The portfolio relies on contracts with suppliers Cyber security risk is managed via secure improve utilisation of BESS and the economic  systems used by optimisation partners. performance of these assets. suppliers may fail to provide adequate support. The portfolio has a number of alternative Tolling agreements have been implemented on Poor market conditions create lower volatility suppliers and optimisers to manage risk. a large portion of the portfolio. These reduce and ancillary services saturation creates lower  The portfolio relies on multiple income revenue streams. with the Company.  In 2025 the Company is continuing contractual The Investment Manager works with industry discussions to both capture upside and groups and engages with NESO to ensure  BESS opportunities are maximised. Gresham House GRID Annual Report 2024 51 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Principal risks and uncertainties Risk area Gross impact Mitigation Net impact | Dividend policy is not | Uncertainty in the level of dividend | The banking covenants have been amended | Shareholder reaction and feedback is | | --- | --- | --- | --- | | in accordance with | distributions undermines shareholder | and restated and a new dividend policy is | continually reviewed. | | shareholders’ expectations. |  | planned to be announced in 2025. | | The Company remains fully asset backed. price and ability to access capital.  Two key elements are required to achieve Revenues are expected to recover with  improvements to NESO systems and   contractual revenues and a corresponding development of other contractual revenue   relaxation of banking covenants. opportunities.   The dividend will be dependent on revenue This will allow dividends to resume in due  course. It is expected that at a minimum the  Company will make a distribution to meet Investment Trust Company regulations. Financing risk of existing  The Company does not have any unfunded As debt is drawn the Company enters into investments and availability pipeline due to poor short-term revenue commitments. The debt facility has been interest rate hedging instruments to manage offuture growth capital. forecasts and substantial NAV discount amended and restated to enable the this risk. preventing equity fund raises. completion of the current pipeline projects  The revenue environment has stabilised and and planned extensions.  the risk in relation to the debt covenants is low.   non-payment of dividends and default. The banking covenants have been carefully   However, the Company aspires to continue modelled by the Manager to ensure they are The Company’s investments are subject to to grow additional BESS capacity and has   achievable within the amended and restated banking covenants which have been amended been seeking contractual revenue systems to debt facility agreement. These are monitored and restated in early 2024.  regularly. Performance and availability  The existing construction pipeline has grid This risk has decreased to low on a forward- of grid connections and their commissioning timescales. connection certainty. looking basis. impact on future project  Whilst there has been an ongoing impact of commissioning dates causing portfolio to generate project revenues to delays in 2024 which has meant additional delay to investment revenues deliver earnings to pay dividends on the capacity has been delayed, the programme is and earnings. timescales expected by the markets. now almost complete and therefore the impact  on the remaining grid connections is low. New for 2025 is the risk of grid connections   | | queue reform. This has already “paused” | The Company agrees that grid connections | | --- | --- | --- | |   | new applications since 29 January 2025 and | queue reform needs to take place to cleanse | | | has the potential to disrupt existing pipeline | grid capacity and provide a better landscape |   projects. for developers. However, this needs to be a robust and quick process to avoid disruption. Gresham House GRID Annual Report 2024 52 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Principal risks and uncertainties Risk area Gross impact Mitigation Net impact Great Britain assets are based Adverse changes by NESO in relation to The Company’s investments enjoy several BESS projects are versatile assets and can on a business model which   perform a variety of roles to manage risk. relies on certain revenue Capacity Payments, TRIADs and DC as a) NESO moving away from their “Net Zero” Projects have the potential to “revenue stack” streams sourced from contracted services to National Grid; the ambition (e.g. utilising thermal plant rather and gain multiple revenue streams from National Grid mechanisms and Company’s investments are able to select than BESS) may reduce the size/scope  resulting from overall rollout which services to provide on any given time of income-earning opportunities to the of intermittent renewables.  The income stream opportunities and usage Company’s investments and have potential the Investment Manager and optimisation of BESS are expected to evolve over time. impact on valuation; or  partners. b) NESO not utilising available assets However, NESO’s progress is being carefully    NESO has been slow to utilise BESS capacity monitored and managed; restoring appropriate   electricity market; or and this has created revenue streams for usage of BESS by NESO is a key management   legacy fossil assets at the expense of BESS. focus with encouraging results in H2 2024. c) HM Government’s Energy Strategy moves away from intermittent renewable assets However, NESO began to make progressive The ability to enter into further tolling which create revenue opportunities for changes in early 2024 to ensure BESS will form arrangements and other contractual revenue BESS and instead move to other strategies an integral part of transforming the electricity streams allows the Company to lock in which impact on BESS future growth. sector in the UK. revenue streams and mitigate risk. The Investment Manager works with industry Any of the above may impact on the revenues groups and engages with NESO to ensure available to BESS on Great Britain’s grid. BESS opportunities are maximised.  this allows a certain level of income to be locked in – this is a major mitigant. Geographic risk.  Over time, the international exposure of the In the short term the portfolio will remain GB there is a concentration risk and over-reliance Company will be increased and the portfolio dominated. As GB is currently experiencing  on the GB market.     relationships and opportunities are in place. Overseas expansion plans are available but no   investments will take place in the short term.   This risk therefore remains high. Gresham House GRID Annual Report 2024 53 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Principal risks and uncertainties Risk area Gross impact Mitigation Net impact Valuation risk. The Company’s investments are valued using Risk-adjusted discount rates drive valuation Compared to market peers the risk is deemed  along with the external pricing curves. to be low when the discount rates are  future income streams driven by third-party considered/compared. The Company utilises a modelling   power curves. These valuations may be methodology which discounts income The risk remains at medium as third-party   materially incorrect or not held at fair value. streams using discount rates appropriate to    The Company’s investments are impaired the perceived risks. marketplace but the resulting valuations lack  market comparable transactions to validate. The weighted average discount rates are expected or costs are higher than expected. reviewed regularly. A third-party valuer reviews   upon these valuations. Availability of batteries and Inability of the Company to deploy capital The Company’s construction projects and The Company’s portfolio has acquired other key components. raised into investments due to incomplete or augmentations are being completed in the batteries and key components to build out the lengthening project timescales. next six months and are not reliant on the existing funded pipeline.  acquisition of additional components. Price increases for components making    investments less attractive and impacting on    overall returns. make Chinese BESS accessible and provide   improving economics. Reliance on the Investment The Company relies on the Investment The Company has long-term contractual The Investment Manager remains incentivised Manager. Manager and “key persons” as a mission arrangements in place with the Investment to continue to grow the Company and drive critical supplier.  value through the changes to the Investment  of the Company is one of its key focus areas. Manager fee arrangements.   The Investment Manager has built out a large   team of experts which reduces “key people” risks.   Tax compliance. The Company is registered as an Investment The Investment Manager undertakes In order to ensure continued compliance in Trust and must comply with certain tests. the relevant tests each quarter and the a low revenue environment the Company  Company’s tax advisors review this regularly. capitalised the loan with MidCo on 15 March   2024.   It is expected that at a minimum the Company   will make a distribution to meet ITC regulatory requirements. Gresham House GRID Annual Report 2024 54 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Principal risks and uncertainties Risk area Gross impact Mitigation Net impact Environmental, Social and BESS are manufactured, installed and The supply for battery manufacture relies Some aspects of this are still evolving over Governance: production operated with the intention of driving the on high-quality global partners who ensure time, especially the end use/recycling of BESS. and recycling of batteries transformation to a low carbon energy supply their supply chain does not involve the use The ability of BESS to drive a low-carbon createsrisk. in the UK. of illegally or unethically sourced “rare earth” electricity system needs to be considered in materials or inadequate labour standards.  However, the lifecycle ESG impact of the comparison to other options when considering batteries needs to be considered and The Company undertook a supply chain review the overall ESG impact of BESS. Work will   minimised. in 2022. continue to minimise this over time.   The recycling of the BESS systems remains   subject to constant development and research. The Company is motivated to ensure low environmental impact. This is an industry- wide focus and the residual value of materials remains high and there is likely to be value from recycling of materials in future. ### Emerging risks Risk area Gross impact Mitigation Net impact | Emerging technology | The Company invests in battery storage | The Company utilises proven technologies |  | | --- | --- | --- | --- | | replaces battery energy |  | with associated Tier 1 supplier warranties and | costs and the valuation model assumes | | storage assets. | might adversely impact on the Company’s | performance guarantees. | continuing cost reductions for replacement | | | investments. | | assets over time. | |  | | The Company continues to review available | | | | Future income streams may be reduced if | technologies. It is currently viewed as unlikely | Due to lower battery pricing there is increasing |    that a completely new reliable and cost- opportunity for BESS to compete in longer   costs. competitive technology will appear during duration storage opportunities and replace/   the lifetime of these batteries and impact the augment existing technologies. lifecycle of these batteries. Geopolitical risk of potential Disruption of the supply chain of crucial The Company has relationships with other The Company ensures it is securing key equipment shortages as equipment. non-Chinese suppliers, but they are likely to equipment orders in advance. China is subject to US taris. source components from China. The current funded pipeline has secured   appropriate equipment. the UK BESS market.   Future pipeline has opportunities to exploit   better economics.   Gresham House GRID Annual Report 2024 55 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## S.172 reporting ### Shareholders The Company will require further funding to continue the requirements of the investment strategy and complete construction of the portfolio assets. As such, existing and prospective equity investors are vitally important stakeholders. Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 Through our The Company engaged with the stakeholder group in The Company has developed a strong The engagement activities of GRID engagement activities,    we strive to obtain support the Company in its ambitions  Interim and full-year accounts.  Discussions with shareholders during investor buy-in into our notwithstanding the current market and since the AGM.  The Company’s Corporate Brokers and Investment strategic objectives and  Manager are in regular communication with  Webinars around the Annual Report.  shareholders and shareholder views are reported to A share buyback programme commenced  Market announcements. the Board on at least a quarterly basis. Since IPO, the Company in Q1 2024.  Annual and Interim Reports.   The Company’s Corporate Brokers set up direct calls  Site visit (8 October 2024). number of shares to between investors and the Board members. allow the Company to  A webinar/Capital Markets Day  The Chair and the Board members have meet the investment  made themselves available to engage in strategy of the discussions around issues of governance and  Following the year end the Company Company. overall performance. announced the appointment of Peel Hunt LLP as Joint Corporate Broker to the Company,  One-to-one meetings with the Investment Manager.   Regular news and quarterly NAV updates. ### Lenders The Company will require further funding to continue the requirements of the investment strategy and complete construction of the portfolio assets. Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 | Through constructive | The Company engaged with the stakeholder group in | The Manager, with oversight from the Board, | The engagement activities of GRID | | --- | --- | --- | --- | | engagement, the |  | has renegotiated the debt facility held by |  | | Company strives to | | the Company’s wholly owned subsidiary to | | | |  Regular meetings to amend and restate debt | |  Regular meetings in Q1 2024. | | maintain a healthy | | align covenant levels with current market | |   Successful negotiations led to revised relationship with environment in Q1 2024. conditions and resized the debt facility. debt agreement. lenders.  Continued communication to ensure the completion of the construction programme in 2024. Gresham House GRID Annual Report 2024 56 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review S.172 repor ting ### Investment Manager   Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 | Constructive | The Company, supported by its Management | The Company and Investment Manager have | During 2024, the Board held a number of | | --- | --- | --- | --- | | engagement with the | Engagement Committee and a board adviser, | aligned interests to ensure the future success of | meetings with the Investment Manager to | | Investment Manager | conducts both ongoing reviews and an | the Company. |  | | is important in order | annual review of the Investment Manager’s | | |  Consideration of pipeline acquisitions/ The Investment Manager sees the growth of the to ensure that the performance and the terms of engagement of disposals/augmentation Company as both a key element of its strategy expectations of the     shareholders are being The Board and the Investment Manager maintain strategy of the Investment Manager.  Tolling arrangements met, and that the Board an ongoing open dialogue on key issues facing is aware of challenges  Share buyback programme The Board and the Investment Manager also the Company with a view to ensuring that being faced by the discussed and revisited governance and  Terms and remuneration under the Investment key decisions such as investment decisions, Investment Manager. resourcing arrangements going forward as the Management Agreement, which led to a the Investment Manager’s capabilities and Company’s number of investments grows.  resourcing, trading partner performance in the end aligning the interests of the Manager SPVs and the Company’s strategy are aligned and shareholders with achieving long-term shareholder value. The Board has also engaged an independent board adviser that acts as an interface between the Board and the Investment Manager to help review, test and challenge the reporting and  Manager. The Board discussed the linkage of the management fee to the Company’s NAV with the Investment Manager. This open dialogue takes the form of a number of ad hoc Board meetings, as discussed in the Corporate Governance Report, and more informal contact, as appropriate to the  Gresham House GRID Annual Report 2024 57 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review S.172 repor ting ### Business partners and key service providers The Company has various key service providers who provide management services. Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 The intention of the The Company, supported by its Management The Company has ensured that the interests Through the Management Engagement Company is to maintain Engagement Committee, reviews all key service of key service providers are aligned Committee, the Board conducts annual reviews long-term and high- providers to the Company and the terms of their with the Company. of the key service providers. quality business engagement. During the year, the Company The support of the Company’s key service As a result, the Board made improvements in partnerships to ensure conducted a review of the terms of all service providers was also fundamental in the the management fee structure and its corporate stability while the provider engagements along with their fee levels successful completion of the Company’s debt  Company pursues its to ensure appropriate levels of support to the  after the year end. growth strategy. Company during the year. share buyback and tolling arrangement. The Company seeks two-way engagement between the Board and key service providers on service delivery expectations and feedback on important issues experienced by service providers during the year. The intention of the Company is to maintain long-term and high- quality business partnerships to ensure stability while the Company pursues its growth strategy. ### Communities The Company proactively engages with the communities within which it operates. Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 | To educate the | During construction of investment projects, | The key topic is GRID’s role contributing | The Board continued to monitor the Investment | | --- | --- | --- | --- | | public on the role of | the Investment Manager ensures all relevant | to the UK’s target of decarbonising the | Manager’s adoption of its ESG decision | | BESS in the UK’s | planning and construction conditions are met. | economy by 2050, through investment and | tool, which takes into account the impact | | decarbonisation | In addition, the Investment Manager remains | deployment of BESS. | of investment decisions on surrounding | | ambitions. | committed to proactively engaging with the | | communities and the importance of engaging | | | communities within which the Company | | with those communities. | operates. The Investment Manager is part of the More direct engagement with communities is Gresham House Limited group and is focused on recommended, in order to continue to educate a sustainability agenda. the public on the role of BESS in the UK’s decarbonisation targets. Gresham House GRID Annual Report 2024 58 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Governance Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Board of Directors ### The Company has a Isabel Liu Duncan Neale Catherine Pitt ### Board of ve Independent (Chair of the Management (Audit Committee (Chair of the Nomination Engagement Committee Chair and Independent Committee and Independent ### Non-Executive Directors. and Independent Non-Executive Director) Non-Executive Director) Non-Executive Director) Duncan is a CFO and Finance Director Cathy is a legal adviser who has ### John Leggate | | Isabel has over 25 years’ global experience | with over 20 years of commercial | specialised in the investment company | | --- | --- | --- | --- | | CBE, FREng | investing equity in infrastructure, including | experience working for both publicly | and asset management sectors for over | | | the AIG Asian Infrastructure Fund, the ABN | listed and privately owned companies. | 20 years, specialising in governance, | (Chair and Independent AMRO Global Infrastructure Fund and Duncan is a Fellow of the Institute of regulation and capital markets. Cathy was Non-Executive Director)   appointed to the Board on 1 March 2019. investment business of John Laing plc. with Price Waterhouse in London. John is highly experienced as a global The Board considers that Cathy’s legal Isabel served as a non-executive director Duncan was appointed to the Board on energy sector executive and senior expertise, transaction experience and of Pensions Infrastructure Platform, 24 August 2018. adviser on the energy transition and knowledge of the investment trust backed by UK pension schemes to invest the commercialisation of advanced The Board considers that Duncan’s sector, as well as her work as Chair of the in UK infrastructure. She has been a board   Nomination Committee, enable her to member of Transport Focus, the consumer experience and is currently on the Board experience working as an FD and CFO  watchdog for public transport and England’s  in the energy sector, as well as his work and governance enhancement, both of highways, and Heathrow Airport’s Consumer Washington DC, Chair of WizeCap Ltd and as Chair of the Audit Committee, enable which are important to the Company’s Challenge Board. Isabel was appointed to is a senior adviser in the energy sector to  long-term sustainable success. the Board on 1 October 2022. “blue chip” international consultants and discussions covering valuation, the | senior adviser to Dial Partners (Dubai). | | |  | | --- | --- | --- | --- | | | The Board considers that Isabel’s | performance of the fund and risk, which | | | John was appointed to the Board on | | | non-executive director of Baillie | | | extensive experience in all phases of direct | together aid the long-term success | | | 24 August 2018. | | |  | | | investment in infrastructure including | of the Company. | | Association of Investment Companies renewable energy in the UK and around The Board considers that John’s breadth  and a member of the Advisory Council the world, as well as her work as Chair of of board experience brings a positive of DJN Consultancy Limited, and a  the Management Engagement Committee, view of engaging with, and responding non-executive director of AFC Energy plc. limited by guarantee.  to, changing market dynamics. John Board discussions on project resourcing is highly motivated to deliver value to  all stakeholders and thus contributes and governance, and thus to contribute to the long-term sustainable success  of the Company. sustainable success.   Global Integrity, Inc (US), Chair of WizeCap Schroder Oriental Income Fund Limited Limited and Flamant Technologies Limited. and Utilico Emerging Markets Trust plc. Gresham House GRID Annual Report 2024 60 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Board of Directors ### David Stevenson (Chair of the Remuneration Committee and Senior Independent Non-Executive Director)  commentator for a number of leading publications including The Financial Times (the Adventurous Investor), Citywire, and MoneyWeek. He is also the founder of www.etfstream.com, the leading source of ETF analysis in Europe. David was appointed to the Board on 24 August 2018. The Board considers that David’s knowledge of the investment industry, and experience of communicating with the end investor through various marketing and communications channels, as well as his work as Chair of the Remuneration Committee – and his work with other boards – enables him to contribute  and to the Company’s long-term sustainable success.  of Castelnau Group Limited, the Secured Income Fund plc, Aurora Investment Trust plc and Workspace plc. Gresham House GRID Annual Report 2024 61 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## The Manager’s team | The Head of Operations also oversees | Ben started his fund management career | | --- | --- | | the data science team, who ensures the | in equities at Lazard Asset Management | | Manager has accurate live data readings | in 1994 before going on to co-found | | across all assets and runs predictive | Cantillon Capital and later founded Hazel | | modelling and real-world simulations | Capital in 2007, a renewable energy- | | to identify new ways to earn money | focused fund management business. Ben | | with our assets. | currently serves as a director of all of the | Company’s project companies.  function oversees the Company’s accounting and the production of ### James Bustin underlying portfolio SPV accounts, as well (Associate Director, as monitoring regulatory requirements. Energy Transition) James has 11 years of experience across ### The Manager’s team consists The Construction team includes a ### Ben Guest  Head of Construction, an EPC Director ### of a Lead Fund Manager and (Managing Director, joined the team in 2019 having previously and supporting Project Managers. Energy Transition) ### Assistant Fund Manager and worked on public equities and venture This team focuses on all aspects of capital in the Gresham House Ventures ### three other teams who manage constructing new sites and augmenting Ben was the founder and managing team. As Assistant Fund Manager for the existing projects and contains ### the BESS projects throughout partner of Hazel Capital which was Company, he covers all elements across  acquired by Gresham House in 2017. He ### their lifecycle. fund management including strategy, connections expertise. has 30 years of investment experience. funding, modelling and new investments. Ben’s expertise spans the investment The Operations team is led by the Head of  spectrum, across infrastructure, listed James joined Gresham House in 2018 as Operations, with the team split between Development; Construction; and equities and venture capital. part of the acquisition of Livingbridge VC commercial and technical operations, Operations. The Manager employs a where he had been working as an analyst with experienced asset managers in total of 24 full-time equivalent employees Ben is Managing Director of Gresham since 2016. Prior to Livingbridge, James each. The commercial operations team to work on GRID. House’s Energy Transition Division and worked in TMT audit at EY for 3 years, works to maximise revenues and reduce the Lead Fund Manager of the Company. The Investments & Project Development qualifying as a Chartered Accountant. operating costs across the portfolio. This He is responsible for the origination and team is working to develop both UK and includes looking for new revenue sources execution of investment opportunities international projects. A UK Investment and monitoring markets for opportunities and for the overall strategy and ongoing Director and an International Investment to enhance performance. The technical portfolio management of the Company. Director are supported by the wider asset managers focus on availability, or investment team. The Manager’s uptime, ensuring our assets are delivering development capability continues to their full potential. provide us with a substantial project pipeline on very competitive terms. Gresham House GRID Annual Report 2024 62 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review The Manager’s team ### Harry Hutchinson Fernando Casa Garcia (Investment Associate, (Head of Operations and Energy Transition) Asset Management, Energy Transition) Harry joined Gresham House in April 2023. | Prior to joining Gresham House, Harry | Fernando has 15 years of experience in | | --- | --- | | worked as an Auditor at Grant Thornton | the renewable energy sector, mostly in | | for three years, focusing primarily on | solar PV. Since joining the team in May | | technology and media businesses. | 2021, Fernando has been focused on the | design, development and deployment of  processes and procedures that allow the in Chemistry from the University of Oxford growth in MWs under management and  improvement in operational performance. September 2022. Prior to Gresham House, Fernando was Global Head of Technical for a 2.2 GW solar ### Charlie von Schmeider PV portfolio at WiseEnergy focused on the operation of their solar PV assets and (Director of UK and Irish increasing overall revenues. Project Development, Energy Transition) Charlie has over 20 years of experience having started his career as a solicitor before moving to investment management for the past nine years. Managing Director, Energy Transition Fund Manager, GRID Charlie has extensive experience in the development, funding and asset management of distributed energy Associate Director, UK & Ireland Devco International Devco infrastructure projects and has worked Head of Construction Head of Operations Senior Team Assistant Assistant Fund Manager Investment Director Investment Director on a wide range of technologies including solar PV, hydroelectric, anaerobic Investment Associate Investment Manager Investment Manager Investment Manager EPC Director Team Assistant digestion, thermal heat networks, gas peaking and battery energy storage. Project Manager Project Manager Intern Charlie’s current role began in February 2021. He is responsible for executing investments in BESS projects, whether acquired before Senior Assoc. Senior Assoc. Commercial Technical Asset Technical Asset Senior construction or when already operational. Commercial Commercial Technical Technical Asset Data Scientist Asset Manager Manager Manager Data Scientist Asset Manager Asset Manager Asset Manager Manager Centralised nance function. Gresham House GRID Annual Report 2024 63 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Three FTEs are dedicated to GRID The Manager’s team | | | | | Prior to this, Stephen worked at E.ON from | He has over 30 years of experience | | --- | --- | --- | --- | --- | --- | | | Ana Segizbayeva | | Paul Carse | | | | | | | |  | in asset management and wealth | | | (Head of Construction, | | (EPC Director, | | | | | | | | and commercial roles, ranging from | management, focused on product | | | Energy Transition) | | Energy Transition) | | | | | | | |  | innovation, investment management, | | | | | | power station projects, M&A transactions | business development, banking and | | Ana joined Gresham House in September | | In February 2024, Paul became part of | | | | | | | | | and working with HM Government | wealth structuring. He is a member of the | | 2022 and is responsible for implementing | | Gresham House, taking on the role of EPC | | | | | | | | | delivering low carbon solutions. | Gresham House Group Management and | | the EPCM (Engineering, Procurement and | | (Engineering, Procurement and Construction) | | | | Investment Committees. Construction Management) structure and Director in the Energy Transition division. delivering the Energy Transition team’s ### With 14 years of experience in the HV/ Nick Vest project pipeline. ### renewable sector, Paul has held key Lefteris Strakosias (Finance Director, Ana is a multi-skilled professional positions such as Head of Project Energy Transition) (Investment Director,  Delivery at a developer and Head of Major Energy Transition) innovative, award-winning renewable Projects at a prominent ICP (Independent Nick joined Gresham House in January Connection Provider). His journey began energy projects in the UK. 2021. He has over 20 years of accounting Lefteris joined Gresham House in March at National Grid, where he completed an | | |  | 2023 and has over 15 years of experience | | --- | --- | --- | --- | | Previously, Ana helped to establish | extensive training programme. | | | | | | Accountant and Chartered Tax Adviser. | in infrastructure and energy transition | quality management, project delivery, and investments including solar PV, onshore Throughout his career, Paul has been commercial project functions at GRIDSERVE Prior to Gresham House, Nick worked as  involved in various renewable energy Sustainable Energy. She also successfully Finance Director for an internationally and hydroelectric power. He has held projects, spanning BESS, solar, wind and  focused property investment group and principal investment and advisory anaerobic digestion. Additionally, he holds and subsidy-free solar and battery storage before that Nick was Associate Director of roles with large institutions such as a degree in Power System Engineering, hybrid projects with bi-facial panels and Tax at Temenos Group SA in Switzerland. Columbia Threadneedle Investments,  tracking technology. Prior to that, Ana National Pension Service of South Korea was part of the BELECTRIC projects team Macquarie, and Société Générale, as well building utility-scale solar farms. ### Rupert Robinson as corporate and business development ### Stephen Beck roles with Libra Group and Maple Power. (Managing Director, (Finance Director, Gresham House Asset Real Assets) Lefteris holds a MSc in Finance from Management Limited) Imperial College London and a BSc in Stephen joined FIM Services Limited in Management Science from Athens Rupert has been the Managing Director of 2013 and joined Gresham House when FIM University of Economics and Business. Gresham House Asset Management Limited Services Limited was acquired in 2018. He since September 2015. Before joining has 28 years of industry experience and Gresham House, Rupert was CEO and CIO is a law graduate and Barrister and was of Schroders (UK) Private Bank for 11 years called to the Bar in 1996. He is also a Fellow and prior to that spent 17 years at Rothschild of the Institute of Charted Accountants |  | where he was latterly Head of Private Clients | | --- | --- | | PricewaterhouseCoopers in 1999. | at Rothschild Asset Management. | |  | Rupert has a proven track record of | | managing BESS, Renewables, Forestry and |  | Sustainable Infrastructure sectors. Gresham House GRID Annual Report 2024 64 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Corporate governance report As Chair of the Board, I am  The Board, supported by its Company In addition to our normal quarterly Board with the Principles and Provisions of the AIC Secretary, operates under a robust meetings, we held 29 ad hoc Board ### pleased to present the Corporate Code. The AIC Code is available on the AIC corporate governance framework and meetings throughout the year to discuss ### Governance Report for the year | | website (www.theaic.co.uk) and includes an | ensures that high standards of corporate | topics such as capital allocation, tolling | | --- | --- | --- | --- | | ended 31 December 2024. | explanation of how it adapts the Principles | governance are applied across all of its | contracts, dividends and dividend policy, | | | and Provisions of the UK Code to make them | processes and decision making. |  | | | relevant for investment companies. | | year business plan. We had focused | The purpose of this report is to summarise At the Company’s quarterly Board meetings,  our corporate governance framework  Investment Manager and encouraged and to explain how we, as a Board, have constructive engagement on key issues  ### Board composition  Update from the Investment throughout the year. corporate governance is fundamental to  GRID’s operations and to the generation As the Board, we have recognised the – Investment portfolio commentary Typically, there was attendance by the of consistent, long-term value for importance of diversity as an essential full Board at all quarterly Board Meetings – Trading data and investment our shareholders.  and overall attendance was in line with the performance, by month The Board has 40% female representation requirements of the AIC Code. and one Board member from a minority –   model, including any updates to Further, we, as a Board, periodically ### Corporate Governance UK Listing Rules). The Chair of the key assumptions  Nomination Committee has considered – Risk management and risk mitigation, values and strategy. The Board, through ### Code the composition of the Board in her including climate change and ESG risks our committees, assess and monitor During the year, the Board considered succession plan, more details of which can the Board and key advisers’ culture – Review of any recommendations the Principles and Provisions of the AIC be found in the Nomination Committee and behaviours to ensure that these made by the Investment Manager Corporate Governance Code (the “AIC report on page 70. are supportive of and aligned to the Code”). The AIC Code addresses the Company’s purpose, values and strategy.  Update from the Company’s Principles and Provisions set out in the  UK Corporate Governance Code (the “UK – Market commentary ### The role and operation Code”) and includes additional Provisions ### Purpose – Share price performance against the  ### of the Board Company’s peers House Energy Storage Fund plc. The Board and I see the Company’s Our role, as the Board, is to lead the – Sales and trading commentary purpose to deliver performance for I believe that reporting against the Company in promoting its long- investors through investment in BESS. Principles and Provisions of the AIC Code,  Report from the Company’s Depositary term success and generating value The Board seeks to do this by providing which has been endorsed by the Financial for shareholders. support, constructive challenge and Reporting Council, the Guernsey Financial  Report from the Administrator and governance in its working relationship with Services Commission, and supported by  the Investment Manager. the Jersey Financial Services Commission, – Compliance monitoring provides more relevant information to – Regulatory and governance updates our shareholders. Gresham House GRID Annual Report 2024 65 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Corporate governance report ### Values  Leads the Board in setting its agenda, The asset management role encompasses ### Matters reserved for  the oversight of all operational and ### The Board values integrity, transparency, and operational performance and the Board   establishing the risk appetite. managing all operational contracts, We have a formal schedule of matters from a variety of talents in the best managing all health and safety operational  Organises the business of the Board,  interests of the Company. risks, advising us on the monthly and  which includes, but is not limited quarterly asset/portfolio performance,  to, considering proposals from the managing power price/market exposure, system of internal controls. Investment Manager, making decisions ### Strategy and progress with the asset pipeline. concerning the acquisition or disposal of The Investment Manager also reports  investments, and reviewing the terms of  ### Role of the Senior engagement of all third-party advisers portfolio of utility-scale battery energy requiring our approval before ### storage systems with the aim of Independent Director (including the Investment Manager) and undertaking transactions. maximising risk-adjusted total returns for the appointment and removal of the  To provide a sounding board for the investors through income and growth. Company Secretary. The Company has a business relationship Chair and serves as an intermediary for with Gresham House DevCo Limited, the other Directors and shareholders. We have established procedures whereby a related party of the Investment any Director, wishing to do so in the ### Culture  To lead the appraisal of the Chair’s  furtherance of their duties, may take performance with the other Non- independent professional advice at the  sources, performs due diligence on, The Board has a culture of openness, Executive Directors. Company’s expense. and acquires pipeline projects on a engagement and challenge. speculative basis exclusively for the All Directors, including myself, have access Company to ensure our ability to ### Role of the Non-Executive to the advice and services of the Company grow in a burgeoning market with few ### How the Board operates Directors Secretary. The Company Secretary operational projects; provides us with all relevant information  manages these projects through We, as the Board, meet regularly  Provide constructive challenge, requested by the Chair in advance of each construction; throughout the year, with set strategic guidance and hold Board meeting, advises us on governance responsibilities for myself, as Chair, the management to account.  sells projects to the Company; and matters, and ensures we continue to Senior Independent Director and Non- adhere to our Directors’ duties.  Scrutinise the performance of the  takes development risk on our behalf, Executive Directors. Investment Manager. where our investment mandate prevents There is a clear division of responsibilities us from taking this risk.  Seek assurance on the integrity of between the Board and the Investment  Manager. Under the AIFM Agreement, ### Responsibilities of the Chair The Management Engagement Committee  the Investment Manager acts as the reviews the Investment Manager’s systems of risk management are robust  Leads the Board and is responsible discretionary investment manager and performance annually, along with its and defensible.  AIFM to the Company within the strategic adherence to the terms of the AIFM directing the Company.   guidelines set out in the Investment Policy,  their Board responsibilities. subject to our overall supervision.  Leads the Board in its oversight of the interest. Further details are contained in Company’s purpose, values and culture. the Management Engagement Committee report on page 74. Gresham House GRID Annual Report 2024 66 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Corporate governance report ### Board committees  the Company are independent and non-executive and serve on all committees. Quarterly Board Audit Management Nomination Remuneration meetings Committee Engagement Committee Committee Committee (4 held) (5 held) (2 held) (1 held) (1 held) John Leggate 4 5 2 1 1 Duncan Neale 4 5 2 1 1 Catherine Pitt 4 5 2 1 1 David Stevenson 4 5 1 1 1 Isabel Liu 4 4 2 1 1 | Remuneration | Shareholder engagement | | --- | --- | | The Board and I are committed to | During the year, the Board held the | | implementing remuneration policies and | Company’s Annual General Meeting, | | practices that support our strategy and | Capital Markets Day and a site visit. | | promote long-term sustainable success. | We were pleased with the engagement | | Details of this policy can be found in | we had with shareholders at these | | the Directors’ remuneration report on | events. As the Board, we welcomed the | | pages 76 to 80. | constructive input from shareholders, | both institutional and retail, on the Company’s future strategy. ### Timeline of shareholder ### engagement  2 February 2024 – Announcement of  20 June 2024 – Annual General Meeting  8 October 2024 – Enderby Battery share buyback programme Storage site visit  9 September 2024 – H1 2024  29 April 2024 – Announcement of annual trading update  27 November 2024 – Capital results and presentation webcast Markets Day  30 September 2024 – Interim  5 June 2024 – tolling results announcement and agreement announcement presentation webcast Gresham House GRID Annual Report 2024 67 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Corporate governance report ### Substantial interests  being 573,444,694 Ordinary Shares. | | | Number of | | Percentage of | | | | | | Number of | | Percentage of | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Ordinary | | | issued share | | | Ordinary Shares | | | | | issued share | | | Shares as at | | | | capital as at | | | | | | as at | | capital as at | | | 31December | | | 31December | | | Shareholder | | 22 April 2025 | | | 22 April 2025 | | | Shareholder | | | 2024 | | | 2024 | | | | | | | | BlackRock Investment Mgt - Index (London) 54,491,070 9.58% BlackRock Investment Mgt – Index (London) 54,491,070 9.58% Gresham House (London) 49,586,967 8.71% Gresham House (London) 49,586,967 8.71% Schroder Investment Mgt (London) 42,878,852 7. 54% Schroder Investment Mgt (London) 42,878,852 7. 54% UBS Securities (London) 25,391,362 4.46% Sarasin & Partners (London) 24,823,884 4.36% Hargreaves Lansdown Asset Mgt (Bristol) 24,754,988 4.35% Hargreaves Lansdown Asset Mgt (Bristol) 21,955,660 3.86% Sarasin & Partners (London) 22,675,285 3.98% Gravis Capital Mgt (London) 21,444,510 3.77% West Yorkshire Pension Fund (Bradford) 20,717,405 3.64% BlackRock Investment Mgt (London) 17,766,034 3.12% Gravis Capital Mgt (London) 20,660,899 3.63% The Directors’ interests in the Ordinary Share capital of the Company are disclosed in the Directors’ remuneration report on page 78. ### Board activities ### and stakeholder ### considerations The Board is conscious of its duty to seek out and consider a broad spectrum of stakeholders’ views in decision-making. We believe that maintaining the long-term future of the Company is dependent on strong stakeholder relationships, and as the Board, we are committed to nurturing these connections. The Section 172 report can be found on pages 56 to 58. Gresham House GRID Annual Report 2024 68 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Corporate governance report ### Board performance Topics covered in performance review Findings from the 2024 review ### review Strategic oversight by  In accordance with the AIC Code, the Board the Board  conducted an annual assessment of its own been limited. The Board and management are taking steps to stabilise revenue and deleverage, such as performance, that of its committees and potential asset sales and a new tolling agreement with Octopus. the Chair. The Board performance review Supervision of Directors receive high-quality information from management coupled with valuable analysis process operates on a three-year cycle. This investment activities from independent adviser Charles Conner. The Board and management have a strong and year, the performance review was conducted collaborative relationship. by an independent, external consultant, Trust Oversight of risk The Board has a strong focus on risk assessment and management, with improved risk reporting thanks to Associates. Trust Associates conducted the a dynamic representation of risk, which has enhanced Board discussions. Despite this, communication can Company’s last externally facilitated Board be improved between the investment team and the risk reporting process with suggestions to scrutinise evaluation in 2021. the robustness of risk management systems further, including potentially engaging with the Investment We considered three proposals from Manager’s internal risk team for additional insights.  Shareholder The Board is focused on ensuring the best outcomes for investors, with the Chair actively engaging following due consideration, determined that accountability shareholders to discuss key topics such as share price and NAV. Some shareholders need clearer Trust Associates possessed the requisite communication about the risks and issues facing their investment, including the volatility of the battery experience to conduct the Board evaluation. market and the Company’s valuation assumptions. It was also advantageous to have Trust Board composition The Board is engaged and dedicated, leveraging a wide range of expertise and advisory input to challenge Associates reassess the Board after three and process the Manager constructively. On a forward-looking basis, the Board has reviewed its capability requirement years to provide its assessment of the and will take appropriate measures.   Committee structure,  composition Auditor. The Management Engagement Committee requires more time due to delving into strategic issues. Trust Associates conducted a series   of in-person meetings to discuss functions well and has begun succession planning. the performance of the Board Governance Directors have a strong governance focus and the ability to independently challenge the Investment Manager, and the Company with the Non- aided by governance updates from the Company Secretary. The Board actively addresses market abuse Executive Directors, apart from David  Stevenson, which was conducted via training budget for ongoing development in areas such as sustainability and accountancy. videoconference. In addition, Trust Associates held discussions regarding | Board performance with the Investment | Recommendations arising from the Board | 2 Further develop a strong governance | | This Corporate Governance Report is | | --- | --- | --- | --- | --- | | Manager, Company Secretary, Solicitors, |  | | framework to enable independent |  | | Brokers, the Auditor, Board consultant and | | | challenge of the Investment Manager | | 1 Request that the Investment Manager key shareholders. and allow for smooth internal processes. implements appropriate resources to  The focus of this external evaluation was During 2025, the Board and I will  ### to conduct a comprehensive assessment monitor our progress against these John Leggate CBE, FREng  recommendations and we will report back Chair of the Board to shareholders in our next Annual Report. 22 April 2025 Gresham House GRID Annual Report 2024 69 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Nomination Committee report As Chair of the Nomination  the Board and both the Nomination As the Chair of the Nomination Committee,  Committee and Management I have sought out proposals from several ### Committee, Iam pleased to the AIC Code, and no circumstances have Engagement Committee are chaired independent and experienced recruitment ### present my report for the | |  | by female Directors, the Chair of | agencies to assist the Company in its search | | --- | --- | --- | --- | | year ended 31 December | could appear to impair, a Non-Executive | the Board and Senior Independent | for a sixth Non-Executive Director. After | | | Director’s independence. Furthermore, all | Director are both male. | a thorough process, the Board formally | ### 2024, which explains the role  approved the appointment of Longwater ### of the Committee and its  Partners Ltd on 6 February 2025. ### work in the period.  ### Succession consider the other current interests of the The Committee met once during the year  The Committee, with the Chair of the ### Diversity and inclusion | and operates within terms of reference | on their ability to discharge their duties | Board, reviews the Board’s succession | | | --- | --- | --- | --- | | aligned with the AIC Code. Meeting | to the Company. | planning, taking into consideration the size | The Committee, along with the Company | | attendance by each member can be | | and composition of the Board, the skills of |  | | found on page 67. | | each Director, the commitment involved |  | | | | in serving on the Board and the tenure | our adoption of a formal Diversity Policy, | ### Directors’ re-election of each Director. which outlines the Company’s approach ### Role and purpose In accordance with the AIC Code, all to and commitment to diversity. The With three members of the Board all | | Directors are required to retire at the | | Committee reviewed the policy during | | --- | --- | --- | --- | | of the Committee | | appointed on 24 August 2018, the | | | |  | | 2024. In the coming year, the Committee | Committee has begun work to ensure themselves for re-election. The Committee will consider appointments to the  an orderly appointment process considers the skills, experience and Board based on merit, in the context of  Lead the appointment process that minimises disruption to Board knowledge of the Directors each year. Each complementing and expanding the skills, performance. It is likely that the size  Ensure an orderly succession plan is in Director’s biographical details on pages60 knowledge and experience of the Board as  place for the Board to 61 a whole (in accordance with the Equality transition period and/or that one or more Board considers that their contribution Act 2010). The current composition of the  Seek to ensure that a diverse range of  is, and continues to be, important to the Board is set out on pages 60 to 61. skills, viewpoints and characteristics is excess of nine years in order to ensure a Company’s long-term sustainable success. represented on the Board smooth succession. This Nomination Committee Report is  The Committee also has a responsibility to The Committee has reviewed and mapped ### support the Chair of the Board in an annual Composition the skills of each Director alongside the  Company’s Three-year Plan and begun to The Board has 40% female representation which was externally facilitated this year. implement a succession plan that seeks to and has one Board member from replace the skills and expertise of Directors ### Cathy Pitt  who are due to retire, while also harnessing in the Listing Rules). Although the Chair of the Nomination Committee ### Directors the growing pool of Board candidates with Board considers chairing of the Board’s BESS expertise. Directors’ biographical details are set out committees as a senior position on 22 April 2025 on pages 60 to 61. Gresham House GRID Annual Report 2024 70 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Audit Committee report ### As Chair of the Audit Committee,  conducting the tender process and Throughout the production process of ### Internal controls and making recommendations to the Board  ### I am pleased to present the Audit ### about the appointment, reappointment Committee, conducted detailed reviews at risk management ### Committee report for the year and removal of the external Auditor, and various stages to ensure consistency and The Committee and I are responsible for ### ended 31 December 2024. My approving the remuneration and terms overall balance. We also scrutinised the compiling this report on our activities and of engagement of the external Auditor;  ### report will explain the role of the  to the Company’s assets and liabilities to   ### Committee and its work this year.  ensure their appropriateness. external audit process, taking into the most recent review conducted in consideration relevant UK professional The Committee meticulously reviewed November 2024. We obtained evidence  and regulatory requirements;  of the internal control frameworks from the year and operated within terms of  to review and monitor the Auditor’s and the judgements made during the the Administrator to aid our review, and reference aligned with the AIC Code. independence and objectivity and the  we also receive quarterly reports from Attendance by each member can be  statements. We considered whether the Company Secretary on any potential found on page 67. the adopted accounting policies internal control failures.  to develop and implement policy were suitable, given the Company’s on the engagement of the Auditor The Committee completed its assessment  to supply non-audit services and of the Company’s emerging and principal ### Role and purpose considering relevant guidance regarding As a result of the Committee’s work, risks, and the details of this assessment ### of the Committee the provision of non-audit services the Board is able to conclude that the are set out in the emerging risks and by the Auditor. Annual Report and Financial Statements principal risks, uncertainties assessment,   and going concern assessment.   taken as a whole, are fair, balanced Additionally, we review the Company’s statements of the Company and any and understandable. They provide risk matrix annually, with the Investment ### Financial statements formal announcements relating to the the necessary information for Manager providing quarterly risk  shareholders to properly assess the reports to the Board. The Committee is tasked with monitoring  Company’s performance, business  reviewing the Company’s internal Although the Board retains ultimate of the Company and ensuring that they model and strategy.  responsibility for safeguarding the assets are fair, balanced and understandable, and risk management systems, unless of the Company, it has delegated the as required under the AIC Code. Our expressly addressed by a separate day-to-day operation of the Company,  Board Risk Committee composed of  provide all necessary information for independent Non-Executive Directors, to the Investment Manager and the shareholders to assess the Company’s or by the Board itself; Administrator through written agreements. position and performance, business model and strategy. Gresham House GRID Annual Report 2024 71 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Audit Committee report | After evaluating the internal controls | The Committee also discussed the | Non-audit services | One major decision the Committee made | | --- | --- | --- | --- | | and risk management processes, the |  | | was to change one of the price curve | | Committee concluded that there was no | and agreed that they adhered to high | The Committee also reviewed the | providers we use. This change resulted in | | current requirement for an internal audit, | professional and ethical standards. BDO | engagement of the external Auditor on | a more fair valuation, leading to a reduction | | as these controls and processes were | demonstrated the appropriate skills and | the supply of non-audit services in order | in NAV by approximately 10%. This | |  | knowledge about our business, industry, | to ensure that the independence of the | adjustment was driven by key changes | | | and environment, as well as the regulatory | external Auditor is maintained, considering | to the revenue assumptions, which the | | | and legal frameworks in which the | the relevant regulations and ethical | Committee reviewed in detail. | | | Company operates. | guidance in this regard. | | | External audit | | | To further validate our valuation approach, | | | Following the rotation of Marc Reinecke, |  | we sought an external independent | As the Audit Committee, we also make  Company’s Auditor did not provide any valuation assessment from Grant recommendations to the Board regarding Acloque has been appointed as the lead non-audit services during the year. Thornton. Their assessment concluded the appointment of external Auditor and audit partner for the Company. that the Investment Manager’s valuation the maintenance of their independence. calculations are fair and reasonable on a We review and comment on the audit In line with best practice, the Company fair value basis, providing us with additional ### strategy paper presented by the Auditor  Key accounting  in advance of the audit, which outlines with a tender process every ten years ### judgements and estimates the key risk areas to be addressed  After a detailed assessment of our  after twenty years. investment valuations, the Committee and I would like to provide an overview of the independence status.  key accounting judgements we have  the Company’s investments are valued After considering feedback from the ### FRC review the Committee has been the high level fairly and reasonably. Investment Manager and Administrator of judgement involved in determining the   valuation of the Company’s unquoted process, the Committee will recommend  investments. Our Investment Manager is ### to the Board either the reappointment or experience in the energy sector and is well Going concern responsible for preparing these valuations, removal of the Auditor immediately before  ### which are meticulously reviewed by and viability the conclusion of the annual audit. the FRC review. Peter Acloque and the the Committee and subsequently Committee held a thorough discussion approved by the Board. I also oversaw our review of the going regarding the FRC’s review of BDO’s concern statement and viability statement ### Auditor independence, audit quality work. Whilst BDO expressed Throughout the year, the valuation of as set out on pages 84 to 85. After ### objectivity and eectiveness disappointment in the outcome of the the Company’s investments has been thorough evaluation, the Committee was  at the forefront of our discussions and   the experience and expertise in the GRID analyses. The Committee, with assistance   audit team and noted BDO’s investment in of the Board consultant, has worked Company is well positioned to continue independence as part of the annual improving its audit quality. Consequently, closely with the Investment Manager to its operations and meet its liabilities both reporting process. The Committee reviewed the Audit Committee concluded gain a comprehensive understanding in the short term and throughout the and agreed that BDO, along with the that it had no concerns regarding of the methodologies and processes outlook period. engagement team and other partners and  used in calculating these valuations. directors involved in the audit, complied with recommends that a resolution to reappoint This understanding has been thoroughly relevant ethical requirements, including the BDO be proposed to shareholders reported to the Board, ensuring FRC’s Ethical Standard, and were deemed at the next AGM. transparency and clarity. independent of the Company. Gresham House GRID Annual Report 2024 72 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Audit Committee report ### Whistleblowing The Committee and I reviewed the  Investment Manager, Administrator and  raise concerns about potential   mechanisms are in place for independent and proportionate investigation of such concerns along with appropriate follow-up actions. These protocols are well integrated into the internal policies of both the Investment Manager and the Administrator. I am pleased to report that there were no instances of whistleblowing during the period. ### Financial reporting I would like to draw your attention to the Directors’ responsibilities statement for preparing the accounts, which is detailed in the statutory and corporate governance section on page 81. Additionally, the statement by the Auditor outlining their reporting responsibilities can be found in the Independent auditor’s report on page 93. This Audit Committee Report is approved  ### Duncan Neale Chair of the Audit Committee 22 April 2025 Gresham House GRID Annual Report 2024 73 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Management Engagement ## Committee report ### As Chair of the Management Key service providers ### Engagement Committee, Iam The Committee undertook a ### pleased to present my report for comprehensive review of all key  ### the year ended 31December which led, among other decisions, ### 2024, which explains the  ### role of the Committee and  ### its work in the period.  We also conducted a thorough discussion During the year, the Committee met twice regarding the performance of JTC and operated within terms of reference (UK) Limited, which the Company has aligned with the AIC Code. The attendance appointed as both Administrator and of each member can be found on page 67. Company Secretary. I am pleased to report that we concluded their performance in both roles remains satisfactory. It is important to note that the Company ### Role and purpose ### Investment Manager The Committee catalysed negotiations retains the responsibility for appointing or ### of the Committee to align the annual management fee removing the Company Secretary.  structure more closely with current  monitoring and reviewing the Investment market conditions and investor sentiment, This Management Engagement Manager’s performance. The Committee culminating in the agreement after the Committee report is approved on behalf  review the contractual relationship considered issues including the Investment year end to base the fee on market  and performance of the Manager being taken private by Searchlight  Investment Manager; and Capital Partners, the resources committed 1 February 2025.  evaluate key service providers, including to the Company, and the need to shift the Company Secretary, Broker, Legal  priorities to debt restructuring and asset Counsel, Depositary, Registrar, and that the continued engagement of ### monetisations, as well as successful Isabel Liu public relations and other advisers. the Investment Manager is in the best completion and operation of projects in Chair of the Management light of challenging market conditions and a interest of the Company and would Engagement Committee declining share price. support the Company’s long-term sustainable success. 22 April 2025 We carefully reviewed the structure of the Investment Manager’s team, key personnel policies and resources. We raised issues on improving communication both with the Board and to external stakeholders. Gresham House GRID Annual Report 2024 74 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Overview Portfolio Market and financial review Governance Accounts Other information # Remuneration Committee report As Chair of the Remuneration Committee, I am pleased to present my report for the year ended 31 December 2024, which explains the role of the Committee and its work in the period. During the year, the Committee met once and operated within terms of reference attendance of each member on page 67. ## Role and purpose of the Committee - ☐ in conjunction with the Chair, set the Directors' remuneration levels; and - ☐ consider the need to appoint external remuneration consultants. ### Review of Directors' remuneration Our Remuneration Policy, decided by the Committee in 2021, laid out that Non-Executive Directors are entitled to an annual increase in remuneration, December each year. After due consideration, the Committee agreed that an increase in the Directors' remuneration by 2.5% was appropriate, given the level of work and need to attract and retain talent to the Board. Remuneration Policy, approved in 2023, to match the December 2024 CPI – Consumer price inflation, UK – Office for National Statistics. I believe it is important that our compensation is fair and comparable to that of other non-executive directors of similar companies. | Director | 2024 fee | 2023 fee | | --- | --- | --- | | John Leggate | £96,810.55 | £99,230.81 | | Duncan Neale | £75,633.25 | £78,280.41 | | Cathy Pitt | £54,455.94 | £55,817.34 | | David Stevenson | £54,455.94 | £55,817.34 | | Isabel Liu | £54,455.94 | £55,817.34 | ![img-2.jpeg](img-2.jpeg) ### External remuneration consultant The Committee considered the appointment of an external remuneration consultant and agreed that this was not required for 2025 and will review this requirement each year. This Remuneration Policy David Stevenson Chair of the 22 April 2024 Gresham House ## Directors’ remuneration report ### I am pleased to present the The Directors are entitled only to their  ### Remuneration Policy annual fee and to be reimbursed for Director is involved in the setting of their ### Directors’ remuneration report The remuneration of Non-Executive any expenses properly and reasonably own remuneration, and remuneration ### for the year ended 31 December | | Directors should be determined with | incurred by them respectively in and about | is set by the Remuneration Committee, | | --- | --- | --- | --- | | 2024. The report has been | due regard to the experience of the | the business of the Company or in the | in line with the Remuneration Policy | | | Board as a whole, the time commitment | discharge of his or her duties as a Director. | and aggregate remuneration levels are | ### produced in accordance with | | required and to be fair and comparable | | limited under the Company’s Articles | | --- | --- | --- | --- | | Section 420 of the Companies | | Any Director who performs services | | | | to that of other non-executive directors | | of Association. | which in the opinion of the Directors ### Act 2006. Under Section 497 of of similar companies. The Company may are outside the scope of the ordinary The level of Directors’ remuneration is in also periodically choose to benchmark ### the Companies Act 2006, the duties of a Director, may be paid such line with the Company’s Remuneration Directors’ fees with an independent ### Company’s Auditor is required reasonable additional remuneration to Policy approved by the Company’s review, to ensure they remain competitive, | | | be determined by the Directors or any | shareholders at the Company’s 2023 | | --- | --- | --- | --- | | to audit certain disclosures | fair and reasonable. The Non-Executive | | | | | | committee appointed by the Directors | GM; this will be put to shareholders at the | Directors are entitled to an annual increase ### contained in my report. I have and such additional remuneration shall be Company’s AGM in 2026.  ### indicated where disclosures have in addition to any remuneration provided  for by way of their annual fee and their ### been audited. You can nd the  reasonable expenses. December each year. ### Auditor’s opinion in its report on ### Director remuneration cap ### pages 87 to 94. No element of the Directors’ remuneration This Remuneration Policy will be put to The Company will propose an ordinary is performance related, nor does any shareholders for approval at least every resolution at the next Annual General Director have any entitlement to pensions, The Remuneration Committee Chair three years and will be tabled for approval Meeting to increase the Directors’ share options or any long-term incentive has summarised the decisions made on at the Company’s AGM in 2026. fee cap to £550,000. This increase is plans from the Company. Directors’ remuneration in the period in his recommended in the context of the The fees for the Directors are determined report on page 75.  Company’s succession plan which could within the limits set out in the Company’s accordance with the Articles and their result in a temporary expansion in the Articles of Association, which states appointment letters. No Director has number of directors on the Board. that the Directors’ remuneration for a service contract with the Company,  nor is any such contract proposed. shall, in the aggregate, not exceed The Directors’ appointments can be £500,000 per annum or such higher terminated in accordance with the Articles  and without compensation. resolution, determines. Gresham House GRID Annual Report 2024 76 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Directors’ remuneration report | Directors’ appointments | Fixed salary | | Total variable | | | | Total | | --- | --- | --- | --- | --- | --- | --- | --- | | | | and fees | remuneration | | remuneration | | | | Director Appointment date | Period from | | | Period from | | Period from | | | | 01/01/23 to | | | 01/01/23 to | | 01/01/23 to | | John Leggate 14 October 2018 31/12/23 31/12/23 31/12/23 Duncan Neale 14 October 2018 2023 £ £ £ David Stevenson 15 October 2018 John Leggate 92,908 – 92,908 Catherine Pitt 28 February 2019 Duncan Neale 72,585 – 72,585 Isabel Liu 26 September 2022 Catherine Pitt 52,261 – 52,261 The Directors’ appointment letters are available for inspection at the Company’s David Stevenson 52,261 – 52,261  Isabel Liu 52,261 – 52,261 months’ notice by either side. The Directors are not entitled to any variable consideration  Total xed remuneration 322,276 – 322,276 Fixed salary Total variable Total and fees remuneration remuneration ### Annual remuneration report | | | Period from | | | Period from | | | Period from | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | The Remuneration Committee considers any change in the Directors’ Remuneration | | 01/01/22 to | | | 01/01/22 to | | | 01/01/22 to | | | | Policy. The report from the Remuneration Committee is set out on page 75. | | | 31/12/22 | | | 31/12/22 | | | 31/12/22 | | | | 2022 | | | £ | | | £ | | | £ | John Leggate 84,080 – 84,080 ### Directors’ remuneration and interests (audited) Duncan Neale 65,687 – 65,687 Fixed salary Total variable Total Catherine Pitt 47,295 – 47,295 and fees remuneration remuneration David Stevenson 47,295 – 47,295 Period from Period from Period from Isabel Liu 11, 824 – 11, 824 | | 01/01/24 to | | | 01/01/24 to | | | 01/01/24 to | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 31/12/24 | | | 31/12/24 | | | 31/12/24 | | Total xed remuneration 256,181 – 256,181 | | 2024 | | | £ | | | £ | | | £ | | John Leggate 96, 811 – 96, 811 Duncan Neale 75,633 – 75,633 Catherine Pitt 54,456 – 54,456 David Stevenson 54,456 – 54,456 Isabel Liu 54,456 – 54,456 Total xed remuneration 335,812 – 335,812 Gresham House GRID Annual Report 2024 77 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Directors’ remuneration report  Fixed salary Total variable Total  | | | and fees | | remuneration | | | | remuneration | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Period from | | | | Period from | | | | Period from | | | | | | | | | | | | | | | | | | | | | As at the date | | As at | | | 01/01/21 to | | | | 01/01/21 to | | | | 01/01/21 to | | | | | | | | | | | | | | | | | | | | | of this report | 31December | | | | | 31/12/21 | | | | 31/12/21 | | | | 31/12/21 | | | | | | | | | | | | | | | | | | | Directors | 22 April 2025 | | 2024 | | 2021 | | | £ | | | | £ | | | | £ | | | | | John Leggate 191,850 191,850 John Leggate 80,000 – 80,000 Duncan Neale 26,432 26,432 Duncan Neale 62,500 – 62,500 Catherine Pitt 40,036 40,036 Catherine Pitt 45,000 – 45,000 David Stevenson 30,050 30,050 David Stevenson 45,000 – 45,000 Isabel Liu* 168,759 168,759 Total xed remuneration 232,500 – 232,500 * Isabel Liu holds her shares through her PCA. Percentage Percentage Percentage Percentage The Company does not oblige the Directors to hold shares in the Company, but this is increase from increase from increase from increase from encouraged to ensure the appropriate alignment of interests. | 31 December | | | 31 December | | | 31 December | | | 31 December | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 2020 to | | | 2021 to | | | 2022 to | | | 2023 to | | | 31December | | | 31December | | | 31December | | | 31December | | | | | | | 2021 on | | | 2022 on | | | 2023 on | | | 2024 on | 2024/2025 remuneration | | | salary and | | | salary and | | | salary and | | | salary and | | | Subject to a further review, the remuneration levels for the forthcoming year for the annual fees annual fees annual fees annual fees Directors are expected to be at the annual fee level as shown in the table above. In line John Leggate 23.0% 5.1% 10.5% 4.2% with the Remuneration Policy described above, the Directors’ remuneration increased at Duncan Neale 38.8% 5.1% 10.5% 4.2%  The Board reviews Directors’ remuneration at least annually to ensure that it is in line Catherine Pitt 12.5% 5.1% 10.5% 4.2% with market rates. David Stevenson 12.5% 5.1% 10.5% 4.2% Isabel Liu n/a 5.1% 10.5% 4.2% ### Consideration of shareholders’ views  reporting periods. We will put to our shareholders at the Company’s 2025 AGM an ordinary resolution to approve the Directors’ remuneration report. This will present an opportunity for shareholders to express their views and raise any queries in respect of the Remuneration Policy at this meeting. Gresham House GRID Annual Report 2024 78 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Directors' remuneration report Overview Portfolio Market and financial review Governance Accounts Other information ## Statement of voting at the 2024 Annual General Meeting The Directors' remuneration report was subject to an advisory vote at the 2024 AGM. The | Resolution to approve Directors' remuneration report | Votes | % | | --- | --- | --- | | Votes for* | 327,826,626 | 99.87% | | Votes against | 426,661 | 0.13% | | Total votes validly cast | 328,253,287 | | | Total votes cast as % of issued share capital | | 57.68 | | Votes withheld** | 102,213 | | * Includes discretionary votes ** A vote withheld is not a vote in law and is not counted in the calculation of the votes for or against a resolution. No concerns were noted from the shareholders as part of the AGM. ## Payments to past Directors or for loss of office There are no payments to disclose. Under the terms of the Directors' Remuneration ![img-3.jpeg](img-3.jpeg) ## Performance graph The graph below represents the Company's performance during the 2024 Annual General Meeting. The Company's performance is based on 13 November 2018 and shows Ordinary Share price for total return performance on a dividends reinvested basis. Both GRID vs FTSE All Share total return ![img-4.jpeg](img-4.jpeg) This graph has been chosen as a comparison as it is a publicly available index which focuses on smaller companies and is therefore more than one of the other publicly available indices. Gresham House Directors’ remuneration report ### Relative importance of spend on pay  Directors’ remuneration in comparison to distributions (dividends and share buybacks)  | | | Payments | | | | | Payments | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | made during | | | | | made during | | | | | the year ended | | | | | the year ended | | | | | | | 31December | | | | | 31December | | | | | | | | 2024 | | | | | 2023 | | | | | | | £ | | | | | £ | Remuneration to Directors 335,812 322,276 Dividends paid to shareholders – 29,955,837 Buy-back of Ordinary Shares 1,999,590 – Total 2,335,402 30,278,113  ### David Stevenson Chair of the Remuneration Committee 22 April 2025 Gresham House GRID Annual Report 2024 80 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Additional statutory and corporate ## governance information   ### Directors’ responsibilities Directors’ responsibilities Company performance the going concern basis unless it is ### The Directors are responsible for inappropriate to presume that the pursuant to DTR4 The Directors have reviewed the preparing the Annual Report and the Company will continue in business; and performance of the Company throughout   the period. Details of the performance  prepare a Directors’ Report, a  applicable law and regulations. of the portfolio owned by the Company Strategic Report and Directors’   are included in the Investment Manager’s Remuneration Report which comply Company law requires the Directors to prepared in accordance with UK Report on pages 12 to 14 and the Chair’s with the requirements of the  adopted international accounting Statement on pages 9 to 11. Companies Act 2006.  standards and give a true and fair view   The Directors are responsible for keeping statements and have elected to prepare  adequate accounting records that ###  Financial risk management   The Annual Report includes a fair review accordance with UK adopted international Company’s transactions and disclose of the development and performance Details in relation to the Company’s use accounting standards. Under company with reasonable accuracy, at any time,   law the Directors must not approve the  position of the Company, together with management objectives and policies,   a description of the principal risks and including policies for hedging each  statements comply with the Companies uncertainties that they face. major type of forecasted transaction  Act 2006. They are also responsible for for which hedge accounting is used and  safeguarding the assets of the Company the Company’s exposure to price, credit, for that period. and hence for taking reasonable steps  ### for the prevention and detection of fraud Insurance cover pages 114 to 116.  and other irregularities. The Directors   are responsible for ensuring that the cover is held by the Company in respect  select suitable accounting policies and  of the Directors. ### then apply them consistently; Investment policy taken as a whole, are fair, balanced and understandable and provide the  make judgements and  information necessary for shareholders accounting estimates that are portfolio of utility scale energy storage to assess the Company’s performance, reasonable and prudent; systems, which utilise batteries. The ESS business model and strategy.  state whether they have been prepared Projects comprising the Portfolio will be in accordance with UK adopted located in diverse locations across Great international accounting standards, Britain and the Overseas Jurisdictions. subject to any material departures disclosed and explained in the  Gresham House GRID Annual Report 2024 81 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Additional statutory and corporate governance information Individual ESS Projects will be held within The Company intends to invest with a Third, the Company intends to achieve Fourth, the Company aims to achieve special purpose vehicles into which the view to holding assets until the end of   Company invests through equity and/ their useful life. ESS Projects may also be and varied revenue sources across the the use of a range of third-party providers, or debt instruments. It is intended that disposed of, or otherwise realised, where Portfolio by investing in ESS Projects insofar as appropriate, in respect of each ESS Project Company will hold one the Manager determines in its discretion  each energy storage project such as ESS Project but an ESS Project Company that such realisation is in the interests of  developers, EPC contractors, battery may own more than one ESS Project. the Company. Such circumstances may  manufacturers and landlords. The Company will typically seek legal and include (without limitation) disposals for Company intends that the ESS Projects Finally, each ESS Project internally operational control through direct or indirect the purposes of realising or preserving in which it invests will primarily generate mitigates operational risk because each  value, or of realising cash resources for revenue from in front of meter services, ESS Project will contain a battery system Project Companies, but may participate in reinvestment or otherwise. but may also provide behind-the-meter with a number of battery modules in each joint ventures or co-investments, including, services. The Company may invest in ESS Projects will be selected with a view stack, each of which is independent and without limitation with other investors or changes to its equipment, technical  can be repaired, upgraded or replaced entities managed, operated or advised by the  respect of the Portfolio. separately, thereby reducing the impact on Gresham House Group, where this approach access revenue streams as they become the project as a whole of the failure of one enables the Company to gain exposure to available, noting that revenue streams  or more battery modules. assets within the Company’s investment and revenue stacking continues to evolve by geographical location of the ESS policy. In such circumstances the Company not only in Great Britain but also in the Projects in which the Company invests will seek to secure its shareholder rights Overseas Jurisdictions as the energy across Great Britain and the Overseas ### through protective provisions in shareholders’ storage market matures. Other investment restrictions Jurisdictions, provided that no more agreements, co-investment agreements and than 30 per cent. of Gross Asset Value The Company will generally acquire ESS Projects in which the Company other transactional documents. (calculated at the time of investment) may ESS Projects where construction is invests may diversify their revenue be invested in the Overseas Jurisdictions. substantially complete and where ESS sources further by collaborating with renewable generators or large users of Projects are capable of commercial ### Asset type and diversication Second, it is the Company’s intention that power in close proximity to an ESS Project, operations (“Operational Projects”). at the point at which any new investment is or providing availability based services to Operational Projects will need to have The Company invests primarily in ESS made, no single project (or interest in any restore electric power stations or part of  Projects using lithium-ion battery project) will have an acquisition price (or, if an electric grids to operation. The Company in the form of a freehold interest or technology as such technology is additional interest in an existing investment may also invest in ESS Projects with Co- substantially similar interest in the  is being acquired, the combined value of Location Arrangements in the Overseas Overseas Jurisdictions or a completed  the Company’s existing investment and the Jurisdictions, and may purchase solar lease on satisfactory terms in relation Company is adaptable as to which energy additional interest acquired shall not be) panels for use at such co-located ESS to the land where that ESS Project is storage technology is used by the projects greater than 20 per cent. of Gross Asset Projects in the Overseas Jurisdictions situated, a grid connection agreement or in which it invests and will monitor projects Value (calculated at the time of investment). provided that the proportion of an grid sharing or such other rights to import and may invest in projects with alternative  investment spent on purchases of solar or export from the relevant network as battery technologies such as sodium and Company will be permitted to invest in a panels does not exceed six per cent. of are market standard and completion of zinc derived technologies, or other forms single project (or interest in a project) that has Gross Asset Value (calculated at the time  of energy storage technology (such as an acquisition price of up to a maximum of of such purchase). commissioning completion.  30 per cent. of Gross Asset Value (calculated air technologies), and will consider such at the time of acquisition). The Company will investments (including combinations  thereof), where they meet the Company’s  investment objective and policy. separate projects at any one time. Gresham House GRID Annual Report 2024 82 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Additional statutory and corporate governance information | The Company may also acquire ESS |  | Investment in Developers | Leverage and derivatives | | --- | --- | --- | --- | | Projects or rights to acquire ESS Projects | to ESS Project Companies before they | | | | which are considered “shovel ready” that | hold Operational Projects so that the ESS | The Company may invest in one or more | The Company may raise debt and introduce | |  | Project Companies can acquire equipment | Developers of ESS Projects through equity | leverage (at the Company level and/or the | | land rights either in the form of a freehold | or make payments in connection with the | issued by the relevant Developer, provided | level of one or more of its subsidiaries, | | interest or substantially similar interest in | ESS Projects’ construction or delivery, | that investment in Developers (calculated | such leverage to be introduced directly or | | the Overseas Jurisdictions or a completed | provided that no more than 25 per cent. | at the time of investment) shall be capped | through one or more subsidiaries) to the | | lease, lease option, or agreement for lease, | of Gross Asset Value (calculated at the | at £1mn in aggregate. | extent funding is available on acceptable | | on satisfactory terms in relation to the |  | | terms. In addition, it may from time to time | | land where that ESS Project is situated, | the latest available valuations) may be | | use borrowing for short-term liquidity | | full planning permission enabling the | exposed in aggregate to any such loans. | Cash management | purposes which could be achieved through | | construction of a suitable ESS Project on | | | a loan facility or other types of collateralised | | | Once an Operational Project is acquired, | Uninvested cash or surplus capital may be | borrowing instruments. The Group is |  or after a Ready to Build Project becomes  permitted to provide security to lenders in grid sharing or such other rights to import an Operational Project, the Company may order to borrow money, which may be by or export from the relevant network as  cash or cash equivalents, money market invest in upgrades by loans or otherwise way of mortgages, charges or other security are market standard prior to connection instruments, money market funds, and enter into new lease arrangements to interests or by way of outright transfer of works being completed (“Ready to bonds, commercial paper or other increase the size of the site, new planning title to the Group’s assets. The Directors Build Projects”). debt obligations with banks or other permissions enabling construction of will restrict borrowing to an amount not counterparties having a “single A” or The Company may invest in Ready to Build an increased capacity ESS Project on exceeding 50 per cent. of the Company’s Net higher credit rating as determined by  that land, a new and/or amended grid Asset Value at the time of drawdown. There any internationally recognised rating cent. Of Gross Asset Value (calculated connection which provides for increased will be no cross-collateralisation between agency selected by the Board which, at the time consideration is paid for such capacity or altered technical parameters, the ESS Projects. may or may not be registered in the acquisition) may be exposed in aggregate and/or an EPC contract, EPCm contract European Union; and | to such Ready to Build Projects. If the | suite or other construction contracts | | Derivatives may be used for currency, | | --- | --- | --- | --- | | | |  any UK “government and public | interest rate and power price hedging | | Company wishes to acquire other Ready to | to undertake construction of the | | | | | |  |  | | Build Projects in excess of the 10 per cent. | relevant upgrades. | | | | | | of the FCA Rules. | portfolio management. However, the | of Gross Asset Value restriction, it may The Company does not intend to invest Directors do not anticipate that extensive acquire such Ready to Build Projects for in listed closed-ended investment funds use of derivatives will be necessary. a nominal upfront consideration provided or in any other investment fund (other that (i) any remaining consideration than, potentially, in money market funds is paid by the Company only where as cash equivalents) and in any event ### construction is substantially complete Ecient portfolio management shall not invest any more than 15 per and where such ESS Projects are capable cent. of its total assets in listed closed-  of commercial operations and (ii) the ended investment funds or in any other techniques may be employed by the Company has a put option to transfer back investment fund. Group, and this may include (as relevant) the Ready to Build Project to the seller in currency hedging, interest rate hedging certain circumstances. and power price hedging. Gresham House GRID Annual Report 2024 83 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Additional statutory and corporate governance information ### Amendment to and compliance  Both the base case and the downside case ### Going concern  show the Company is expected to have ### with investment policy | | As at 31 December 2024, the Company | debt and interest payments expected |  | | --- | --- | --- | --- | | No material change will be made to the | had net current assets of £4.2mn and net | within the MidCo, committed expenditure | obligations and commitments as they | | investment policy without the approval of | cash balances of £4.0mn (excluding cash | for construction projects, and the ongoing | fall due and that the debt covenants of | | Shareholders by ordinary resolution. | balances within investee companies) and | administrative costs of the Company. The | MidCo’s debt facility, which include interest | | | no debt. The Company is a guarantor to |  | cover and leverage tests, are expected to | | In the event of any material breach of the | | discussions has not been taken into | be met. The underlying investments have | the £195mn debt facility (£110mn capex investment restrictions applicable to the account in the Company’s going concern valuable assets which could be sold to facility, £75mn incremental facility and Company, Shareholders will be informed   £10mn revolving credit facility) entered of the actions to be taken by the Manager into by the MidCo in September 2021 and through a Regulatory Information Service. As described in the Chair’s statement  amended and restated in November 2022 on pages 9 to 11 and in the Investment reasonable expectation that the Company and April 2024 which was £150mn drawn Manager’s report on pages 12 to 14 the has adequate resources to continue its at the year end. The MidCo renegotiated Company’s investments experienced a operations for at least 12 months from the the facility in April 2024 to reset debt ### Going concern negative trading environment during large  covenant levels in line with the lower | | | parts of 2024 due to under-utilisation of | As such, the Directors have adopted the | | --- | --- | --- | --- | | and viability | revenue environment at the time and to | | | | | | batteries in the BM. Systems changes | going concern basis in preparing the | reduce the total available facility. There The Annual Report describes the made by NESO during 2024 to improve the   Company’s business activities, together use of batteries have already resulted in enable completion of the projects already   under construction. performance and development and an environment since Q4 2024 which has ### Viability statement assessment of the principal risks and As set out on page 15 the Company is continued into 2025. uncertainties facing the Company. in advanced discussions with a group The Directors have assessed the The Directors have applied two scenarios of lenders to replace the existing debt prospects of the Company for the period The key risks facing the Company include,  facility. The new facility is expected to to June 2028. Although the Company but are not limited to, the risks mentioned provide the Company with increased  i. a base case assessment, based on pages 51 to 55. The Board notes that  beyond this period for valuation purposes, on the blended central case  projects as well as lower debt costs on there is less certainty over the later cash forecasts provided by third-party business over the long term given the   consultants; and inherent uncertainty involved and that investment portfolio is driven by future the risks associated with investments Financial models have been prepared for ii. a severe but plausible downside case pricing volatility in the electricity market. within the infrastructure sector could the going concern period which consider scenario which assumes a reduction in The next continuation vote is to be held by  liquidity at the start of the period and key underlying portfolio revenues of 20% June 2028. We therefore limit the review Company’s performance.  to the base case. to three and a half years to reduce this level as well as at the operational project uncertainty in forecasting and which also   expected cash generated by the portfolio  companies available to be distributed expires in October 2028, shortly after the to the Company. end of the viability assessment period. Gresham House GRID Annual Report 2024 84 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Additional statutory and corporate governance information  Based on the assessment of the Company’s Further, the Directors were also granted ### Post balance sheet events | models have been prepared for the |  | | the authority to make market purchases of | | --- | --- | --- | --- | | viability period which consider liquidity at |  | Post balance sheet events are disclosed in | its own Ordinary Shares from time to time | |  | with cash available to the MidCo and | Note 24 of the accounts on page 120. | of up to 85,302,714 of its Ordinary Shares, | | assumptions at the Company level as well | the forecasts of the Company’s future | | or, if less, 14.99% of the Company’s | | as at the operational project level. These | performance under the various scenarios, | | issued Ordinary Share capital. No new | |  | the Board has a reasonable expectation | | share issues or market purchases of the | ### Website publication cash generated and distributed by the that the Company remains viable and can Company’s own Ordinary Shares were  meet its liabilities as they fall due over the conducted under these authorities. The Directors are responsible for ensuring  period to June 2028.  Following a successful application to debt and interest payments expected statements are made available on the During the year the Company converted the High Court and lodgement of the within the MidCo, committed expenditure Company’s website. £613mn of its loan due from MidCo into Company’s statement of capital with the for investments and expected dividends equity in order to mitigate against Value Registrar of Companies during the year, as well as the ongoing administrative costs Financial statements are published on Added Tax rule changes post Brexit. The the Company cancelled its share premium of the Company. Sensitivities in line with the Company’s website in accordance conversion of the loan due from MidCo into account and merger relief reserve. those undertaken in the going concern with legislation in the UK governing the equity changes the optics of the Company’s assessment have been applied to the   viability period. statements, which may vary from legislation paid up to the Company, interest from in other jurisdictions. The maintenance ### Directors’ report As set out elsewhere in this Annual Report, external parties and valuation gains or and integrity of the Company’s website | the Company is currently in discussions | losses will appear as income. The Company | | | | --- | --- | --- | --- | | | | is the responsibility of the Directors. | For the purposes of the UK Companies | |  | will ensure the Alternative Performance | | | | | |  | Act 2006, the Directors’ report for | |  | Measures continue to provide transparency | | | | | |  | Gresham House Energy Storage Fund plc | | existing facility and provide additional | in relation to the performance of the | | | | | | statements contained therein. | comprises of pages 60 to 85. | | funds to enable the augmentation of | Company and its portfolio. | | | certain projects and the acquisition and  buildout of new projects. The expected cost of debt and the covenant terms for ### Capital structure ### Share capital the replacement facility are expected to be ### and voting rights lower than the existing facility, providing At the year end, the Company had in issue the Company with a greater level of 573,444,694 Ordinary Shares. There Information about the Company’s capital  | | are no other share classes in issue. The | structure and voting rights is set out in | | | --- | --- | --- | --- | | been putting in place long-term revenue | | | John Leggate CBE, FREng | | | Company has repurchased 4,380,555 |  | | |  | | | Chair | | | Ordinary Shares in the period. | pages 118 to 119. | | risk associated with the projects and debt servicing. The upside potential resulting 22 April 2025 All shares have voting rights; each The Directors were granted the authority from the replacement facility has not Ordinary Share has one vote. 4,380,555 at the 2024 AGM to issue new Ordinary been taken into account in the Company’s shares were held in treasury as at Shares, on a non-pre-emptive basis,  31 December 2024. of up to an aggregate nominal value of £573,444.69, representing approximately 10% of the issued Ordinary Share capital as at June 2024. Gresham House GRID Annual Report 2024 85 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Accounts Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Independent auditor’s report ### to the Members of Gresham House Energy Storage Fund plc  We performed checks on the ### Opinion on the Basis for opinion Conclusions relating  ### nancial statements We conducted our audit in accordance to going concern forecasts approved by the Directors. with International Standards on Auditing  We formed our own assessment of risks   (UK) (ISAs (UK)) and applicable law. Our and uncertainties that could impact the have concluded that the Directors’ use of  give a true and fair view of the state responsibilities under those standards Company based on evidence obtained the going concern basis of accounting in  are further described in the Auditor’s in other audited areas as applicable and    our knowledge of the industry. is appropriate. Our evaluation of the year then ended; statements section of our report. We Directors’ assessment of the Company’s  We assessed the ability of the Directors’ believe that the audit evidence we have  have been properly prepared in ability to continue to adopt the going to forecast accurately by comparing the  accordance with UK adopted   provide a basis for our opinion. Our audit international accounting standards; and  opinion is consistent with the additional  We obtained the Directors’ Going  have been prepared in accordance explanations for variances. report to the audit committee.  with the requirements of the  We obtained the Directors’ severe forecasts in respect of their assessment Companies Act 2006. but plausible downside scenario and of going concern and challenged ### Independence reviewed if this scenario, which included  the key underlying judgements and 20% reduction in underlying portfolio of Gresham House Energy Storage Fund assumptions. In doing so we compared Following the recommendation of the revenues compared to the base case, plc (the ‘Company’) for the year ended 31 the forecast revenue to third party audit committee, we were appointed by was reasonable. December 2024 which comprise of the prepared price curves, and the forecast the Board of Directors in December 2019 Statement of Comprehensive Income, operating and capital expenditures  We reviewed the terms and conditions  Statement of Financial Position, Statement to contractual obligations and recent  year ended ending 31 December 2019 of Changes in Equity, Statement of performance trends to assess if they by the Midco, to which the Company is   were reasonable.  period of total uninterrupted engagement statements, including a summary of repayment terms for capital and interest including retenders and reappointments  We assessed the forecast projected material accounting policy information. and covenants in place. is six years, covering the years ended management fees to assess if the   charge is in line with the current assets  We reviewed the Directors’ calculations has been applied in their preparation We remain independent of the Company in under management levels and the of forecast covenant compliance and is applicable law and UK adopted accordance with the ethical requirements reasonableness of projected changes assessed the ability of the Midco to international accounting standards.  in management fees for the forecast meet these covenants even under statements in the UK, including the FRC’s period were reasonable. the severe but plausible downside Ethical Standard as applied to listed public case scenario.    of the fund and underlying portfolio  We obtained and reviewed current year other ethical responsibilities in accordance (as of 31 March 2025) used in the cash  with these requirements. The non-audit  assess if the Company had complied services prohibited by that standard were account balances. with its covenants. not provided to the Company. Gresham House GRID Annual Report 2024 87 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Independent auditor’s report   In relation to the Company’s reporting ### An overview of the scope of our audit disclosures regarding going concern to on how it has applied the UK Corporate satisfy ourselves that the disclosures Governance Code, we have nothing Our audit was scoped by obtaining an understanding of the Company and its are appropriate and consistent with the material to add or draw attention to environment, including the Company’s system of internal control, and assessing Directors’ going concern assessment. in relation to the Directors’ statement   the risk of management override of internal controls, including assessing whether Based on the work we have performed, whether the Directors considered it there was evidence of bias by the Directors that may have represented a risk of  appropriate to adopt the going concern material misstatement. uncertainties relating to events basis of accounting. or conditions that, individually or  Our responsibilities and the ### Key audit matters on the Company’s ability to continue as responsibilities of the Directors with a going concern for a period of at least respect to going concern are described in Key audit matters are those matters that, in our professional judgement, were of most  the relevant sections of this report.  statements are authorised for issue.    engagement team. These matters were addressed in the context of our audit of the ### Overview  provide a separate opinion on these matters. Key audit matters 2024 2023 Valuation of unquoted investments 3 3 Materiality Company nancial statements as a whole  Gresham House GRID Annual Report 2024 88 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Independent auditor’s report Key audit matter Valuation of unquoted investments As detailed in Note 11, the Company owns an investment portfolio of unquoted equity and loan investments, which as described in the summary of accounting policies are held at fair value in the Company Financial Statements. page 107 and Note 17 on page111 The valuations of the investments is a subjective accounting estimate where there is an inherent risk of management override arising from investment valuations being prepared by the Investment Manager, who is remunerated based on the Net Assets Value (NAV) of the Company. The Company has engaged an independent expert valuer to help mitigate the risk.  and estimates from management including, but not limited to discount rates, changes in net revenue yield and changes in energy generation. Changes to the estimates and/or judgements can result, either on an individual or aggregate basis, in a material change to the valuation of unquoted investments and therefore we considered this to be a key audit matter. How the scope of our audit addressed the key audit matter   We assessed the design and implementation of controls around the valuations of investments;  We evaluated the prior year assumptions through a budget versus actual comparison of the results for each portfolio investment for the year to December 2024 to challenge  challenge the forward-looking assumptions;  We conducted research on the battery storage market and challenged the relevant assumptions accordingly;     unusual arrangements or limitation on the scope of their work;    period actual results  We held discussions with the project managers of the assets to critically challenge Management’s assumptions and obtain evidence to support this discussion;  We critically assessed how management have considered the implications and impact of climate change in the valuation;   discussions with them to understand the model assumptions and how the models are produced;  We compared the revenue yield curve to those disclosed by competitors and assessed the impact on the valuations;   Gresham House GRID Annual Report 2024 89 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Independent auditor’s report How the scope of our audit addressed the key audit matter  For investments where the battery asset is under construction, we challenged the policy applied to fair value these investments through obtaining an understanding of the status of each project and the risks of the projects, through discussions with Management and external tracker logs from third party contractors. For the construction risk premium applied, we benchmarked this against other companies and considered the risks in the projects. With the assistance of our internal valuation experts, we have critically assessed and challenged the discount rate premium used;  We agreed period end working capital adjustments in determining the fair value of the portfolio companies to the working capital recognised in the management accounts of the portfolio companies as well as bank statements, invoices and VAT returns;  We agreed the movements in loans provided to the portfolio companies, including verifying interest rates to underlying loan agreements, vouching cash movements to bank statements and re-performing the calculation of interest;  For forecasted maintenance capital expenditure (‘capex’), we have critically challenged management’s assessment by benchmarking the assumptions used to market research data and underlying data; and  For capacity upgrade capex and construction capex, we have agreed the total capex to EPC contracts or other relevant documentation. Key observations: Based on the audit procedures performed, we found the estimates and judgements made by the management in relation to the valuation to be within a reasonable range. Gresham House GRID Annual Report 2024 90 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Independent auditor’s report ### Our application of materiality Specic materiality We apply the concept of materiality both in planning and performing our audit, and in In 2023, we determined that for transactions and balances that impact on the Company’s        In order to reduce to an appropriately low level the probability that any misstatements  exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not   dividends and revenue ceasing to be earned in 2024 following the loan with Gresham misstatements, and the particular circumstances of their occurrence, when evaluating House Energy Storage Holdings plc being converted to equity.   ### Reporting threshold  We agreed with the Audit Committee that we would report to them all individual audit  Company nancial statements below this threshold that, in our view, warranted reporting on qualitative grounds. 2024 2023 Materiality £9,300,000 £11,100,000 ### Basis for determining materiality 1.5% Net assets 1.5% Net assets Other information Rationale for the benchmark applied As an investment trust, we consider that The directors are responsible for the other information. The other information comprises the net asset value is the key measure    statements. the other information and, except to the extent otherwise explicitly stated in our report, £6,510,000 £7,770,000 we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information Basis for determining performance 70% of materiality  materiality the course of the audit, or otherwise appears to be materially misstated. If we identify Rationale for the percentage applied The level of performance materiality applied such material inconsistencies or apparent material misstatements, we are required to for performance materiality was set after having considered a number  of factors including the expected total value themselves. If, based on the work we have performed, we conclude that there is a of known and likely misstatements and the material misstatement of this other information, we are required to report that fact. level of transactions in the year. We have nothing to report in this regard. Gresham House GRID Annual Report 2024 91 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Independent auditor’s report ### Corporate governance statement Other Companies Act 2006 reporting The UK Listing Rules require us to review the Directors’ statement in relation to going Based on the responsibilities described below and our work performed during the course concern, longer-term viability and that part of the Corporate Governance Statement of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on relating to the Company’s compliance with the provisions of the UK Corporate certain opinions and matters as described below.  Strategic report and In our opinion, based on the work undertaken in the Based on the work undertaken as part of our audit, we have concluded that each of the Directors’ report  following elements of the Corporate Governance Statement is materially consistent with  the information given in the Strategic report and the    Going concern and  The Directors’ statement with regards to the  | longer-term viability | appropriateness of adopting the going concern | | | --- | --- | --- | | | basis of accounting and any material uncertainties |  the Strategic report and the Directors’ report have | | | page 72; and | been prepared in accordance with applicable | legal requirements.  The Directors’ explanation as to their assessment of the Company’s prospects, the period this In the light of the knowledge and understanding of the assessment covers and why the period is Company and its environment obtained in the course of appropriate set out on page 84 and 85.  Other Code provisions  Directors’ statement on fair, balanced and the strategic report or the Directors’ report. understandable set out on page 81; Directors’ remuneration In our opinion, the part of the Directors’ remuneration   report to be audited has been properly prepared in assessment of the emerging and principal risks set accordance with the Companies Act 2006. out on page 71; Matters on which we are We have nothing to report in respect of the following  The section of the annual report that describes the required to report by matters in relation to which the Companies Act 2006  exception  internal control systems set out on page 71; and  adequate accounting records have not been kept,  The section describing the work of the audit or returns adequate for our audit have not been committee set out on page 71. received from branches not visited by us; or   Directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or  certain disclosures of Directors’ remuneration   we have not received all the information and explanations we require for our audit. Gresham House GRID Annual Report 2024 92 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Independent auditor’s report ### Responsibilities of Directors Non-compliance with laws and regulations As explained more fully in the Directors’ responsibilities statement, the Directors are    Our understanding of the Company and the industry in which it operates; they give a true and fair view, and for such internal control as the Directors determine is  Discussion with management and those charged with governance; and  misstatement, whether due to fraud or error.  Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations;  Company’s ability to continue as a going concern, disclosing, as applicable, matters  related to going concern and using the going concern basis of accounting unless the FCA listing and DTR rules, the principles of the AIC Code of Corporate Governance, Directors either intend to liquidate the Company or to cease operations, or have no industry practice represented by the AIC SORP, the applicable accounting framework, realistic alternative but to do so.  of this would lead to the Company losing various deductions and exemptions from corporation tax. ### Auditor’s responsibilities for the audit of the  ### nancial statements   supporting documentation;   Enquiries of management and those charged with governance relating to the existence statements as a whole are free from material misstatement, whether due to fraud or of any non-compliance with laws and regulations; error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance  Reviewing minutes of meeting of those charged with governance throughout the with ISAs (UK) will always detect a material misstatement when it exists. Misstatements period for instances of non-compliance with laws and regulations; and can arise from fraud or error and are considered material if, individually or in the  Reviewing the calculation in relation to Investment Trust compliance to check that the  Company was meeting its requirements to retain their Investment Trust Status.  ### Extent to which the audit was capable of detecting irregularities, ### including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our  Gresham House GRID Annual Report 2024 93 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Independent auditor’s report ### Fraud  to all engagement team members who were all deemed to have appropriate competence  and capabilities and remained alert to any indications of fraud or non-compliance with including fraud. laws and regulations throughout the audit.  Our audit procedures were designed to respond to risks of material misstatement in the   Enquiry with management and those charged with governance regarding any known or due to fraud is higher than the risk of not detecting one resulting from error, as fraud suspected instances of fraud; may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed   and the further removed non-compliance with laws and regulations is from the – Detecting and responding to the risks of fraud; and  – Internal controls established to mitigate risks related to fraud. become aware of it.  Review of minutes of meeting of those charged with governance for any known or A further description of our responsibilities is available on the Financial Reporting suspected instances of fraud; www.frc.org.uk/auditorsresponsibilities. This description forms  Discussion amongst the engagement team as to how and where fraud might occur in part of our auditor’s report.   Based on our risk assessment, we considered the areas most susceptible to be valuation of unquoted investments and management override of controls. ### Use of our report  This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so  The procedures set out in the Key Audit Matters section above; that we might state to the Company’s members those matters we are required to state  We obtained the ISAE 3402 from Deloitte for the 12 months ended 30 September to them in an auditor’s report and for no other purpose. To the fullest extent permitted by 2024 and bridging letter from Cas van Aardenne (Associate Director – ICS Operations), law, we do not accept or assume responsibility to anyone other than the Company and and we have reviewed and assessed the design and implementation of controls over the Company’s members as a body, for our audit work, for this report, or for the opinions management override; we have formed.  We critically reviewed estimates and judgements applied by Management in the  systematic bias;     ### deliberate misstatement; Peter Acloque (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor   documentation and evaluating whether there was evidence of bias by the London, United Kingdom Investment Manager and Directors that represented a risk of material misstatement due to fraud; and 22 April 2025  Undertaken interviews with various members of the management and operational team to provide further risk assessment around fraud and the potential for it to occur. BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). Gresham House GRID Annual Report 2024 94 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Statement of ## Comprehensive Income For the year ended 31 December 2024 | For the year ended | | Revenue | | Capital | | Total | | For the year ended | | Revenue | | Capital | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 31December 2024 Note | | | (£) | | (£) | | (£) | 31December 2023 Note | | | (£) | | (£) | | (£) | | Net return on investments | | | | | | | | Net return on investments | | | | | | | | |  | | | | | | | |  | | | | | | | | | and loss 7 9,927,827 (117, 96 0,53 4) (108,032,707) | | | | | | | | and loss 7 45,457,656 (146,752,282) (101,294,626) | | | | | | | | | Other income 886,814 – 886,814 | | | | | | | | Other income 1,191,194 – 1,191,194 | | | | | | | | | Total income 10,814,641 (117,960,534) (107,145,893) | | | | | | | | Total income 46,648,850 (146,752,282) (100,103,432) | | | | | | | | | Administrative and other | | | | | | | | Administrative and other | | | | | | | | |  | | | | | | | |  | | | | | | | | | Legal and professional fees (671,195) (99,986) (771,181) | | | | | | | | Legal and professional fees ( 787,152) (92,567) (879,719) | | | | | | | | | Other administrative | | | | | | | | Other administrative | | | | | | | | | expenses 8 (7,938 ,537) (36,000) (7, 974,537) | | | | | | | | expenses | 8 (9,075,204) (52,545) (9,127,749) | | | | | | | | Total administrative and | | | | | | | | Total administrative and | | | | | | | | | other expenses (8,609,732) (135,986) (8,745,718) | | | | | | | | other expenses (9,862,356) (145,112) (10,0 07,468) | | | | | | | | | Prot/(loss) before tax 2,204,909 (118,096,520) (115, 891,611) | | | | | | | | Prot/(loss) before tax 36,786,494 (146,897,394) (110,110,900) | | | | | | | | | Taxation | 9 – – – | | | | | | | Taxation 9 – – – | | | | | | | | | Prot/(loss) and | | | | | | | | Prot/(loss) and | | | | | | | | | total comprehensive | | | | | | | | total comprehensive | | | | | | | | | income/(loss) for the year 2,204,909 (118,096,520) (115,891,611) | | | | | | | | income/(loss) for the year 36,786,494 (146,897,394) (110,110,900) | | | | | | | | | Earnings/(loss) per share | | | | | | | | Earnings/(loss) per share | | | | | | | | | (basic and diluted) – pence 10 0.39 (20.71) (20.32) | | | | | | | | (basic and diluted) – pence 10 6.57 (26.22) (19.65) | | | | | | | | The total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance with UK adopted International Accounting Standards (UKIAS). The supplementary revenue return and capital columns have been prepared in accordance with the Association of Investment Companies Statement of Recommended Practice (AIC SORP). All results are derived from continuing operations. The notes starting on page 100 Gresham House GRID Annual Report 2024 95 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Overview Portfolio Market and financial review Governance Accounts Other information # Statement of Financial Position As at 31 December 2024 Company number 11535957 | | Note | 31 December 2024 (£) | 31 December 2023 (£) | | | --- | --- | --- | --- | --- | | **Non-current assets** | | | | | | Investments in subsidiaries at fair value | | 11 | 618,037,144 | 727,981,694 | | **Current assets** | | | | | | Cash and cash equivalents | 13 | 4,044,450 | 14,073,513 | | | Trade and other receivables | 14 | 777,173 | 525,310 | | | **Total current assets** | | **4,821,623** | **14,598,823** | | | **Total assets** | | **622,858,767** | **742,580,517** | | | **Current liabilities** | | | | | | Trade and other payables | 15 | (615,431) | (2,433,017) | | | **Total net assets** | | **622,243,336** | **740,147,500** | | | **Shareholders' equity** | | | | | | Share capital | 20 | 5,734,447 | 5,734,447 | | | Treasury shares | 20 | (2,012,553) | – | | | Share premium | 20 | – | 543,915,072 | | | Merger relief reserve | 20 | – | 13,299,017 | | | Capital reduction reserve | 20 | 561,106,626 | 3,892,537 | | | Capital reserves | 20 | 2,256,577 | 120,353,097 | | | Revenue reserves | 20 | 55,158,239 | 52,953,330 | | | **Total shareholders' equity** | | **622,243,336** | **740,147,500** | | | Net Asset Value per Ordinary Share (pence) | 19 | 109.35 | 129.07 | | John Leggate CBE, FREng Chair 22 April 2025 The notes starting on page 100 Gresham House Overview Portfolio Market and financial review Governance Accounts Other information # Statement of Changes in Equity For the year ended 31 December 2024 | | Note | Share capital (£) | Treasury shares (£) | Share premium (£) | Merger relief reserve (£) | Capital reduction reserve (£) | Capital reserves (£) | | --- | --- | --- | --- | --- | --- | --- | --- | | Shareholders' equity at 1 January 2024 | | 5,734,447 | – | 543,915,072 | 13,299,017 | 3,892,537 | 120,353,097 | | | | | – | – | – | – | – | | **Transactions with owners:** | | | | | | | | | Cancellation of share premium reserve | 20 | – | – | (543,915,072) | – | – | – | | Cancellation of merger relief reserve | 20 | – | – | – | (13,299,017) | – | – | | Transfer to capital reduction reserve | 20 | – | – | – | – | 557,214,089 | – | | Issue of class B shares | 20 | 13,299,017 | – | – | – | – | – | | Cancellation of class B shares | 20 | (13,299,017) | – | – | – | – | – | | Share buyback | 20 | – | (2,012,553) | – | – | – | – | | **Shareholders' equity at 31 December 2024** | | **5,734,447** | **(2,012,553)** | **–** | **–** | **561,106,626** | **2,256,577** | Gresham House ## Statement of Changes in Equity Overview Portfolio Market and financial review Governance Accounts Other information | | Note | Share capital (£) | Share premium (£) | Merger relief reserve (£) | Capital reduction reserve (£) | Capital reserves (£) | | --- | --- | --- | --- | --- | --- | --- | | Shareholders' equity at 1 January 2023 | | 5,412,904 | 495,230,993 | 13,299,017 | 3,892,537 | 267,250,491 | | | | | | | | | | | | | | | | | | | | | | | | | | **Transactions with owners:** | | | | | | | | Ordinary Shares issued at a premium during the year | 20 | 321,543 | 49,678,457 | – | – | – | | Share issue costs | 20 | – | (994,378) | – | – | – | | Dividends paid | 20 | – | – | – | – | – | | **Shareholders' equity at 31 December 2023** | | **5,734,447** | **543,915,072** | **13,299,017** | **3,892,537** | **120,353,097** | The notes starting on page 100 Gresham House ## Statement of Cash Flows For the year ended 31 December 2024 | | | 31 December | | | 31 December | | | | | 31 December | | | 31 December | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | 2024 | | | 2023 | | | | | 2024 | | | 2023 | | | | Note | | | (£) | | | (£) | | Note | | | (£) | | | (£) | | Cash ows used in operating activities | | | | | | | | Cash ows used in nancing activities | | | | | | | | | Loss for the year (115, 891,611) (110,110, 90 0 ) | | | | | | | | Proceeds from issue of Ordinary | | | | | | | | Shares at a premium 20 – 50,000,000 Net loss on investments at fair value |  7 117,9 60, 534 146,752,282 | Share issue costs 20 – (994,378) | | --- | --- | | Interest income (10,295,053) (46,028,273) | Share buyback 20 (2,012,553) – | | Dividend income – (83,591) | Dividends paid 20 – (40,492,884) | | Increase in trade and other receivables (251,861) (307,612) | Net cash (outow)/inow from | nancing activities (2,012,553) 8,512,738 (Decrease)/increase in trade and other payables (1, 817, 587 ) 1,861,997 Net (decrease)/increase in cash and cash equivalents for the year (10,029,063) 6,746,021 Net cash used in operating activities (10,295,578) (7,916,097) Cash and cash equivalents at the Cash ows used in investing activities beginning of the year 14,073,513 7,327,492 Loans made to subsidiaries 11 (4,200,000) (2,004,828) Cash and cash equivalents at the end of the year 4,044,450 14,073,513 Loans repaid by subsidiaries 11 6 ,111,8 42 7,500,000 Bank interest received 367,226 654,208 The notes starting on page 100 Net cash received from investing activities 2,279,068 6,149,380 Gresham House GRID Annual Report 2024 99 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Overview Portfolio Market and financial review Governance Accounts Other information # Notes to the Financial Statements For the year ended 31 December 2024 ## 1. General information Gresham House Energy Storage Fund plc (the “Company”) is a company limited by shares and is listed on the special fund segment of the London Stock Exchange. The Company was incorporated in England and Wales on 24 August 2018 with Company number 11535957 as a closed-ended investment company. The Company’s business is as an investment trust within the meaning of Chapter 4 of Part 24 of the Corporation Street, London, EC3M 7AF. Its share capital is denominated in Pounds Sterling (GBP or £) and currently consists of Ordinary Shares. Through its subsidiaries, the Company’s utility-scale Battery Energy Storage Systems (BESS), which utilise batteries and may also utilise generators. The BESS projects comprising the investment portfolio are located in diverse locations across Great Britain. comparatives for the year ended 31 December 2023 and comprise only the results of the Company as all its subsidiaries are measured at fair value. ## 2. Basis of preparation ### Statement of compliance with UK adopted International Accounting Standards (IFRS UK). The accounts have Where presentational guidance set out in the Statement of Receipt (the SORP) “Financial Statements of Investment Trust Companies Trusts”, issued by the Association of Investment Companies (AIC) on a basis compliant with the recommendations of the SORP. The information which analyses the Statement of Comprehensive Income revenue and a capital nature is presented in accordance with the ### Functional and presentation currency The currency of the primary economic environment in which the functional currency is Pound Sterling (GBP or £) which is also ### Going concern As at 31 December 2024, the Company had net current assets of balances of £10mn (excluding cash balances within investee c The Company is a guarantor to the £195mn debt facility (£110mn incremental facility and £10mn revolving credit facility) entered September 2021 and amended and restated in November 2022 as was £150mn drawn at the year end. The MidCo renegotiated the reset debt covenant levels in line with the lower revenue environment completion of the projects already under construction. As set out on page 15 the Company is in advanced discussions to replace the existing debt facility. The new facility is expected to be reused hereunder Gresham House Notes to the Financial Statements Financial models have been prepared for the going concern period which consider ### 3. Signicant accounting judgements, estimates  ###  and assumptions cash generated by the portfolio companies available to be distributed to the Company.    debt and interest payments expected within the MidCo, committed expenditure for reported amount of assets, liabilities, income and expenses. Estimates and underlying construction projects, and the ongoing administrative costs of the Company. The upside assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates  are recognised in the period in which the estimates are revised and in any future   As described in the Chair’s statement on pages 9 to 11 and in the Investment Manager’s report on pages 12 to 14 the Company’s investments experienced a negative trading  environment during large parts of 2024 due to under-utilisation of batteries in the BM. Systems changes made by NESO during 2024 to improve the use of batteries have  Assessment as an investment entity which has continued into 2025.    subsidiaries unless their subsidiaries provide investment management services to the  a base case assessment, based on the blended central case forecasts provided by Company and the subsidiaries are not themselves investment entities. To determine that third-party consultants; and   a severe but plausible downside case scenario which assumes a reduction in  underlying portfolio revenues of 20% to the base case. a) the Company obtains funds from one or more investors for the purpose of providing those investors with investment management services; Both the base case and the downside case show the Company is expected to have  b) the Company commits to its investors that its business purpose is to invest funds due and that the debt covenants of MidCo’s debt facility, which include interest cover solely for returns from capital appreciation, investment income, or both; and and leverage tests, are expected to be met. The underlying investments have valuable c) the Company measures and evaluates the performance of its investments on a  fair value basis.   adequate resources to continue its operations for at least 12 months from the date   the stated strategy of the Company is to deliver stable returns to shareholders through  a mix of battery energy storage investments;  the Company provides investment management services and has several investors who pool their funds to gain access to infrastructure-related investment opportunities that they might not have had access to individually; and  the Company has elected to measure and evaluate the performance of all of its investments on a fair value basis. The fair value method is used to represent the Company’s performance in its communication to the market, including investor presentations. In addition, the Company reports fair value information internally to Directors, who use fair value as the primary measurement attribute to evaluate performance. Gresham House GRID Annual Report 2024 101 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements The Company also meets the typical characteristics of an investment entity as it (via ### 4. New standards, amendments and interpretations the MidCo) holds more than one investment, has more than one investor, has investors ### that are not related parties of the Company and it has ownership interests in the form of published equity or similar interest. Based on the above factors the Directors are of the opinion that  in the standard. The Directors will reassess this conclusion on an annual basis. New and revised IFRSs in issue that came into eect during the year:  annual reporting periods beginning on or after 1 January 2024 and are not deemed to ### Assessment of the MidCo as an investment entity  The MidCo (see Note 11) is not consolidated by the Company as the MidCo is also   considered to be an investment entity. The Board of the MidCo has considered the    Amendments to IAS 7 and IFRS 7  Company would be required to consolidate the MidCo. The net assets of the MidCo have  Amendments to Lease Liability in a Sale and Leaseback – IFRS 16   General Requirements for Disclosure of Sustainability-related Financial Information –  IFRS S1   Climate-related Disclosures – IFRS S2 Note 11 includes an overview of the balances within the MidCo and what would be included in the accounts of the Company if the Company were required to ### consolidate the entity. New and revised IFRSs in issue but not yet eective: Certain new accounting standards and amendments to accounting standards and interpretations have been published that are not mandatory for reporting periods ### Investment Manager not a related party ending 31 December 2024 and have not been early adopted by the Company. These  standards, amendments or interpretations are not expected to have a material impact  on the Company in the current or future reporting periods and on foreseeable future and responsibility for planning, directing and controlling the activities of the entity. The  Directors are of the opinion that the AIFM does not meet these criteria as the Board has The new and amended standards and interpretations that are issued, but not yet to approve key decisions. The AIFM is restricted to the delivery of the investment policy.   Company intends to adopt these new and amended standards and interpretations, if    Valuation of investments in subsidiaries  Amendments regarding deferred tax on leases and decommissioning obligations –  IAS 12 (amended) recorded for the fair value of the investments. By their nature, these estimates and    IFRS 17 (amended)  Note 17 for further details.  Amendments to add requirements for an entity to determine whether a currency is exchangeable into another currency and the exchange rate to use when it is not – IAS 21 (amended) Gresham House GRID Annual Report 2024 102 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements Overview Portfolio Market and financial review Governance Accounts Other information ## 5. Summary of material accounting policies ### Segmental information The Board is of the opinion that the Company is engaged in a single segment business, being the investment in the United Kingdom in battery energy storage assets. ### Income and expenses (excluding investments) Income and expenses are accounted for on an accruals basis. The Company's income and expenses are charged to the Statement of Comprehensive Income. Costs directly relating to the issue of Ordinary Shares are charged to share premium. In the Statement of Cash Flows, accruals for interest income and dividend income are Interest income and dividend income received in cash are added under investing activities if they have been capitalised to the underlying interest or are dividend-earning instruments. ### Net gain or loss on investments at fair value through profit and loss The Company recognises movements in the fair value of investments in subsidiaries or losses are adjusted for within operating activities. ### Taxation The Company is approved as an Investment Trust Company (ITC) under Sections 1158 and 1159 of the Corporation Tax Act 2010 and Part 2 Chapter 1 Statutory Instrument 2011/2999 for accounting periods commencing on or after 25 May 2018. The approval is subject to the Company continuing to meet the eligibility conditions of the Corporation Tax Act 2010 and the Statutory Instrument 2011/2999. The Company intends to ensure that it complies with the ITC regulations on an ongoing basis and regularly monitors the conditions required to maintain ITC status. From 1 April 2015 there was a single corporation tax rate of 19% to 25% since 1 April 2023. Current tax is the expected tax payable for the period ending on 31st September 2023 and the period ended on 31st September 2023. The Company may use taxable losses from within the ### Investment in subsidiaries Subsidiaries are entities controlled by the Company. Control is exposed, or has rights, to variable returns from its involvement. In accordance with the exemption under IFRS 10 Consolidated the Company is an investment entity and only consolidates sub investment management services and which are not themselves Investments in subsidiaries comprise of equity interests and lo each subsidiary are treated as a single investment as investme ### Financial instruments liabilities at initial recognition into the categories of amortised ### Financial assets ![img-5.jpeg](img-5.jpeg) Gresham House Notes to the Financial Statements ### Financial assets measured at amortised cost Equity  Equity instruments issued by the Company are recorded at the amount of the proceeds  received, net of directly attributable issue costs. Costs not directly attributable to the  issue are immediately expensed in the Statement of Comprehensive Income. principal and interest on the principal amount outstanding. The Company includes in this  ### and trade and other receivables. Fair value measurement and hierarchy Fair value is the price that would be received on the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement ### Financial liabilities measured at amortised cost date. The fair value measurement is based on the presumption that the transaction takes  place either in the principal market for the asset or liability, or in the absence of a principal  market, in the most advantageous market. It is based on the assumptions that market participants would use when pricing the asset or liability, assuming they act in their  ### Financial assets measured at fair value through prot or loss (FVPL) best and highest value use for that asset.   a)    payments of principal and interest (SPPI) on the principal amount outstanding; or liabilities. b) it is not held within a business model whose objective is either to collect contractual    fair value measurement is directly or indirectly observable. c)    fair value measurement is unobservable. The Company’s investment in subsidiaries (which comprises both debt and equity  For assets and liabilities that are carried at fair value and which will be recorded in the of the investment does not meet the SPPI test nor will the Company elect to designate  the investments at fair value through other comprehensive income. The debt investment have occurred between levels in the hierarchy by reassessing categorisation at the end forms part of a group of assets that are managed, and the performance evaluated on a of each reporting period. fair value basis. Investments in subsidiaries are treated as Level 3 as the inputs used to determine their  basis in accordance with IFRS 13. Measurement is discussed in further detail in Note 17. ### Recognition and derecognition Financial assets are derecognised on the date on which the Company commits to sell an    liability is discharged, cancelled or expired. Gresham House GRID Annual Report 2024 104 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements Overview Portfolio Market and financial review Governance Accounts Other information ## 6. Fees and expenses ### Accounting, secretarial and Directors JTC (UK) Limited has been appointed to act as Secretary and Administrator for the Company through the Administration and Company Secretarial Agreement. JTC (UK) Limited is entitled to a £65,280 annual fee for the provision of Company Secretarial services and a £59,840 annual fee for the provision of fund accounting and administration services, based on a Company Net Asset Value of up to £200mn. An ad valorem fee based on total assets of the Company which exceed £200mn will be ☐ 0.04% on the Net Asset Value of the Company in excess of £200mn During the year, expenses incurred with JTC (UK) Limited for administrative and (£92,978) being outstanding and payable at the year end. ### AIFM The AIFM, Gresham House Asset Management Limited (the Investment Manager), is entitled to receive a fee from the Company in respect of its services provided under the AIFM Agreement. Following the year end, the Company and the Manager agreed to a revised management fee arrangement to apply from 1 February 2025. ☐ ☐ 0.9% on the NAV of the Company in excess of £250mn and up to and including £500mn ☐ 0.8% on the NAV of the Company in excess of £500mn Under the new arrangements the management fee will based on closing daily market capitalisation during the period and the NAV ☐ NAV of the Company ☐ 0.9% on the average of the market capitalisation and NAV of £250mn and up to and including £500mn ☐ 0.8% on the average of the market capitalisation and NAV of excess of £500mn The AIFM also provides accounting and administration services for project companies and is entitled to an annual fee of £9,000 per expenses incurred with the AIFM for accounting and administration services payable at the year end. The Investment Manager is a wholly owned subsidiary of Gresham House, which is a member of the Company and is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. The Company is a member of the Company. Gresham House Notes to the Financial Statements ### 7. Net return on investments at fair value through the 9. Taxation ### prot and loss The Company is recognised as an Investment Trust Company (ITC) for the accounting  31 December 31 December For the year ended 31 December 2024, the Company may utilise group relief or make 2024 2023  (£) (£)  Unrealised loss on investments at fair value through  (117, 9 60, 534) (146,752,282) 31 December 31 December 2024 2023 Interest on loans to subsidiaries 9,927,827 45,457,656 (£) (£) (108,032,707) (101,294,626)  | | | | | | UK corporation tax | | – – | | --- | --- | --- | --- | --- | --- | --- | --- | | 8. Administrative and other expenses | | | | |  | | | | | | | | | Loss before tax | (115, 891,611) (110,110, 90 0 ) | | | | 31 December | | 31 December | | | | | | | | 2024 | | 2023 |  | | | (28,972,903) (25,876,062) (£) (£)  Administration and secretarial fees 364,149 403,910 Net loss on investments at fair value through the Remuneration received by the Company’s Auditor for  29,490,134 34,486,786  393,633 322,252 Non-taxable income (1,291,689) – Depositary fees 98,686 100,298 Non-deductible expenses 33,996 34,126 Directors’ remuneration – salary 335, 812 322,276 Subject to group relief/designated as Directors’ remuneration – social security interest distributions 740,462 (8,644,850) contributions and similar taxes 37,724 25,306 Tax charge for the year – – Investment Manager fee 6,199,823 7,509,803 Sundry expenses 544,710 443,904 7,974,537 9,127,749 * Included within the Auditor‘s remuneration for 2024 is an amount of £77,599 in relation to additional   in relation to the audit of MidCo for FY2024 Gresham House GRID Annual Report 2024 106 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements Overview Portfolio Market and financial review Governance Accounts Other information ## 10. Earnings per Ordinary Share for the period attributable to ordinary equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period. As there are no dilutive instruments outstanding, basic and diluted EPS are identical. | | Revenue | Capital | 31 December 2024 Total | | --- | --- | --- | --- | | Shareholders (£) | 2,204,909 | (118,096,520) | (115,891,611) | | Weighted average number of Ordinary Shares for the year | 570,332,032 | 570,332,032 | 570,332,032 | | **Profit per share (basic and diluted) – pence** | **0.39** | **(20.71)** | **(20.32)** | | | Revenue | Capital | 31 December 2023 Total | | --- | --- | --- | --- | | Shareholders (£) | 36,786,494 | (146,897,394) | (110,110,900) | | Weighted average number of Ordinary Shares for the year | 560,318,675 | 560,318,675 | 560,318,675 | | **Profit per share (basic and diluted) – pence** | **6.57** | **(26.22)** | **(19.65)** | Gresham House ## 11. Investments in subsidiaries at fair value of the Company's investments consolidate its subsidiaries but, rather, recognises them as investments in the Company's investments. The Company's investments are not subject to the subsidiaries, except as a guarantor to the debt face value of the Company's investments. The Company's investments are not subject to the subsidiaries, except as a guarantor to the debt face value of the Company's investments. | | Immediate parent | Place of business | Register | | --- | --- | --- | --- | | Gresham House Energy Storage Holdings Limited (MidCo) | The Company | The Scalpel, 18th Floor, 52 Lime Street, London, EC3M 7AF | Gresham Asset Limited, Square, England | Refer to Note 17 for valuation disclosures relating to the investments. The Directors evaluate the performance of the portfolio of energy savings through its subsidiary companies on a fair value basis. The income and value investments as it indicates value based on the sum of the current assets, the amount of the project, or group of projects, is anticipated to earn in the future. assess the fair value of the Company's investments and have provided the reasonableness of the valuation of the Company's investments. Notes to the Financial Statements ### Therefore, the investments in subsidiaries are measured at FVTPL under IFRS 9, as these Further analysis  The Company owns 100% of the Ordinary Shares in Gresham House Energy Storage 31 December 31 December Holdings plc (the MidCo) which itself holds a number of 100% owned subsidiaries. The 2024 2023  (£) (£)  Equity 610,020,974 114,20 0, 507 Percentage ownership Total investment | Loans – interest bearing 3,816,170 613,781,187 | | | | | | 31 December | | | 31 December | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 31 December | | 31 December | | | 2024 | | | 2023 | | | Loans – interest free 4,200,000 – | | | 2024 | | 2023 | | | (£) | | | (£) | | Total equity and loans 618,037,144 727,981,694 | Noriker Staunch Limited 100% 100% 9,991,463 14,424,512 | | | | | | | | | | | HC ESS2 Limited 100% 100% 13,494,479 19,893,490 31 December 31 December HC ESS3 Limited 100% 100% 15,206,290 17,16 0, 576 2024 2023 Reconciliation (£) (£) West Midlands Grid Storage Limited 100% 100% 1,467,353 3,428,295 Opening balance 727, 981,694 834,771,492 Cleator Battery  4,200,000 2,004,828 Storage Limited 100% 100% 5,169,624 10,597,554  Glassenbury Battery  (613,781,000) – Storage Limited 100% 100% 29,208,602 46,761,803  (6 ,111,8 43) (7,500,000) HC ESS4 Limited 100% 100% 34,982,667 41,173,725  9,927,827 45,457,656 Bloxwich Energy  613,781,000 – Storage Limited 100% 100% 17,273,60 0 21,945 ,511  (117, 96 0,53 4) (146,752,282) HC ESS6 Limited 100% 100% 33,041,897 40,552,676 Closing balance 618 ,037,144 727,981,694 HC ESS7 Limited 100% 100% 36,400,480 42,467,133 The interest-bearing loan of £3,816,170 attracts an interest rate of 8% per annum from Tynemouth Energy the date of advance. Interest compounds on 31 December of each year and the loan is Storage Limited 100% 100% 6,467,591 13 ,227,60 6 unsecured. During the year, the intercompany loan was capitalised to equity as part of Gridreserve Limited 100% 100% 14,044,116 18,589,464  Nevendon Energy Unless otherwise agreed, the loan principal and any interest accrued on the loans Storage Limited 100% 100% 10,731,805 10,133,433 shall be repayable on the earlier of (i) written demand from the Company, or (ii) 31 December 2030. South Shields Energy Storage Limited 100% 100% 13,540,097 29,953,750 Enderby Storage Limited 100% 100% 4 4,161,760 33,964,005 Gresham House GRID Annual Report 2024 108 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements | Percentage ownership Total investment | | | | | | | | | | | | 31 December | | | 31 December | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | | | 2024 | | | 2023 | | | | | | | | 31 December | | | 31 December | | | | | | | | | | | | 31 December | | 31 December | | | 2024 | | | 2023 | | **Working capital in MidCo | | | (£) | | | (£) | | | | 2024 | | 2023 | | | (£) | | | (£) | | | | | | | | Cash at bank 22,448,024 20,767,752 West Didsbury Trade and other receivables 123,139 381,450 Storage Limited 100% 100% 47,779,392 29,109,414 Loan arrangement fees 2,907,959 5,702,146 Penwortham Storage Limited 100% 100% 41,161,144 29,003,841 Trade and other payables (14,582,564) (25,712,253) Grendon Storage Limited 100% 100% 47,174, 003 53,267,283 Facility loan (150,000,000) (110,000,000) Melksham East Storage Limited and Melksham West Interest payable on facility loan (2,487,083) (1,968,783) Storage Limited 100% 100% 85,496,352 56,125,569 Derivative asset/(liability) 1,635,029 (1, 367, 510) UK Battery Storage Limited 100% 100% 123,458 ,132 187,812,426 (139,955,496) (112,197,198) Stairfoot Generation Limited 100% 100% 23,976,915 29,328,616 GreenGridPower1 Limited 100% 100% 33,647,727 18,856,094 ### Gresham House Energy 12. Loans receivable Storage Solutions Limited 100% 100% 2,075,295 10,565,915 During the year, £613,781,000 of the principal balance of the loan to the MidCo was Arbroath Limited 100% 100% 29, 367, 937 28,945,546 repaid through the issuance of new shares. Subsequently, the Company made a £4,200,000 interest-free loan to the MidCo – see Note 11. Roc Noir Limited 100% 100% 5,717,192 5,509,220 Coupar Limited 100% 100% 32,956,727 27,3 81,435 ### Total investments 13. Cash and cash equivalents in subsidiaries 757,992,640 840,178, 8 92 31 December 31 December Working capital in MidCo** (139,955,496) (112,197,198) 2024 2023 (£) (£) Total investment in MidCo 618 ,037,144 727,981,694 Cash at bank 94,550 10,00 8,138 The place of business for all the investments is 5 New Street Square, London, England, EC4A 3TW. Investment in liquidity funds* 3,949,900 4,065,375 4,044,450 14,073,513 A summary of impact on the Company’s Statement of Financial Position if the MidCo was consolidated is included in Note 3. * The liquidity fund is a liquid, short-term instrument which can easily be converted into cash Gresham House GRID Annual Report 2024 109 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements | 14. Trade and other receivables | | | | | | | | 16. Categories of nancial instruments | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 31 December | | | | 31 December | | | | 31 December | | | 31 December | | | | | | | 2024 | | | 2023 | | | | 2024 | | | 2023 | | | | | | | (£) | | | (£) | | | | (£) | | | (£) | | Prepayments 61,241 77, 6 89 | | | | | | | | Financial assets | | | | | | | | Accrued income 329,640 311,228 | | | | | | | | Financial assets at amortised cost: | | | | | | | | VAT receivable 386,292 136,393 | | | | | | | | Cash and cash equivalents 4,044,450 14,073,513 | | | | | | | | | | 777,173 525,310 | | | | | | Trade and other receivables* 329,640 311, 228 | | | | | | | Fair value through prot or loss: Investment in subsidiaries 618,037,144 727, 981,694 ### 15. Trade and other payables Total nancial assets 622,411,234 742,366,435 31 December 31 December Financial liabilities 2024 2023 (£) (£) Financial liabilities at amortised cost: Administration and secretarial fees 72,762 92,978 Trade and other payables (615,431) (2,433,017) Audit fee accrual 240,740 206,480 Net nancial assets 621,795,803 739,933,418 Other accruals 301,929 2,133,559 * Excludes prepayments and VAT 615,431 2,433,017 As at 31 December 2024, the Company had an outstanding charge with Santander UK plc in respect of its position as guarantor to MidCo’s debt facility, held against all the assets and undertakings of the Company. There are no liabilities recorded in respect of this position.  cost except for the investment in subsidiaries which are measured at fair value. Gresham House GRID Annual Report 2024 110 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements When acquiring new investments, the Company’s valuation approach is based on ### 17. Fair value measurement the status of the projects. If projects are under construction but not expected to be completed within nine months the project will be held at cost. After this date, during construction and once certain key milestones which reduce risk are met, the project will ### Valuation approach and methodology be fair valued. However, a construction premium of 0.75% will be added to the discount The Company, via the MidCo, used the income approach to value its underlying rate. When the investment reaches Provisional Acceptance (PAC) a project will be fair investments. The income approach indicates value based on the sum of the economic valued with a reduced construction premium for 60 days as a proving period. After income that an asset, or group of assets, is anticipated to produce in the future. 60 days the project will be fair valued without a construction premium. Conditional Therefore, the income approach is typically applied to an asset that is expected to acquisitions, where the price of an acquisition has been agreed but shares have not been generate future economic income, such as a business that is considered a going transferred, result in the recognition of a derivative at fair value. No value is attributed to  pipeline which is not under construction. economic income. The income approach is the DCF approach and the method discounts The determination of the discount rate applicable to each individual investment project  considers various factors, including, but not limited to, the stage reached by each project, the period of operation, the historical track record, the terms of the project agreements and the market conditions in which the project operates. ### Valuation process The Investment Manager exercises its judgement in assessing the expected future The Company, via the MidCo, held a portfolio of energy storage investments with  a capacity of 845 megawatts (MW) (the “investments”) with a further 227MW in models for each underlying project. The Investment Manager makes amendments construction at 31 December 2024 and 694MW of longer-term pipeline. The wholly  owned portfolio comprises 30 projects held in 27 special project vehicles. a) discount rates (i) implied in the price at which comparable transactions have been All of the investments are based in the UK. The Directors review and approve the announced or completed in the UK energy storage sector (if available); (ii) publicly valuations of these assets following appropriate challenge and examination. The current disclosed by the Company’s peers in the UK energy storage sector (if available); portfolio consists of non-market-traded investments, and valuations are analysed using and (iii) applicable for other comparable infrastructure asset classes and regulated  energy sectors;  b) changes in power market forecasts from leading market forecasters and the current forecasts from external parties, adjusted for contracted revenues from Capacity Market revenue environment; and tolling contracts, to determine the fair value of the Company’s investments and the  c) changes in the economic, legal, taxation or regulatory environment, including For the year ended 31 December 2024 the revenue forecasts utilised are blended changes in retail price index expectations; forecasts from two providers. As at 31 December 2024, the fair value of the portfolio of d) technical performance based on evidence derived from project performance to date; investments has been determined by the Investment Manager and reviewed by Grant Thornton UK LLP. e) the terms of any power purchase agreement arrangements and/or tolling agreements; f) accounting policies;   g)  in each project have been discounted to 31 December 2024, using discount rates h) claims or other disputes or contractual uncertainties; and  i) changes to revenue, cost, or other key assumptions (which may include an   assumptions and forecasts for revenues, operating costs, macro-level factors and an operating and capital expenditure assumptions and asset life. appropriate discount rate. Gresham House GRID Annual Report 2024 111 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements Valuation assumptions include consideration of climate-related matters such as Estimated eect Estimated eect on fair value on fair value expected levels of renewable energy entering the grid system, demand patterns and | | | | Signicant | 31 December | | | 31 December | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | current regulatory policy. These are factored into the pricing assumptions which are | | Valuation | inputs | | 2024 | | | 2023 | | | | Investment Project | technique | description Sensitivity | | | (£) | | | (£) | prepared by independent consultants. In respect of the valuations at 31 December 2023 the Investment Manager made certain downward adjustments to the revenue Noriker Staunch Staunch DCF Discount rate +1% (67 7, 5 0 9) (989,754) Limited -1% 756,892 1,111, 6 9 0  Revenue +10% 127,095 98,616  -10% (127,112) (99,187) the revenue curves received take into account the lower revenue environment. HC ESS2 Limited  DCF Discount rate +1% (976,327) (1,384,337) Lockleaze, -1% 1,096,488 1,554,621  Littlebrook used in the valuation of the Company’s underlying portfolio and approves them based Revenue +10% 2,040,784 2,151,930 -10% (2,249,778) (2,254,280) on the recommendation of the Investment Manager. HC ESS3 Limited Roundponds DCF Discount rate +1% (1,161,663) (1,263,738) -1% 1,333,815 1,445,053 31 December 2024 31 December 2023 | | | | | | Revenue +10% | | 1,419,403 | 1,497,622 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Weighted | Weighted | | | | -10% | (1,441,585) | (1,534,323) | | Key valuation input Range | average Range | average | West Midlands | Wolves DCF Discount rate +1% | | | (146,524) | (246,278) | | | | | Grid Storage | | | -1% | 166,150 | 276,236 | | WACC/WADR 9.8% – 11.4% 10.7% 9.8% – 11.4% 10.9% | | | Two Limited | | | | | | | | | | | | Revenue +10% | | 399,540 | 418,288 | | | | | | | | -10% | (399,923) | (4 57,701) | RPI 2.5% 2.5% 2.6% – 2.7% 2.6% | | Cleator Battery | Cleator DCF Discount rate +1% | | | | | (312 ,116) | (383,187) | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Another key assumption in the valuation models is the volatility of power prices. Due | Storage Limited | | | | -1% | | 347, 978 | 427,916 | |  | | | | Revenue +10% | | | 436,278 | 484,269 | | of revenue streams including arbitrage on power price volatility or Firm Frequency | | | | | -10% | | (4 37,204) | (485,793) | | Response (FFR) and other similar income streams. Due to the nature of the assets | Glassenbury Battery | Glassenbury | DCF Discount rate +1% | | | (1,689,869) | | (2,096,784) | | | Storage Limited | A and B | | | -1% | 1,890,633 | | 2,349,623 | owned by the investments, should one revenue stream be impacted the asset is able to switch to alternative sources of revenue to seek to maintain total revenue targets, as | | | Revenue +10% | | 2,319,967 | 2,608,642 | | --- | --- | --- | --- | --- | --- | | mentioned in the Investment Manager’s report. | | | -10% | (2, 325,747) | (2,611, 329) | | | HC ESS4 Limited Red Scar DCF Discount rate +1% | | | (3,049,230) | (3,378,646) | | | | | -1% | 3,555,687 | 3,924,386 | | Sensitivity analysis | | Revenue +10% | | 3,972,613 | 4,463,582 | | | | | -10% | (3,988,759) | (4,488,432) |  | | Bloxwich Energy | Bloxwich DCF Discount rate +1% | | | (1,396,081) | (1,596,398) | | --- | --- | --- | --- | --- | --- | --- | | movements of the Company’s investments, via the MidCo. | Storage Limited | | | -1% | 1,580,041 | 1,792,901 | | | | | Revenue +10% | | 2,105,026 | 2,813 ,160 | | The sensitivity analysis does not include an assessment of the fall in the power price | | | | -10% | (2,494,163) | (2,883,980) | as underlying power information is provided on a net revenue basis as the investment HC ESS7 Limited Thurcroft DCF Discount rate +1% (3,241,479) (3,455,743) portfolio generates value through maximising on the volatility in the market, therefore -1% 3,778,607 4,000,692 adjusting revenue as a total is a more relevant measure. We have therefore provided a | | | Revenue +10% | | 3,627,409 | 4,487,571 | | --- | --- | --- | --- | --- | --- | | sensitivity based on percentage changes in revenue overall. | | | -10% | (3,633,332) | (4,507,638) | | | HC ESS6 Limited Wickham DCF Discount rate +1% | | | (2,489,175) | (2,906,428) | | | | | -1% | 2,828,238 | 3,294,299 | | | | Revenue +10% | | 3,768,464 | 4,231,794 | | | | | -10% | (3,799,937) | (4,273,310) | Gresham House GRID Annual Report 2024 112 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements | | | | | | Estimated eect | | | | | Estimated eect | | | | | | | | | | Estimated eect | | | | Estimated eect | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | on fair value | | | | | on fair value | | | | | | | | | | on fair value | | | | on fair value | | | | | | | Signicant | | | 31 December | | | | | 31 December | | | | | | | Signicant | | | 31 December | | | | 31 December | | | | | | Valuation | inputs | | | | | 2024 | | | | | 2023 | | | | Valuation | inputs | | | | 2024 | | | | 2023 | | | Investment Project | | technique | description Sensitivity | | | | | | (£) | | | | | (£) | Investment Project | | technique | description Sensitivity | | | | | (£) | | | | (£) | | Tynemouth Battery | Tynemouth DCF Discount rate +1% | | | | | | (562,580) | | | | | (785,644) | | | UK Battery | Elland DCF Discount rate +1% | | | | | (3,026,521) | | | | (3 ,128,791) | | | | Storage Limited | | | | -1% | | | 655,857 | | | | | 910,977 | | | Storage Limited | | | | -1% | | 3,418,522 | | | | 3,520,488 | | | | | | | Revenue +10% | | | 1,205,364 | | | | | 1,289,339 | | | | | | | Revenue +10% | | | 3,547, 625 | | | | 4,422,703 | | | | | | | | -10% | | (1,223,872) | | | | | (1,295,822) | | | | | | | | -10% | | (3 , 571,134) | | | | (4,471,803) | | | | Gridreserve Limited Byers Brae DCF Discount rate +1% | | | | | | (1,082,788) | | | | | (1,266,615) | | | | UK Battery | York DCF Discount rate +1% | | | | | (2,662,618) | | | | (2,721,348) | | | | | | | | -1% | | 1,221,510 | | | | | 1,425,018 | | | | Storage Limited | | | | -1% | | 3,011,685 | | | | 3,063,902 | | | | | | | Revenue +10% | | | 1,548,968 | | | | | 2,018,014 | | | | | | | Revenue +10% | | | 3,768,14 8 | | | | 4,070,74 0 | | | | | | | | -10% | | (1, 557,910) | | | | | (2,023,244) | | | | | | | | -10% | | (3,797,850) | | | | (4,116, 8 24) | | | | Nevendon Energy | Nevendon DCF Discount rate +1% | | | | | | (696,618) | | | | | (777,887) | | | UK Battery | Bradford West DCF Discount rate +1% | | | | | (4,853,276) | | | | (5,359,658) | | | | Storage Limited | | | | -1% | | | 772,403 | | | | | 863,613 | | | Storage Limited | | | | -1% | | 5,478,942 | | | | 6,033,651 | | | | | | | Revenue +10% | | | 1,013,581 | | | | | 1,123 , 819 | | | | | | | Revenue +10% | | | 5,843,580 | | | | 7,702,758 | | | | | | | | -10% | | (1,125,214) | | | | | (1,124,293) | | | | | | | | -10% | | (5,879,326) | | | | (7,801,266) | | | | South Shields Energy | South Shields DCF Discount rate +1% | | | | | | (536,482) | | | | | (714,481) | | | Stairfoot | Stairfoot DCF Discount rate +1% | | | | | (2,021,854) | | | | (2,211,726) | | | | Storage Limited | | | | -1% | | | 575,951 | | | | | 768,923 | | | Generation | | | | -1% | | 2,322,627 | | | | 2,532,851 | | | Limited | | | Revenue +10% | | 1,126,946 | 1,301,237 | | | Revenue +10% | | | | | 2,296,992 | | | 2,974,098 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | -10% | (1,128,843) | (1,301,461) | | | | | -10% | | | (2,324,247) | | | (2,989,066) | | | | Enderby Storage | Enderby DCF Discount rate +1% | | | (3,640,641) | (3,713,689) | Greengridpower1 | Shilton Lane DCF Discount rate +1% | | | | | | (2,782,011) | | | (3,003,628) | | | | Limited | | | -1% | 4,171, 825 | 4,256,663 | Limited | | | | -1% | | | 3,194,033 | | | 3,455,697 | | | | | | Revenue +10% | | 4,581,705 | 4,991,172 | | | Revenue +1% | | | | | 2,913,181 | | | 3,730,729 | | | | | | | -10% | (4,629,888) | (5,034,671) | | | | | -1% | | | (2,926,420) | | | (3,770,427) | | | | West Didsbury | West Didsbury DCF Discount rate +1% | | | (3,623,541) | (3,509,794) | Coupar Limited Coupar Angus DCF Discount rate +1% | | | | | | | (2,557,068) | | | (2,733,868) | | | | Storage Limited | | | -1% | 4,154,441 | 4,010,765 | | | | | -1% | | | 2,879,950 | | | 3,083,283 | | | | | | Revenue +10% | | 3,948,311 | 4,587,518 | | | Revenue +10% | | | | | 2,932,432 | | | 3,752,746 | | | | | | | -10% | (3,948,020) | (4,648,492) | | | | | -10% | | | (2,951,651) | | | (3,785,451) | | | | Penwortham | Penwortham DCF Discount rate +1% | | | (3,209,097) | (3,069,697) | | | | | | | | | | | | | | | Storage Limited | | | -1% | 3,630,138 | 3,470,007 | All other projects are held at cost. | | | | | | | | | | | | | | | | Revenue +10% | | 3,485,973 | 4,295,182 | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated | | | | Estimated | | | | | | | -10% | (3,420,556) | (4,359,672) | | | | | | | | | | | | | | | | | | | | | | | | | | | eect on | | | | eect on | | | | Melksham East | Melksham DCF Discount rate +1% | | | (6,779,377) | (6,893,088) | | | | | | | fair value | | | | fair value | | | | Storage Limited | | | -1% | 7,75 4, 3 67 | 7,902,313 | | | | | | 31 December | | | | 31 December | | | | | and Melksham West | | | | | | | | | | | | | 2024 | | | | 2023 | | | | | Revenue +10% | | 8,585,144 | 9,073,680 | | | | | | | | | | | | | | | Storage Limited | | | | | | Portfolio sensitivity of RPI Sensitivity | | | | | | | | (£) | | | | (£) | | | | | -10% | (8,683,823) | (9,142,253) | | | | | | | | | | | | | | | | | | | | |  +0.25% | | | | | | 20,336,539 | | | | 19,038,472 | | | | Arbroath Limited Arbroath DCF Discount rate +1% | | | | (2, 537,155) | (2,640,359) | | | | | | | | | | | | | | | | | | | | | | | | –0.25% | | | (19,677,170 ) | | | | (18,479,800) | | | | | | | -1% | 2,943,971 | 3,047,59 9 | | | | | | | | | | | | | | | | | Revenue +10% | | 2,593,530 | 3,217,043 | | | | | | | | | | | | | | | | | | -10% | (2,603,341) | (3,245,071) | | | | | | | | | | | | | | | Grendon Storage | Grendon DCF Discount rate +1% | | | (3,779,055) | (4,134,740) | | | | | | | | | | | | | | | Limited | | | -1% | 4,344,298 | 4,741, 8 02 | | | | | | | | | | | | | | | | | Revenue +10% | | 4,621,904 | 5,052,662 | | | | | | | | | | | | | | | | | | -10% | (4,629,766) | (5,096,692) | | | | | | | | | | | | | | Gresham House GRID Annual Report 2024 113 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements Overview Portfolio Market and financial review Governance Accounts Other information The level in the fair value hierarchy within which the fair value measurement is of a particular input to the fair value measurement in its entirety requires judgement, | | Level 1 (£) | Level 2 (£) | Level 3 (£) | | --- | --- | --- | --- | | 31 December 2024 | | | | | Investment in subsidiaries | - | - | 618,037,144 | | | - | - | 618,037,144 | | | Level 1 (£) | Level 2 (£) | Level 3 (£) | | --- | --- | --- | --- | | 31 December 2023 | | | | | Investment in subsidiaries | - | - | 727,981,694 | | | - | - | 727,981,694 | # Valuation of Financial instruments and the reconciliation in the movement of this Level 3 investment is presented in Note 11. No transfers between levels took place during the period. # 18. Financial risk management The Company is exposed to certain risks through the ordinary course of business and risks. The management of risks is performed by the Directors of the Company and the # Counterparty risk The Company is exposed to third party and the other person in the counterparty risk which the Company and its subsidiaries contracts may default by failing to pay for services received from the subsidiaries and other persons that obligations to the manner of the counterparty may include the amount of limited to the amount of the counterparty's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share of the company's share contract with a single contractor and so will be reliant on the project. Therefore, the key risks during the key liabilities of the project are the counterparty risk of the suppliers and successful The Investment Manager regularly assesses the creditworthiness of the company where necessary, the sourcing of alternative arrangements in the creditworthiness of its present counterparties. Gresham House Notes to the Financial Statements Overview Portfolio Market and financial review Governance Accounts Other information # Concentration risk The Company's investment policy is limited to investments (via MidCo) in battery energy storage infrastructure, which will principally operate in the UK. This means that the result in greater volatility in the value of the Company's investments, and consequently returns to shareholders. The Fund's BESS projects generate revenues primarily from FFR, Asset Optimisation, Capacity Market (CM) and other grid connection-related revenues, including TRIADs and Dynamic Containment. Revenues from the portfolio's BESS projects were historically skewed to FFR revenues, FFR being the provision to the National Grid of a dynamic response service to maintain the grid's electrical frequency at 50Hz. Since the end of 2022 operations were increasingly targeted towards Asset Optimisation, revenue opportunities emerging for the portfolio as a series of regulatory changes are implemented. The Investment Manager is of the view that the UK's exposure to renewable energy lessened despite the removal of legacy subsidies to onshore wind and solar. This is generation, have started to materialise following a weak trading environment for BESS in 2023 and H1 2024. # Credit risk Cash and other assets that are required to be held in custody will be held at bank. Cash and other assets may not be treated as segregated assets and will therefore not be segregated from the bank's own assets in the event of the insolvency of a custodian. Cash held with the bank will not be treated as client money subject to the rules of the FCA and may be used by the bank in the ordinary course of its own business. The Company will therefore be subject to the creditworthiness of the bank. In the event of the insolvency of the bank, the Company will rank as a general creditor in relation thereto and may not be able to recover such cash in full, or at all. The Investment Manager regularly assesses its credit exposure and considers the creditworthiness of its customers and counterparties. Cash and bank deposits are institutions with Moody's credit ratings of A1 and Aaa-mf respectively. Gresham House impairment requirements. For interest receivables on cash balances and loans receivable, the Company is expected to pay the amount of cash. The Company has completed some high-level analysis and for and quantitative information to determine if the interest and rec risk. Based on this analysis the expected credit loss on interest material and therefore no impairment adjustments were account # Liquidity risk The objective of liquidity management is to ensure that all com Company which are required to be funded can be met out of re BESS projects have limited liquidity and may not be readily re realisable at a value less than their book value. There may be a on divestment in the terms and conditions of any sale agreement In 2021, the Company assessed its ability to raise debt and the debt facility for £160mn, which was subsequently amended and a total of £335mn. During 2024, the facility has been resized and reduced by £140mn to £195mn. The Company is permitted to p lenders in order to borrow money, which may be by way of mo security interests or by way of outright transfer of title to the C Company is a guarantor to the MidCo debt facility – should the MidCo the Company may be liable to repay all debt drawn. The borrowing to an amount not exceeding 50% of the Company's obligations when they fall due. Notes to the Financial Statements  | | | | 1 to 2 | | 2 to 5 | | | | | | | | | 1 to 2 | | 2 to 5 | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | As at | < 1 year | | years | | years | | > 5 years | | Total | | As at | < 1 year | | years | | years | | > 5 years | | Total | | | 31 December 2024 | | (£) | | (£) | | (£) | | (£) | | (£) | 31 December 2023 | | (£) | | (£) | | (£) | | (£) | | (£) | | Financial assets | | | | | | | | | | | Financial assets | | | | | | | | | | | | Cash and | | | | | | | | | | | Cash and | | | | | | | | | | | | cash equivalents | | | | | | | | | | | cash equivalents | | | | | | | | | | | | (see Note 13) 4,044,450 – – – 4,044,450 | | | | | | | | | | | (see Note 13) 14,073,513 – – – 14,073,513 | | | | | | | | | | | | Trade and | | | | | | | | | | | Trade and | | | | | | | | | | | | other receivables | | | | | | | | | | | other receivables | | | | | | | | | | | | (see Note 14)* 329,640 – – – 329,640 | | | | | | | | | | | (see Note 14)* 311,228 – – – 311, 228 | | | | | | | | | | | | Fair value through | | | | | | | | | | | Fair value through | | | | | | | | | | | | prot or loss: | | | | | | | | | | | prot or loss: | | | | | | | | | | | | Investment | | | | | | | | | | | Investment | | | | | | | | | | | | in subsidiaries – – – 618 , 037,14 4 618,037,14 4 | | | | | | | | | | | in subsidiaries – – – 727,981, 694 727,981, 694 | | | | | | | | | | | | Total nancial | | | | | | | | | | | Total nancial | | | | | | | | | | | | assets 4,374,090 – – 618,037,144 622,411,234 | | | | | | | | | | | assets 14,384,741 – – 727,981,694 742,366,435 | | | | | | | | | | | | Financial liabilities | | | | | | | | | | | Financial liabilities | | | | | | | | | | | | Financial liabilities | | | | | | | | | | | Financial liabilities | | | | | | | | | | | | at amortised cost | | | | | | | | | | | at amortised cost | | | | | | | | | | | | Trade and | | | | | | | | | | | Trade and | | | | | | | | | | | | other payables | | | | | | | | | | | other payables | | | | | | | | | | | | (see Note 15) 615,431 – – – 615,431 | | | | | | | | | | | (see Note 15) 2,433,017 – – – 2,433,017 | | | | | | | | | | | | Total nancial | | | | | | | | | | | Total nancial | | | | | | | | | | | | liabilities 615,431 – – – 615,431 | | | | | | | | | | | liabilities 2,433,017 – – – 2,433,017 | | | | | | | | | | | * Excludes prepayments and VAT Gresham House GRID Annual Report 2024 116 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements Overview Portfolio Market and financial review Governance Accounts Other information # Market risk risk and other price risks. The objective is to minimise market risk through managing and controlling these risks to acceptable parameters, while optimising returns. The # Price risk due to changes in market prices. At 31 December 2024, the valuation basis of the Company's investments was valued at market value. This investment is driven by market factors and is therefore sensitive to movements in the market. The Company relies on market knowledge of the Investment Manager, the valuation expertise of the third-party valuer and the use of third-party market forecast information to provide comfort with # Interest rate risk to interest rate risk on its cash balances held with counterparties, bank deposits, loans receivable, advances to counterparties and through loans to subsidiaries. Loans to from the lender or 31 December 2030. The Company may be exposed to changes in variable market rates of interest and this could impact the discount rate and therefore the valuation of the projects. The borrowings entered into by MidCo are subject (SONIA) but the majority of these borrowings are also subject to hedging instruments # Currency risk # Capital risk management The capital structure of the Company at year end consists of equ Basic NAV per Ordinary Share is calculated by dividing the Co Ordinary Shares in issue NAV per Ordinary Share - basic and diluted (minus) Gresham House Notes to the Financial Statements | 20. Shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | Merger | | | Capital | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | | | | | | | Ordinary | Share | | | Share | | relief | | reduction | | | | | | | | | | | | | | | | | | | | | | | Shares | capital | | premium | | | reserve | | | reserve | | Total | | | | | | | | | | | | Merger | | | Capital | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | number | | (£) | | | (£) | | (£) | | | (£) | | (£) | | | Ordinary | Treasury | | Share | | | Share | | relief | | reduction | | | | | | | | | | | | | | | | | | | | | Shares | shares | | capital | | premium | | | reserve | | | reserve | | Total | | Allotted and | | | | | | | | | | | | | | | | number | | (£) | | (£) | | | (£) | | (£) | | | (£) | | (£) | issued share capital | | | | | | | | | | | | | | | Allotted and | | | | | | | | | | | | | | | | As at 31 December 2022 541,290,353 5,412,904 495,230,993 13,299,017 3,892,537 517,835,451 | | | | | | | | | | | | | | issued share Issue of Ordinary capital Shares of £0.01 32,154,341 321,543 49,678,457 – – 50,000,000 As at Share issue costs – – (994,378) – – (994,378) 31 December 2023 573,444,694 – 5,734,447 543,915,072 13,299,017 3,892,537 566,841,073 As at 31 December 2023 573,444,694 5,734,447 543,915,072 13,299,017 3,892,537 566,841,073 Issue of Ordinary Shares of £0.01 – – – – – – – ### Share capital 573,444,694 – 5,734,447 543,915,072 13,299,017 3,892,537 566,841,073 Cancellation The Company’s capital is represented by the Ordinary Shares. of share premium reserve* – – – (543,915,072) – – (543,915,072) ### Treasury shares Cancellation of merger relief reserve* – – – – (13,299,017) – (13,299,017)  Transfer to as a reduction of equity at its cost price and are disclosed as a separate component capital reduction in the statement of changes in equity. No gain or loss is recognised in the statement reserve* – – – – – 557,214,089 557,214,089 of comprehensive income on the purchase of the Company’s own equity instruments. Issue of class Amounts to be received when treasury shares are sold or reissued will be recognised B shares* 569,064,139 – 13,299,017 – – – 13,299,017  Cancellation of or from retained earnings. class B shares* (569,064,139) – (13,299,017) – – – (13,299,017) Shares No dividends were received on treasury shares during the year. repurchased** (4,380,555) (2,012,553) – – – – (2,012,553) As at Treasury shares are treated as a deduction from the weighted average number of 31 December shares in issue. 2024 569,064,139 (2,012,553) 5,734,447 – – 561,106,626 564,828,520 * During the year the Company cancelled the share premium reserve via a court process that concluded ### on 1 November 2024. As part of this process there was an issue and subsequent cancellation of class Share premium B Ordinary Shares to the existing holders of class A Ordinary Shares as a “bonus issue” ** During the year, the Company repurchased 4,380,555 Ordinary Shares for £2,012,553 which are held The surplus of net proceeds received from the issuance of new shares over their par as treasury shares at the year end value is credited to this account and the related issue costs are deducted from this account. The reserve is non-distributable. During the year the Board approved a resolution to cancel the share premium reserve and transfer the amount into the capital reduction reserve. Gresham House GRID Annual Report 2024 118 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements ### Merger relief reserve Revenue reserve The merger relief reserve relates to shares issued for shares to acquire investments. The revenue reserve represents a distributable reserve of cumulative net gains and This reserve is not distributable. losses recognised in the revenue account of the Statement of Comprehensive Income. During the year the Board approved a resolution to cancel the merger relief reserve and transfer the amount into the capital reduction reserve. ### Capital reserve The capital reserve represents a non-distributable reserve of cumulative net capital ### Capital reduction reserve gains and losses recognised in the Statement of Comprehensive Income. Following a successful application to the High Court and lodgement of the Company’s statement of capital with the Registrar of Companies in a prior period, the Company ### Dividends  premium and merger reserve account. This was completed on 13 February 2019 by a transfer of the balance of £97,009,475 from the share premium account to the capital For the year ended 31 December 2024 reduction reserve. No dividends have been declared or paid for the period ended 31 December 2024. Following a successful application to the High Court and lodgement of the Company’s statement of capital with the Registrar of Companies during the year, the Company For the year ended 31 December 2023 was permitted to cancel its share premium account and merger relief reserve. This was completed on 16 October 2024 by a transfer of the balance of £543,915,072 from the Period in share premium account and £13,299,017 from the merger relief reserve to the capital | | relation to which | Announcement | | | Ex-dividend | | Payment | | | Amount per | | Total | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | reduction reserve. | dividend was paid | | | date | | date | | date | Ordinary Share | | amount | | | | 1 January to | | 5 May 2023 18 May 2023 8 June 2023 1.8375p £9,946,210 | | | | | | | | | | The capital reduction reserve is classed as a distributable reserve and dividends to be 31 March 2023  | 1 April to | 7 September | | 14 September | | 29 September | | 1.8375p £10 , 5 37,0 4 6 | | --- | --- | --- | --- | --- | --- | --- | --- | | 30 June 2023 | | 2023 | | 2023 | | 2023 | | | 1 July to | 17 November | | 7 December | | 21 December | | 1.8375p £10 , 5 37,0 4 6 | ### Share capital and share premium account and capital reduction 30 September 2023 2023 2023 2023 ### reserve account Ordinary shareholders are entitled to all dividends declared by the Company and, in On incorporation the Company issued 1 Ordinary Share of £0.01 which was fully a winding up, to all of the Company’s assets after repayment of its borrowings and paid up and 50,000 redeemable preference shares of £1 each which were paid to ordinary creditors. Ordinary shareholders have the right to vote at meetings of the one quarter of the nominal value. These 50,000 redeemable preference shares were Company. All Ordinary Shares carry equal voting rights. subsequently redeemed. Gresham House GRID Annual Report 2024 119 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Notes to the Financial Statements Overview Portfolio Market and financial review Governance Accounts Other information ## 21. Cash and non-cash flow items The non-cash movements for the year ended 31 December 2024 predominantly relate to repayment of the loan to the MidCo through the issuance of new shares and movement in the investments. These non-cash movements are reconciled and discussed in Note 11. ## 22. Transactions with related parties and other significant contracts The Company and the Directors are not aware of any person who, directly or indirectly, jointly, or severally, exercises or could exercise control over the Company. The Company does not have an ultimate controlling party. ### Directors | | 31 December 2024 (£) | 31 December 2023 (£) | | --- | --- | --- | | Directors' remuneration | 335,812 | 322,276 | | Employers' NI | 37,724 | 25,306 | | **Total key management personnel** | **373,536** | **347,582** | All Directors' remuneration is short-term salary. The remuneration arrangements of Directors are disclosed in the Directors' remuneration report on page 76. Dividends paid by the Company to the Directors are disclosed in the Directors' remuneration report on pages 76 to 80. No dividend amounts were payable as at The aggregate fees of the Directors will not exceed £500,000 per annum. There are no performance conditions attaching to the remuneration of the Directors as the Board does not believe that this is appropriate for Non-Executive Directors. The Directors are Gresham House ### Loans to related parties Loans receivable represent amounts due to the Company from disclosed in Note 11. Principal advanced Interest accrued **Total loans** ## 23. Capital commitments ## 24. Post balance sheet events The Company and the Manager have agreed to a revised management fee to apply from 1 February 2025. Thereafter, rather than being called the published NAV, the management fee will be based on an average market capitalisation and the NAV. There were no further events after the reporting date which required ## Alternative Performance ## Measures For the period from 1 January 2024 to 31 December 2024 ### 2. Ordinary Share price total return Ordinary Share price total return is a measure of the return that could have been  ### 1. Dividend per Ordinary Share | Dividend per Ordinary Share is a measure to show the distributions made to shareholders | 31 December | | 31 December | | | --- | --- | --- | --- | --- | | during the year. | | 2024 | | 2023 | | | | pence | | pence | Share price at end of the year 45.90 109.00 ### Dividend period: 12 months to 31 December 2024 Dividends paid from inception to end of the year 31.02 31.02 No dividends have been declared or paid for the year ended 31 December 2024. Dividend reinvestment impact (17. 92) 0.08  (100.00) (100.00) ### Dividend period: 12 months to 31 December 2023 Ordinary Share price total return since inception (41.00) 4 0.10 Number of Ordinary Share price total return since inception % (41.0%) 40.1% Dividend paid shares on Total dividend per share dividend paid (£) payment date (£) ### 3. Net asset value (NAV) per Ordinary Share Q1 2023 (declared 5 May 2023) 0.018375 541,290,353 9,946,210 Q2 2023 (declared 7 September 2023) 0.018375 573,444,694 10, 537,046 31 December 31 December 2024 2023 Q3 2023 (declared 17 November 2023) 0.018375 573,444,694 10 , 537,0 46 NAV at end of the year £622,243,336 £740,147,50 0 0.0551 31,020,302 Ordinary Shares in issue 569,064,139 573,444,694 NAV per share (pence) – Basic and diluted 109.35 129.07 Gresham House GRID Annual Report 2024 121 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Alternative Performance Measures | 4. NAV per Ordinary Share total return for the period | | | | | | | 6. Ongoing charges gure (OCF) | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | NAV per Ordinary Share total return is a measure of the success of the Investment | | | | | | | OCF measures the Company’s recurring fund management costs incurred during the | | | | | | Manager’s strategy to grow the NAV, showing how the NAV has changed over a period of | | | | | | | year expressed as a percentage of the average of the net assets at the end of each | | | | | | time, considering both capital returns and dividends paid to shareholders. | | | | | | | quarter during the year. | | | | | | | 31 December | | | 31 December | | | | 31 December | | 31 December | | | | | | 2024 | | | 2023 | | | 2024 | | 2023 | | | | (pence) | | | (pence) | | | | (£’000) | | (£’000) | | NAV per Ordinary Share at end of the year 109.35 129.07 | | | | | | | Fees to Investment Manager 6,200 7, 510 | | | | | | Dividends paid from inception to end of the year 31.02 31.02 | | | | | | | Legal and professional fees 771 880 | | | | | | Dividend reinvestment impact 1.99 7.93 | | | | | | | Transaction fees 36 53 | | | | | | NAV per Ordinary Share at end of the year including | | | | | | | Administration fees 301 343 | | | | | dividend reinvestment 142.36 168.02 Directors’ remuneration 374 348 NAV per Ordinary Share at beginning of the year Audit fees 394 322 including dividend reinvestment (168.02) (192.87) Other expenses 670 551 NAV total return for the year (25.66) (24.85) Total expenses 8,746 10,007 NAV per Ordinary Share total return for the year (15.27%) (12.88%) Non-recurring expenses not in OCF calculation (136) (145) Dividend reinvestment impact recalculated to compound the dividend reinvestment as at Total ongoing expenses (A) 8,610 9,862 the date of payment, consistent with the Ordinary Share price total return calculation. Average NAV for the year (B) 666,842 830,129 Ongoing charges for the year (A/B) 1.29% 1.19% ### 5. Gross asset value (GAV) GAV is a measure of the total value of the Company’s assets. | 31 December | | 31 December | | | --- | --- | --- | --- | | | 2024 | | 2023 | | | (£’000) | | (£’000) | Total assets reported in the Company at end of period 622,859 742,581 Debt held by intermediate holding company (A) 150,000 110,000 GAV (B) 772,859 852,581 Gearing as dened by the Company (A/B) 19% 13% Gresham House GRID Annual Report 2024 122 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Alternative Performance Measures Overview Portfolio Market and financial review Governance Accounts Other information ## 7. Operational Dividend Cover Operational Dividend Cover is a measure to demonstrate the Company's ability to pay dividends from the earnings of its underlying investments after accounting for external interest costs, facility commitment fees and administrative costs of the Company but excluding historic transaction costs and historic debt arrangement fees. | | 31 December 2024 (£'000) | 31 December 2023 (£'000) | | --- | --- | --- | | EBITDA of underlying group companies (unaudited) | 29,071 | 25,796 | | Ongoing costs in the Company | (8,610) | (9,862) | | **Net earnings before interest** | **20,461** | **15,934** | | Bank interest received in the Company and the MidCo | 1,069 | 1,086 | | Interest income on construction capital deployed to non-owned SPVs | – | 64 | | Facility commitment fees | (1,312) | (2,428) | | External interest costs in the MidCo | (8,349) | (6,908) | | **Net earnings for dividend cover calculation (A)** | **11,869** | **7,748** | | Interest income on construction capital deployed to owned SPVs | 15,600 | 17,612 | | **Net earnings for dividend cover as previously calculated** | **27,469** | **25,360** | | **Dividends declared by the Company in respect of the period (B)** | **–** | **31,020** | | **Dividend cover (A/B)** | **n/a** | **0.25x** | ## 8. Dividend yield Dividend yield is a measure to show the dividend return received by Dividend per share declared in respect of the period (pence) Share price at end of period (pence) **Dividend yield for the period** ## 9. Operational capacity of the portfolio Operational capacity of the portfolio is a measure to show the capacity of the underlying investments. Operational capacity (MW) Operational capacity (MWh) Gresham House Alternative Performance Measures ### 10. Aggregated nancial information  of the Company and its portfolio. | 31 December | | 31 December | | | --- | --- | --- | --- | | | 2024 | | 2023 | | | (£’000) | | (£’000) | Net operating revenue in SPVs (unaudited) 46,522 38,717 Operating SPV administrative and other costs (unaudited) (17, 343) (12,879) Ongoing administrative and other costs in the MidCo (108) (42) Portfolio operational earnings before interest, depreciation and amortisation 29,071 25,796 Company administrative and other expenses (8,610) (9,862) Bank interest income 1,069 1,086 Facility interest expense and commitment fees (9,661) (9,336) Other interest 192 (77) Non-recurring transaction, FX and similar costs (767) (1,445) Non-operational SPV administrative and other costs (unaudited) (243) (354) Depreciation and amortisation (unaudited) (40,062) (29,134) Net aggregated earnings (29,011) (23,326) Gresham House GRID Annual Report 2024 124 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Other information Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Company information ### Non-Executive Directors Corporate Brokers and Administrator and Secretary Depositary ### Financial Adviser John Leggate – Chair JTC (UK) Limited INDOS Financial Limited Isabel Liu The Scalpel 54 Fenchurch Street  Duncan Neale 18th Floor London 100 Bishopsgate Catherine Pitt 52 Lime Street EC3M 3JY London David Stevenson London EC2N 4JL EC3M 7AF ### Peel Hunt LLP Investment Valuer ### Registered oce 100 Liverpool Street Grant Thornton LLP ### London Registrar and Receiving Agent The Scalpel 30 Finsbury Square EC2M 2AT | 18th Floor | Computershare Investor Services plc | London | | --- | --- | --- | | 52 Lime Street | The Pavilions | EC2A 1AG | | London | Bridgewater Road | | ### Tax Adviser EC3M 7AF Bristol ### BS13 8AE Ticker Blick Rothenberg Chartered Accountants 16 Great Queen Street GRID ### Investment Manager and AIFM London ### EC4V 6BW Legal Adviser Gresham House Asset Management Limited Eversheds LLP 5 New Street Square 1 Wood Street ### Independent Auditor London London EC4A 3TW EC2V 7WS BDO LLP 55 Baker Street London W1U 7EU Gresham House GRID Annual Report 2024 126 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Glossary ### Asset Optimisation (Trading) Balancing services Combined Cycle Gas EBITDA of underlying ### Turbine (CCGT) group companies Asset Optimisation involves buying and National Grid procure services to balance selling electricity in order to capture demand and supply and to ensure Energy generation technology that EBITDA includes earnings before interest, a spread between the high and low the security and quality of electricity  tax, depreciation and amortisation and electricity prices on any given day. This supply across Britain’s transmission turbine. The design uses a gas turbine includes liquidated damages earned can be done via one or more market  to create electricity and then captures by SPVs. Earnings are calculated on an mechanisms, hence the expression “Asset  Black start the resulting waste heat to create steam, accruals basis and therefore only SPVs Optimisation” and includes trading in the which in turn drives a steam turbine. which were owned in the accounting  Demand side response  period have their earnings included here. to National Grid via the BM.  Dynamic Containment (DC) Transactions completing after the period ### Curtailment will have locked box income recognised  Enhanced Frequency Response (EFR) once the transaction is completed.  Firm Frequency Response (FFR) ### AUM Large wind farms are connected to the UK’s high-voltage network and National This is important to measure the  Optional Downward Flexibility  underlying performance of the Management (ODFM) Grid balances electricity supply and assets of the Company. investments and ensure cash earnings demand. As demand rises and falls during  Short-Term Operating Reserve (STOR) the day, electricity supply mirrors these are available to payment of costs in the peaks and troughs. Company and dividends to shareholders. www.nationalgrideso.com/ ### Balancing Mechanism (BM) balancing-services  A tool used by the ESO to balance the from electricity generators to increase or ### Engineering, Procurement and electricity supply and demand close to real decrease electricity generation as and when ### Construction (EPC) contract ### time. The BM is used to balance supply Capacity Market (CM) required. As such, it may mean that there are and demand in each half hour trading times when generators are paid to curtail This relates to a “turnkey” construction The income received by generators to period of every day. their output (constraint payments). project where the EPC contractor takes full ensure generation capacity is available to responsibility for the delivery of a project. Where the ESO predicts that there will meet shortfalls. www.nationalgrideso.com/news/ be a discrepancy between the amount grounds-constraint of electricity produced and the level of ### Engineering, Procurement and demand during a certain period, they may ###  Construction Management ### Dividend yield ### or decrease generation (or even increase (EPCM) contract consumption in the case of storage The annual dividends expressed as a assets). Sites must be registered in the percentage of the current share price. This is a type of professional engineering BM to receive such actions but once services contract where the EPCM registered they are able to set their own contractor is responsible only for the prices for being used. management of the construction project. Gresham House GRID Annual Report 2024 127 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Glossary ### Frequency Response Liquidated damages (LD) National Energy System Net Asset Value (NAV) per ### services (FR) Operator (NESO) Ordinary Share Liquidated damages are presented in certain legal contracts as an estimate A subset of Balancing Services which Refers to National Energy System The total net assets in the Company of losses to one of the parties. It is a relates to services performed by Operator Limited, which has taken over divided by the total number of Ordinary provision that allows for the payment of a batteries to manage the frequency on the electricity system operation from Shares in issue. This is an important  the electricity system. This includes the National Grid Electricity System Operator measure to understand the capital return in breach of contract. Liquidated damages  Limited. The NESO is responsible for to shareholders. are meant as a fair representation of ensuring Great Britain has the essential  Dynamic Containment (DC) losses in situations where actual damages energy it needs so that supply meets  Dynamic Moderation (DM)  ### demand on the electricity system every Ongoing Charges Figure (OCF)  Dynamic Regulation (DR) second of every day. Liquidated damages are often included The Ongoing Charges Figure includes  Enhanced Frequency Response (EFR)  www.neso.energy all charges and costs incurred by the circumstances where a party faces a loss  Firm Frequency Response (FFR) Company which relate to the ongoing from an asset. The Company typically operation of the Company. This includes  Optional Downward Flexibility uses these in EPC arrangements to ### NAV Total Return management fees, administration fees, Management (ODFM) protect earnings from an asset in the audit fees, Directors’ remuneration, result of delays to construction but are A measure showing how the NAV per depositary services costs and other also common in other contracts such as share has performed over a period of similar costs. It excludes capital costs and ### Gross Asset Value (GAV) for O&M arrangements. time, considering both capital returns and costs of raising new capital. The Ongoing dividends paid to shareholders. Charges are then divided by the weighted Gross Asset Value is the total value of average NAV and annualised. the investments and cash under the NAV Total Return is shown as a ### Market capitalisation management of the Company including percentage change from the start of the debt held by the MidCo. Market capitalisation is the total value period. It assumes that dividends paid to of the publicly traded outstanding shareholders are reinvested at NAV at the shares, calculated by multiplying the time the shares are quoted ex-dividend. ### UK adopted International current share price by the number of NAV Total Return shows performance ### Accounting Standards (IFRS UK) outstanding shares.  UK adopted International Accounting discounts and premiums (share prices). Standards are accounting standards  issued by the International Financial  Reporting Standards UK Board (IASB) as levels of dividends. adopted by the UK and have been applied by the Company in the preparation of the  Gresham House GRID Annual Report 2024 128 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Glossary ### Operational Dividend Cover Share price total return shows Symmetrical TRIADs  Operational Dividend Cover for the movements in discounts and premiums. A symmetrical grid connection  purpose of this report refers to a  is where the import and export of highest demand on the Great Britain calculation for the ratio between net  capacities are the same. electricity transmission system between earnings of the underlying investment levels of dividends. November and February each year; the portfolio in the review period and TRIADs are part of a charge-setting ### dividends paid in respect of the same System inertia  review period. This measure aims to demand at three points during the winter ### Proving period | add clarity on the Company’s ability | | Inertia works to keep the electricity | in order to minimise energy consumption. | | --- | --- | --- | --- | | to pay dividends from the earnings | A period of 30 days after a project has | system running at the right frequency by | | | | | using the kinetic energy in spinning parts | However, TRIADs must be at least ten days | | and cash generation of its underlying | achieved PAC. During this time, the project | | | | | | in power plant generator turbines. When | apart. This is to avoid all three potentially | | investments after deducting Company | is fair valued subject to a premium added | | | | | | needed, the spinning parts in generator | falling in consecutive hours on the same | | costs. This measure includes the EBITDA | to the base discount rates of 50 bps to | | | | | | turbines can rotate slightly faster or slower | day, for example during a particularly cold | | of underlying group companies less | capture risk during the commissioning of | | | | | | to help balance out supply and demand. | spell of weather. | | Company and holding company costs | the project. After this period, the project is | | | | (excluding capital-related costs and debt | fair valued without any additional premium. | The more turbines there are, the more | | www.nationalgrideso.com/news/triads- arrangement fees but including external energy there is in the system and the why-three-magic-number interest expense) and interest income on greater the system inertia, which helps to construction capital deployed to SPVs. stabilise the frequency. ### Seed assets www.nationalgrideso.com/information- The assets acquired at IPO known as about-great-britains-energy-system-  ### Ordinary Share and-electricity-system-operator-eso/ and Roundponds. technical-terms-explained Share in the Company with a nominal value of 1p. ### Skip rates ### Tolling  ### Ordinary Share price total return A tolling agreement allows the toller to when an action is taken by the control take operational control of the batteries A measure showing how the share price room even though there is a cheaper and operate them, within the technical has performed over a period of time, alternative to achieving the same outcome constraints of the BESS, in return for a considering both capital returns and – so the cheaper action is “skipped”.  dividends paid to shareholders. Share price total return is shown as a ### Site uptime percentage change from the start of the period. It assumes that dividends Calculation for the average level of paid to shareholders are reinvested in availability in the portfolio or for an asset the shares at the time the shares are in Frequency Response services. This is quoted ex-dividend. calculated by taking the average MWs available in each period as a percentage of total capacity contracted. Gresham House GRID Annual Report 2024 129 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review ## Sustainable Finance Disclosure ## Regulation (SFDR) Under the EU SFDR, the Company is required to provide periodic disclosure as The EU Taxonomy is a l To what extent were the environmental and/or referenced in Article 8 of Regulation (EU) 2019/2088. The following section provides  social characteristics promoted by this nancial required disclosures as per Annex IV. down in Regulation (EU) product met? 2020/852, establishing a Product name: Gresham House Energy Storage Fund plc | | list of environmentally | The environmental characteristic promoted by the | | --- | --- | --- | | Legal entity identier: 213800MSJXKH25C23D82 | sustainable economic | Gresham House Energy Storage Fund plc (the “Company”) | | | activities. That | is its commitment to investing in and increasing Battery | Environmental and/or social characteristics Regulation does not lay Energy Storage System (BESS) capacity to support Sustainable investment Does this nancial product have down a list of socially  means an investment a sustainable investment objective? sustainable economic systems. BESS play an essential role in supporting the in an economic activity activities. Sustainable decarbonisation of energy systems and consequently l  l   Yes l l  No that contributes to an investments with an the broader economy. In this way, the Company aims to environmental or social  sustainable   environmental objective contribute positively to climate change mitigation and net objective, provided that investments with objective in economic might be aligned with the zero strategies. the investment does an environmental activities that qualify Taxonomy or not. The Company retains its commitment to invest in and  objective: __% as environmentally increase BESS capacity to support the decarbonisation | any environmental | | | sustainable under the | | | --- | --- | --- | --- | --- | | |   | | | of energy systems. In the last reporting year, the Fund | | or social objective | | |  | | | | | qualify as environmentally | | invested £59mn into BESS assets and successfully | and that the investee sustainable under the EU   completed the development of 155MW of new companies follow good Taxonomy objective in economic operational capacity. governance practices. activities that do not   qualify as environmentally The increased adoption of BESS contributes, through that do not qualify sustainable under the enabling increased penetration of renewables, to the as environmentally EU Taxonomy with a decarbonisation of the UK energy system where the sustainable under the EU  Company has historically focused its investment activity. Taxonomy    sustainable characteristics, but did not Sustainability l How did the sustainability indicators perform? investments with a make any sustainable indicators measure social objective: __% how the environmental The Manager uses the following sustainability indicators investments or social characteristics to assess the adherence of the Company to the  promoted   Environmental/Social (E/S) characteristics and product are attained.  Total operational battery energy storage capacity while it did not have as its (megawatts (MW) and megawatt hours (MWh)) objective a sustainable  Total battery energy storage capacity under construction investment, it had a (megawatts (MW) and megawatt hours (MWh)) proportion of __% of sustainable investments Gresham House GRID Annual Report 2024 130 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Sustainable Finance Disclosure Regulation (SFDR) Overview Portfolio Market and financial review Governance Accounts Other information the Company intended to measure, monitor and report on carbon emissions avoided (tCOE) as a result of the operation of BESS and increase in BESS capacity. The Manager has determined an interim methodology to estimate the carbon emissions avoided through the increased adoption of BESS in energy systems. This is reported below for 2024. The table below shows the performance of the Company against its sustainability indicators for 2024 and 2023. The indicators show an increase in the total operational battery energy storage capacity and an increase in capacity under construction. This demonstrates that the Company is continuing to contribute to supporting the decarbonisation of energy systems. | Indicator | 2024 | 2023 | | --- | --- | --- | | Total operational BESS capacity (MW) | 845 | 690 | | Total operational BESS capacity (MWh) | 1,207 | 788 | | Total BESS capacity under construction (MW) | 227 | 382 | | Total BESS capacity under construction (MWh) | 454 | 879 | | Total carbon emissions avoided from operations (tCOE) | 596,764 | 677,775 | The EU Taxonomy sets out a “do no significant harm” principle by which Taxonomy-aligned investments should not significantly harm EU Taxonomy objectives and is accompanied by specific EU criteria. account the EU criteria for environmentally sustainable economic activities. The investments underlying the account the EU criteria for environmentally sustainable economic activities. Any other sustainable investments must also not significantly harm any environmental or social objectives. investments constituting the greatest proportion of investments of the reference period 31 December 2024 What were the top investment financial product? | Invest investments | Sector | | --- | --- | | Melksham | BESS | | West Bradford* | BESS | | West Didsbury | BESS | | Grendon | BESS | | Enderby | BESS | | Penwortham | BESS | | Thurcroft | BESS | | Elland* | BESS | | York* | BESS | | Red Scar | BESS | (West Bradford, Elland and York are in Storage Ltd) Gresham House Sustainable Finance Disclosure Regulation (SFDR) Asset allocation l What was the proportion of sustainability- Taxonomy-aligned l To what extent were the sustainable describes the share related investments? activities are investments with an environmental objective of investments in  aligned with the EU Taxonomy?  l What was the asset allocation?  turnover All assets invested in by the Company were battery energy the “greenness” l Did the nancial product invest in fossil gas storage system assets. of investee and/or nuclear energy related activities companies today. complying with the EU Taxonomy*? c.98% of the Company’s investments, based on connection  capital expenditure capacity (MWs), are aligned with the environmental  (“capex”) shows the and/or social characteristics of the Company. The green investments   made by investee  companies, relevant  sustainable investments. for a transition to * Fossil gas and/or nuclear related activities will only comply with a green economy. #1 Aligned with E/S the EU Taxonomy where they contribute to limiting climate change  characteristics – 98%  operational Taxonomy objective - see explanatory note in the left hand margin. expenditure (“opex”) | Investments | | The full criteria for fossil gas and nuclear energy economic activities | | --- | --- | --- | | |  | that comply with the EU Taxonomy are laid down in Commission | | | operational activities of | Delegated Regulation (EU) 2022/1214 | #2 Other – 2% investee companies. #1 Aligned with E/S characteristics includes the  environmental or social characteristics promoted by the  #2 Other includes the remaining investments of the   sustainable investments. l In which economic sectors were the investments made? All assets invested in by the Company (100%) were in the  were into battery energy storage system assets. Gresham House GRID Annual Report 2024 132 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review Sustainable Finance Disclosure Regulation (SFDR) The graphs below show in green the percentage of Sustainable l What investments were included under “other”, investments that were aligned with the EU Taxonomy. investments with an what was their purpose and were there any As there is no appropriate methodology to determine environmental objective minimum environmental or social safeguards? |  | | | | | that do not take into | | | --- | --- | --- | --- | --- | --- | --- | | graph shows the Taxonomy alignment in relation to all the | | | | | account the criteria | “Other” category investments include a legacy asset that | |  | | | | | for environmentally | uses mostly gas engine technology to provide power to the | | bonds, while the second graph shows the Taxonomy | | | | | sustainable economic | grid although it does have a small amount of BESS (used as | |  | | | | | activities under | primary energy source before gas takes over) and a small | | product other than sovereign bonds. | | | | | Regulation (EU) | amount of diesel generator capacity across three sites | | | | | | | 2020/852. | (primarily used as back up for Capacity Market Obligations) | | | 1. Taxonomy-alignment | | 2. Taxonomy-alignment | | | which was disposed in Q4 2024. The Company no longer | | of investments including | | | of investments excluding | | | makes, and is not able to make under its investment policy, | | | | sovereign bonds* | | sovereign bonds* | | new investments in assets using fossil fuels. | | | Opex | | Opex | | | | l What actions have been taken to meet the Capex Capex environmental and/or social characteristics during the reference period? Tu rnover Tu rnover As discussed above, the Company continued to invest in | 0% 50% 100% | | 0% 50% 100% | | | | --- | --- | --- | --- | --- | | | Ta xonomy-aligned (no gas and nuclear) | | Ta xonomy-aligned (no gas and nuclear) | and build out BESS capacity during the period. In addition, | | | Non-Taxonomy-aligned | | Non-Taxonomy-aligned | | the Manager worked to improve carbon emissions data * For the purpose of these graphs, “sovereign bonds” consist of all measurement and quality, and to develop a methodology sovereign exposures to estimate carbon emissions avoided through the Company’s BESS assets. | Enabling activities | l What was the share of investments made in | | | | --- | --- | --- | --- | | directly enable other | | transitional and enabling activities? | The Manager continues to work to gather more carbon- | | activities to make a | | | related data at construction stage and across the lifecycle | | substantial contribution | The Company did not make any Taxonomy-aligned | | of BESS components to understand the lifecycle carbon | | to an environmental | investments, including investments in transitional and | | emissions impact. | | objective. | enabling activities. The share was therefore 0%. | | | In addition, the Manager continues to engage with relevant Transitional activities government and industry stakeholders to drive forward are activities for which l What was the share of sustainable investments initiatives to support the decarbonisation of energy low-carbon alternatives with an environmental objective not aligned systems and understanding of the mechanisms required are not yet available with the EU Taxonomy? to support greater renewables penetration in the future. and among others A key example of this has been the Manager taking part The Company did not make any sustainable investments, have greenhouse in the Review of Electricity Market Arrangements (REMA) including sustainable investments with an environmental gas emission levels consultation through 2022 and ongoing through meetings objective not aligned with the EU Taxonomy. The share corresponding to the with BEIS and the ESO. As a result of this consultation the was therefore 0%. best performance. Manager has combined with other energy market leaders to form part of an industry study into the possible impact and design of a wholesale market using locational pricing. Gresham House GRID Annual Report 2024 133 Sustainability Accounts Other information Governance Overv iew Portfolio Market and nancial review