Half-year Report and amendments to AIFM agreement

RNS Number : 9143J

Gore Street Energy Storage Fund PLC

16 December 2022

Gore Street Energy Storage Fund Plc

('GSF' or the 'Company')

Half Year Results

Amendments to AIFM agreement and Commercial Management Agreement

Gore Street Energy Storage Fund plc (ticker: GSF), London's first listed energy storage fund supporting the transition to low carbon power in the UK and internationally, today announces its Half-Year Unaudited results for the six-month period to 30 September 2022.

Financial Highlights as of 30 September 2022

· NAV increased by 45% from £369.6 million¹ in March 2022 to £534.79 million as at September 2022

· NAV per share² increased 3.7% to 111.1 pence (31 March 2022: 107.1 pence)

· NAV Total Return of 4.65% for the six months ended 30 September 2022

· Market Capitalisation increased to £529.54 million as at 30 September 2022 (31 March 2022: £369.58 million)

· Quarterly dividends for the period of 4.0 pence per share, in line with the 7% of NAV target (a total of 4.0 pence in dividends were announced for the period. A total of 3p was paid during the period, 2p relating to the December 2021 quarter, and 1p relating to the March 2022 quarter) ⁴

· In April 2022, the Company raised £150.0 million in an upscaled and oversubscribed issuance

o Issued Share Capital (ISC) increased to 481.4 million (31 March 2022: 345.0 million)

· Earnings per share (basic and diluted) of 4.81 pence as at 30 September 2022 (30 September 2021: 4.20 pence)

Operational Highlights as of 30 September 2022

· Average discount rate increased by 1% across the portfolio due to higher interest rates generally in the UK, reflecting a weighted average discount of 9.3%. Short-term inflation assumptions have also been updated to reflect the current economic environment.

· Total portfolio (inclusive of grid expansion grants) increased to 698.2 MW (31 March 2022: 628.5 MW)

· Total operational assets increased to 16 projects, with a total capacity of 291.6 MW across four grids (31 March 2022: 12 projects with 231.7 MW capacity)

· Completed acquisition of three 9.95 MW operational and four 9.95 MW pre-construction assets in the ERCOT market of Texas, United States

· Successful commissioning of the 30 MW Porterstown phase I project near Dublin, Ireland. The asset commenced generating cash flow in July 2022 under a DS3 capped contract

· Final consents for phase II, adding an additional 60 MW, is expected to be completed before the end of the calendar year

· The operational fleet performed well during the period.

Post Period-end Highlights

· Acquisition of one of the largest energy storage assets in Europe; a 200 MW transmission-connected construction ready project in Heysham, North-west England. Post-acquisition, the total portfolio capacity increased to 898.2 MW

· As of the publication date, the Company's portfolio consisted of 25 projects, consisting of 898 MW of utility-scale energy storage assets across the UK, the Republic of Ireland, Germany and the United States, of which 291.6 MW was operational, and 606.6 MW are at varying stages of construction

· The Company is actively reviewing opportunities in GB, Ireland, Australia, Continental Europe and the US. The total pipeline stands at 1.5 GW with 764 MW under exclusivity

· In the Irish market "EirGrid", the Company now has 310 MW of capacity, the largest portfolio of Irish assets available in the public market

· The Company's portfolio now benefits from geographical diversification across four high-growth markets, having entered the North American markets during the fiscal year

Dividend Payment

In line with the Company's dividend policy, it will pay a 2.0 pence per share dividend on or around 13 January 2023 to shareholders on the register on 30 December 2022. The ex-dividend date will be 29 December 2022.

Amendments to AIFM Agreement and Commercial Management Agreement

Following a review, the Company has agreed with the Investment Manager and its subsidiary, Gore Street Operational Management Limited (the "Operations Manager"), that with effect from 16 December 2022, the AIFM Agreement between the Company and the Investment Manager and the Commercial Management Agreement ("CMA") between the Company and the Operations Manager will be amended. The notice period under the CMA has been increased from 6 months to 12 months in order to align with the notice period under the AIFM Agreement. Amendments have also been made to both agreements: (i) to provide that in the specific event of a takeover offer for the Company becoming wholly unconditional, the agreements will terminate automatically with no requirement for notice to be served; and (ii) to prescribe certain fees that will then become payable to the Investment Manager and the Operations Manager on such termination. Any fees in addition to the notice period that may become payable to the Investment Manager and the Operations Manager in the event of a takeover offer becoming wholly unconditional as a result of these contractual amendments are capped in aggregate at below 5 per cent. of the Company's NAV at the relevant time. Further details of the amendments, including the calculation of any exit performance fee or minimum takeover fee that may become payable are set out in the below and on page 26 of the half year report for the six months ended 30 September 2022.

The Investment Manager and any members of its group, which includes the Operations Manager, are related parties of the Company for the purpose of the FCA's Listing Rules. Based on the amounts involved, the changes to the AIFM Agreement and CMA constitute a smaller related party transaction as set out in the FCA's Listing Rule 11.1.10R. Further details are set out below and on page 26 of the half year report for the six months ended 30 September 2022.

CEO of Gore Street Capital, the investment adviser to the Company, Alex O'Cinneide, commented:

"I am pleased to report another successful period of growth as we continue to deliver on our strategic objectives of providing an attractive level of returns to shareholders despite the changing macro inflationary environment through providing an essential service enabling the renewable transition and enhancing energy security. The portfolio grew significantly during the period, with total capacity reaching nearly 900 MW in aggregate post-period end, of which 291 MW is operational and generating strong cash flow for the Company.

A recent focus has been to diversify the portfolio through acquiring assets in new territories, which we are pleased to have executed successfully, with the acquisition of assets in both the US and Germany this year. In our view, this strategy of avoiding single-country risk is of even more benefit to our shareholders, given recent macroeconomic events.

During the period, we successfully completed an oversubscribed placing, raising £150 million in April. The demand seen highlights both the institutional and retail interest for access to companies which have a major role in enabling the transition towards a net-zero economy, and the increasingly large and attractive number of opportunities in our pipeline, totalling 1.5 GW.

Post-period end, we acquired the Company's largest construction-ready asset to date, the 200 MW transmission-connected project from Kona Energy, further strengthening the Company's leadership position in the GB market. We are highly encouraged by an asset of this scale being connected to the main transmission network, which we expect will provide additional revenue streams. I thank shareholders for their continued support and look forward to updating investors on our progress."

^{Adjusted NAV is calculated as the NAV per the Statement of Financial Position as at 31 March 2022 adjusted for the interim dividend relating to the December 2021 quarter of £6.9 million, which was declared in March 2022 but paid post-period end on 1 April 2022. This is an alternative performance measure.}
^{Note on NAV per Share: Calculated as Total NAV divided by the total number of shares in issue.}
^{Note on NAV Total Return: Calculated as the difference between the NAV at 30 September 2022 and NAV at 30 September 2021, plus dividends paid for the period divided by opening NAV at 30 September 2021 ((111.1 – 103.3+7)/103.3)*100). This is an alternative performance measure.}
^{See note 11 to the Financial Statements for further details.}

The half year report will shortly be available to download from the Company's website www.gsfenergystoragefund.com . Please click on the following link to view the document:

http://www.rns-pdf.londonstockexchange.com/rns/9143J_1-2022-12-15.pdf

The Company has also submitted its half year report to the National Storage Mechanism and it will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Enquiries:

Gore Street Capital Limited
Alex O'Cinneide / Paula Travesso	Tel: +44 (0) 20 3826 0290
Shore Capital (Joint Corporate Broker)
Anita Ghanekar / Rose Ramsden / Iain Sexton (Corporate Advisory) Fiona Conroy (Corporate Broking)	Tel: +44 (0) 20 7 408 4090

J. P. Morgan Cazenove (Joint Corporate Broker)
William Simmonds / Jérémie Birnbaum (Corporate Finance)	Tel: +44 (0) 20 7742 4000

Buchanan (Media enquiries)


Charles Ryland / Henry Wilson / George Beale	Tel: +44 (0) 20 7466 5000
	Email: Gorestreet@buchanan.uk.com

Notes to Editors

About Gore Street Energy Storage Fund plc

Gore Street is London's first listed energy storage fund and seeks to provide Shareholders with an opportunity to invest in a diversified portfolio of utility scale energy storage projects. In addition to growth through exploiting its considerable pipeline, the Company aims to deliver consistent and robust dividend yield as income distributions to its Shareholders.

Half Year Report of Gore Street Energy Storage Fund Plc

For the six months ended 30 September 2022

Highlights and Key Metrics

Key Metrics

As of 30 September 2022

MARKET CAPITALISATION ¹

£529.54 million

DIVIDEND FOR THE PERIOD ²

4.0p

SHARE PRICE TOTAL RETURN ³

for the six months ended 30 September 2022

0.00%

NAV

£534.79 million

NAV PER SHARE ⁶

111.1p

NAV TOTAL RETURN ⁴

for the six months ended 30 September 2022

4.65%

Table 1: Key Metrics	As at 30 September 2022	As at 31 March 2022
Net Asset Value (NAV)	£534.79m	£369.58m⁵
NAV per share⁶	111.1p	107.1p
NAV Total Return⁷	14.3%	13.1%
Number of issued Ordinary shares	481.40m	345.04m
Share price based on closing price of indicated date	110p	113p
Discount/Premium to NAV⁸	(1.0%)	5.5%
Market capitalisation based on closing price at indicated date¹	£529.54m	£389.9m
Portfolio's total capacity	698.25MW	628.5 MW
Dividends announced⁹	4.0p	7.0p
Share Price Total return for the six months ended 30 September 2022³	0.0%
NAV Total Return for the six months ended 30 September 2022⁴	4.65%

1 Note on Market Capitalisation: closing share price of 110 pence as of 30 September 2022. The total number of shares of 481.4 million.

2 Note on Interim Dividend: A total of 4.0 pence in dividends was declared for the period between March and September 2022.

3 Note on Share Price Total Return for the six months ended 30 September 2022: Calculated as the difference between the closing share price as at 30 September 2022 and opening share price as at 31 March 2022, plus dividends paid since 31 March 2022 divided by opening share price as at 31 March 2022 ((110-113+3)/113)*100. This is an alternative performance measure.

4 Note on NAV Total Return for the six months ended 30 September 2022: Calculated as the difference between the NAV as at 30 September 2022 and Adjusted NAV as at 31 March 2022, plus dividends paid since 31 March 2022 (excluding the dividend paid on 1 April 2022 as it is factored into the Adjusted NAV figure) divided by Adjusted NAV as at 31 March 2022 ((111.1-107.1+1)/107.1)*100. This is an alternative performance measure.

5 Adjusted NAV is calculated as the NAV per the Statement of Financial Position as at 31 March 2022 adjusted for the interim dividend relating to the December 2021 quarter of £6.9 million, which was declared in March 2022 but paid post period end on 1 April 2022. This is an alternative performance measure.

6 Note on NAV per Share: Calculated as Total NAV divided by the total number of shares in issue.

7 Note on NAV Total Return: Calculated as the difference between the NAV at 30 September 2022 and NAV at 30 September 2021, plus dividends paid for the period divided by opening NAV at 30 September 2021 ((111.1 - 103.3+7)/103.3)*100). This is an alternative performance measure.

8 Note on Discount to NAV: Calculated as the difference between the closing share price on 30 September 2022 to NAV on 30 September of 2022 ((110-111.1/111.1)*100). This is an alternative performance measure.

9 A total of 4.0 pence in dividends was announced for the period. A total of 3p was paid during the period, 2p relating to December 2021 quarter, and 1p relating to March 2022 quarter. See note 11 to the Financial Statements for further details.

Chair's Statement

I am pleased to present the Company's Interim report for the six months ending 30 September 2022.

Overview and Performance

The Company continues to go from strength to strength with the completion of the acquisition of three 9.95 megawatts (MW) operational and four 9.95 MW pre-construction assets in the ERCOT market of Texas, United States. Post the reporting period, the Company also acquired a 200 MW construction-ready project in Great Britain (GB) - the largest asset in the portfolio to date. With the consolidated 269.6 MW capacity added through acquisitions, the Company's portfolio capacity has reached 898.2 MW as of the date of publication.

I am delighted to report an increase in the Company's operational portfolio following the successful commissioning of the 30 MW Porterstown phase I project, with final consents for phase II, adding an additional 60 MW, expected before the end of the calendar year. The Company's operational portfolio stands at 291.6 MW, with assets located internationally across four grids.

Also, it is with great pleasure that I note that at the Citywire Investment Trust Awards 2022, the Company won the inaugural award for Best Specialist Alternatives trust in recognition of its consistent performance as the closed-ended fund on the London Stock Exchange with the best three-year performance in its category.

Macroeconomic context

The macroeconomic climate shifted rapidly over the reporting period, with rising short-term inflation, rising interest rates, high foreign exchange (FX) volatility and increasing construction costs. The Investment Manager has sought to limit the impact on the Company's portfolio by securing competitively priced EPC contracts through its dedicated construction team, exploiting economies of scale, minimising debt exposure, and geographical diversification of the operational portfolio to create natural hedges against FX volatility.

Fundamental growth drivers for energy storage remained strong throughout the period, with a clear global shift towards low-carbon energy generation necessitating assets able to provide system flexibility, such as those owned and operated by the Company. As a result, I am confident of the Company's ability to continue delivering a sustainable and attractive dividend with an element of capital growth to investors over the long term.

Further details may be found in the Investment Manager's report, below.

Dividends

The Company's dividend target is 7% of NAV. In line with this target the Company paid an interim dividend of 2.0 pence per share on 8 April 2022 for the period ending 31 December 2021. The Company also paid 1.0 pence for the period ending 31 March 2022 on 26 August 2022 and 2.0 pence on 21 October 2022 for the period ending 30 June 2022. The Company will also pay a dividend of 2.0p for the September end quarter, with an ex-dividend date of 29 December 2022 and a payment date of 13 January 2023.

Share price and NAV Performance

I have been comforted by the resilience of the Company's share price during a turbulent time for the global economy, particularly in the UK capital markets.

We have taken the prudent step of increasing the discount rates used in the valuation of the Company's portfolio by 1%. This reflects the increased interest rates and higher opportunity cost for investors within the renewables sector. Despite the discount rate increase and dividends paid during the period, the NAV total return achieved in the 6-month period was 4.65%.

NAV growth during the period was supported by financial discipline in construction and asset management. The Investment Manager strongly believes in capital efficiency and strives to achieve amongst the lowest Capex and/or Capex/MW in the industry through leveraging its in-house technical know-how.

Further details of NAV breakdown may be found in the Investment Manager's report below.

Strategy and operational performance

The Investment Manager has been focused on diversifying the Company's portfolio and mitigating its exposure to the effects of recent macroeconomic events.

As of the publication date, the Company's portfolio consists of 898.2 MW of utility-scale energy storage assets across the UK, the Republic of Ireland, Germany and the United States. This consists of 291.6 MW of operational assets and 606.6 MW of assets at varying stages of construction.

The Company's operational assets continue to yield higher-than-expected revenues across the markets in which they operate through the efficient optimisation of revenue stacks.

The average system availability during the period was satisfactory. For full details, see pages 10 to 12 of the half year report for the six months ended 30 September 2022.

As a first mover with in-depth experience operating energy storage assets, we have identified opportunities to improve safety above the current market standard. The Company's portfolio is undergoing active trials of enhanced analytical measures and hardware testing to prevent operations in unsafe conditions. Risk assessments and safety improvements are expected in the near term.

Sustainability

While the energy transition to replace fossil fuels with renewable alternatives is accelerating, global pressures on energy supplies have increased the need to support this shift. It has never been more important to provide shareholders with accurate disclosures to help them make informed decisions. The Company is committed to ensuring sustainability and transparency are embedded in its business strategy.

During the reporting period, the Company published its first ESG and Sustainability Report and, more recently, adopted the recommendations set out by the Task Force for Climate- Related Financial Disclosures (TCFD) as part of its sustainability engagement.

This follows the Company's decision to align with the EU framework on sustainability-related disclosures in financial services and is indicative of our ongoing commitment to improving climate risk management.

The Company's inaugural TCFD report is included on page 15 of the half year report for the six months ended 30 September 2022. The TCFD report covers the year ended 31 March 2022.

Fundraising

As I noted in the annual report, the Company raised £150m in April using a significantly oversubscribed share issuance, having published a prospectus on 29 March 2022. The Company has the authority to issue a further 545,454,546 shares under the prospectus and intends to use this to underwrite future growth opportunities in its pipeline.

Debt

The Company's capital structure leaves it well-placed within the current environment and without exposure to increases in debt servicing costs. We also are benefiting from higher-than-expected interest rates on our cash holdings that, in turn, have positively impacted overall dividend cover.

Board composition

As announced in the annual report, the Board has resolved to appoint a new Director and has engaged an independent recruitment agency to find candidates. The nomination and remuneration committee has held interviews and plans to provide an update in Q1 2023. In addition, the Board would like to engage in orderly succession planning with another appointment and will be looking to appoint another Director in the future.

AIFM changes

Following a review, the Company has agreed with the Investment Manager and its subsidiary, Gore Street Operational Management Limited (the "Operations Manager"), that with effect from 16 December 2022, the AIFM Agreement between the Company and the Investment Manager and the Commercial Management Agreement ("CMA") between the Company and the Operations Manager will be amended. The notice period under the CMA has been increased from 6 months to 12 months in order to align with the notice period under the AIFM Agreement. Amendments have also been made to both agreements: (i) to provide that in the specific event of a takeover offer for the Company becoming wholly unconditional, the agreements will terminate automatically with no requirement for notice to be served; and (ii) to prescribe certain fees that will then become payable to the Investment Manager and the Operations Manager on such termination. Based on the amounts involved, the changes to the AIFM Agreement and CMA constitute a smaller related party transaction as set out in the FCA's Listing Rule 11.1.10R. Further details are set out below and on page 26 of the half year report for the six months ended 30 September 2022.

Outlook

The Company's international pipeline of over 1.5 GW indicates its appetite for international expansion. North America and mainland Europe present compelling economic cases for deploying energy storage.

In the United States, the electricity grids of individual states, in many ways, act as islands, like GB, with unique challenges and opportunities. The current regulatory landscape is also becoming more favourable, with the Inflation Reduction Act introducing policies that support energy storage deployment.

As the EU looks to its member states to build out its infrastructure of renewable assets to meet decarbonisation targets, the Company intends to continue to support this transition and execute pipeline opportunities across Europe following the acquisition of the Cremzow asset in Germany.

The Investment Manager is pursuing pipeline opportunities in a range of markets to further diversify the Company's portfolio and take advantage of tangible opportunities in multiple grids. Following the addition of almost 70 MW of operational and pre-construction capacity in Texas during the reporting period, further growth across the Company's mandated geographies is planned. We look forward to providing shareholders with updates on both portfolio capacity and performance as we continue to support the global low-carbon energy transition.

Patrick Cox

Chair

15 December 2022

Investment Manager's Report

for the six months ending 30 September 2022

Results

The Company's NAV increased by 45% from the end of the last fiscal year (31 March 2022). The key drivers of the increase in NAV from £369.6 million¹ (31 March 2022) to £534.8 million (30 September 2022 NAV) were: (i) a fundraise of £147.3 million in net proceeds; (ii) acquisition of 29.9 MW in operational assets in Texas, US; (iii) acquisition of project rights totalling 39.8 MW in Texas (US); (iv) successful de-risking of projects as they progressed through their construction stages; (v) revenue forecasts updating; and (vi) strong operational performance of the assets due to efficient optimisation of the revenue stacks.

A capital raise of £150.0 million was completed during the reported period in April 2022. The Company declared dividends of 4.0 pence per share for the period and paid a total of 3.0 pence per share during the 6-month period, in line with the 7.0% of NAV dividend target. Annualised ongoing charges for the period represented 1.31% of average NAV in the period ² . The increase in Total NAV during the fiscal year is further detailed in the bridge, shown in Figure 1 of the half year report for the six months ended 30 September 2022.

Portfolio NAV drivers

During the period, portfolio NAV increased by over 30% (or £54.0 million), of which £53.1 million is due to acquisitions or capex deployment on current portfolio companies. NAV per SPV was updated to reflect operational performance during the period. The Company adjusted key valuation assumptions using reputable third-party research houses in response to the forecast changes and current macroeconomic environment.

Discount Rate

In light of increased interest rates and a higher opportunity cost for investors within the renewables sector, discount rates are on average over 1% higher across the portfolio, reflecting a weighted average discount of 9.3% compared to 8.3% in March ‑ end 2022. Further factors affecting the discount rate stem from completed acquisitions within the period, alongside the de-risking of existing portfolio capacity as it progresses from its construction phase through to commercial operations, as shown by the current 291.6 MW in operations across the portfolio.

Inflation

The short-term inflation assumption has been updated to reflect the current economic environment with rising interest rates. Over the long term, inflation was assumed to be 2% as per the Central Bank target of 2.0% across the geographies in which the Company operates. ^3,4,5,6,7

1 £369.6m is Adjusted NAV at 31 March 2022. Adjusted NAV is calculated as the NAV per the Statement of Financial Position at 31 March 2022 adjusted for the interim dividend relating to the December 2021 quarter of £6.9m, which was declared in March 2022 but paid post period end on 8 April 2022.

2 Ongoing charges include all expenses which are expected to recur in the foreseeable future, and which relate to the ongoing operation of the Company. This includes management fees, Directors' fees, audit and tax compliance fees, administration fees, depositary fees, company secretarial fees, and other recurring costs. It excludes performance fee, costs associated with portfolio transactions, and other non-recurring costs

3 https://www.bankofengland.co.uk/knowledgebank/will-inflation-in-the-uk-keep-rising

4 https://www.statista.com/statistics/306720/cpi-rate-forecast-uk/

5 https://www.bloomberg.com/news/articles/2022-07-15/us-long-term-inflation-expectations-drop-to-one-year-low?leadSource=uverify%20wall

6 https://fred.stlouisfed.org/series/T5YIFR

7 https://www.statista.com/statistics/375207/inflation-rate-in-germany/

Revenue

Revenue assumptions across the portfolio were updated to reflect the September-end energy market outlook for the grid networks in which the Company operates. In GB and Ireland, an average of the central-case forecasts from multiple independent consultants was applied to reflect a consolidated market view. Revenue forecasts capturing the current market consensus were also updated for assets located in Germany and the US.

Capital Expenses

Battery cell costs have been updated across the portfolio in line with the short-term trends seen across battery technology markets, impacting the expected repowering capex for assets once they reach their degradation threshold. An EPC contract was also secured during the reporting period for one of the Company's assets, Enderby.

Operating Expenses

The assumptions regarding operating costs across the fleet have been revised and updated in line with our latest view, including energy costs.

Revenue

The Company's portfolio is optimised across multiple revenue streams and benefits from diversification of monetisation strategies and customers (predominantly Transmission System Operators "TSOs") procuring frequency and capacity services from the Company's assets, alongside engaging in arbitrage opportunities in wholesale markets. During the reporting period, ancillary services revenues accounted for the largest portion of the Company's revenues, notably consisting of Dynamic Containment (DC) and Firm Frequency Response (FFR) in GB, DS3 Uncapped in NI, Frequency Containment Reserves in Germany and Responsive Reserve Services in Texas, US. It is important to note that some revenue streams can have severe seasonal variances as weather conditions and high temperatures impact rates. Some services can also have intermittent periods of low demand from the TSO.

Market	Market Structure	Revenue Streams	Characteristics
GB	National Grid	• Capacity Market (CM) • Firm Frequency Response (FFR) • Dynamic Containment (DC) • Dynamic Moderation (DM) • Dynamic Regulation (DR) • Wholesale Trading • Triads	• CM: Procurement of future energy capacity to ensure sufficient generation on the system
			• FFR: Balancing supply and demand of electricity to ensure that frequency remains around 50Hz
			• DC: Fast-acting post-fault service to contain frequency outside of acceptable limits
			• DM: Balancing supply and demand of electricity to ensure that frequency remains around 50Hz
			• DR: high energy throughput fast frequency response service, currently still in trail phase
			• Wholesale Trading: The trade of energy between generators and suppliers
			• Triads: Top three half-hour peaks of national energy demand across the grid
Ireland	EirGrid/SONI	• Capacity Market • DS3 Programme (comprised of): • Volume uncapped • Volume capped	• Volume uncapped: Procurement that does not limit the volume of the service being procured and to which regulated tariffs apply
			• Volume capped: Procurement where an upper limit is applied to the volume of relevant DS3 services being procured and for which prospective providers will offer a competitive price as part of their tender
			• CM: Procurement of future energy capacity to ensure sufficient generation on the system
Germany	TSOs across eight countries	• Frequency Containment Reserve (FCR) • Automatic frequency restoration reserve (currently in the prequalification phase for the asset) • Wholesale trading	• FCR: Primary ancillary service in Germany and serves to stabilise frequency deviations in the system
			• aFRR is an ancillary service procured and dispatched by the TSO responsible for frequency in a specific area.
			• Wholesale Trading: (from April 2023)
Texas, US	ERCOT	• Responsive Reserve Services (RRS) • Regulation Up (RegU) • Regulation Down (RegD)	• RRS: Used to restore the frequency of the system within the first few minutes of an event that causes a significant deviation from the standard frequency
			• RegU is an ancillary service that provides generation to the grid or signals stored power to be discharged
			• RegD is an ancillary service that reduces excess generation on the grid or stores power (i.e. charge batteries)

Table 2: Gross Revenue earned by the Company, broken down by revenue stream and by grid

Revenue Stream	(£million)	% Within the Grid	% Of overall portfolio	Average hourly revenue per MW²	Average hourly revenue per MWh²	MW	MWh
GB
Ancillary Services	£8.79	91.9%				109.7	101.0
Capacity Market (CM)	£0.59	6.1%				109.7	101.0
Wholesale Trading	£0.19	2.0%				109.7	101.0
GB - Total	£9.57	100.0%	47.4%	£19.92	£21.63	109.7	101.0
Ireland
DS3 Uncapped/Capped⁽¹⁾	£5.94	99.2%				130.0	72.6
Wholesale Trading	£0.05	0.8%				130.0	72.6
Ireland - Total	£5.99	100.0%	29.7%	£10.52	£18.84	130.0	72.6
Germany
Ancillary Services	£1.88	100.0%				22.0	29.0
Germany - Total	£1.88	100.0%	9.3%	£19.54	£14.82	22.0	29.0
US
Ancillary Services	£2.70	98.3%				29.9	59.7
Wholesale Trading	£0.05	1.7%				29.9	59.7
US - Total	£2.75	100.0%	13.6%	£20.99	£10.51	29.9	59.7
Operating Revenues	£20.19		100%	£17.74	£16.45	291.6	262.3

(1) The DS3 Revenues include accrued delays damages for Porterstown owed in the amount of the missed revenues under the DS3 Capped contract

(2) Calculated by dividing hourly revenue by the operational portfolio capacity in each grid (GB: 109.7 MW/ 101.0 MWh, Ireland: 130.0 MW / 72.6 MWh, Germany: 22.0 MW / 29.0 MWh, US: 29.0 MW / 59.7 MWh)

Drivers of revenue

As the world moves away from conventional fuels ⁽⁶⁾ , which have historically provided capacity and flexibility, in pursuit of a lower ‑ carbon future, the problem of intermittent generation arises. Energy storage is a key enabler in this energy transition. Wholesale markets and ancillary services are pegged to gas prices, and as volatility impacts this commodity, the rest of the market experiences the knock-on effect. As markets mature, grid operators seek to revolutionise the way grid frequencies are maintained and begin to disconnect gas prices from markets by introducing higher levels of renewables.

Ancillary services facilitate greater renewable penetration, but these markets quickly saturate as battery storage systems are built out. Both providers and procurers of services need to be competitive and flexible as new opportunities emerge and the characteristics of battery storage technology shape frameworks and market mechanisms previously designed for participation from conventional assets.

Long and short-duration services exist in all the markets that the Company is active in. The shorter-duration assets are better suited to the delivery of ancillary services, which are currently the Company's key focus. As the ancillary services market saturates over time with increased capacity build-out, merchant opportunities such as wholesale arbitrage, in which batteries seek to target growing spreads in power markets, are expected to take precedence.

Great Britain:

During the reporting period, revenue was predominantly derived from DC and FFR, as they offered better returns, with the capacity market adding to the revenue stack. It is expected that DC and FRR will continue to drive the bulk of revenue as both DM and DR have increased levels of activity. Merchant markets such as Balancing Mechanism and wholesale could offer additional avenues to generate revenue.

In GB, the average of the central scenario forecasts from multiple independent research houses have been applied to all GB asset valuations for ancillary services, trading, Capacity Market revenue, and other revenue sources (such as voltage revenue and TNUoS benefit). The price forecasts for ancillary services and trading are illustrated in the blended curve shown below:

Blended Curve of Ancillary Services & Trading

(£/MW/h)	Dec-22	Dec-23	Dec-24	Dec-25	Dec-30	Dec-35	Dec-40
GB (real 2021)	17.07	16.27	11.84	9.41	7.04	7.41	7.87

Ireland/Northern Ireland:

The DS3 programme is the predominant source of revenue in this market and will continue to provide future revenue.

In NI, updated price forecasts have also been applied to asset valuations for Uncapped DS3, Trading and Capacity Market revenue. The forecast prices for NI up until 2025 are driven by uncapped DS3 services, with post-DS3 services forecast post-2025. The average central forecasts from multiple third-party research houses are shown below. In ROI, the assets have DS3 Capped fixed tariff contracts in place for the first 5 years, after which there are post-DS3 services forecasts applied.

Revenue Forecasts in NI and ROI

(€/MW/h)	Dec-22	Dec-23	Dec-24	Dec-25	Dec-30	Dec-35	Dec-40
NI (real 2021)	15.94	18.14	16.93	12.13	9.16	7.68	6.96
ROI (real 2021)	6.79	6.79	6.90	9.20	8.39	7.23	6.65

Germany:

All revenue generated during the reporting period came from FCR. The Company is seeking to explore new opportunities in aFRR and wholesale trading as these markets open.

Texas, US:

RRS and wholesale market have provided the majority of revenues during the reporting period. As the Company becomes more active in the market, ancillary services such as reg-up and reg-down are expected to contribute towards the revenue stack. An additional service, FFR, was introduced in September 2022 - the Company will explore how best to access this revenue stream and evaluate its viability and profitability compared with other existing services.

6 https://www2.deloitte.com/global/en/pages/energy-and-resources/articles/the-2030-decarbonization-challenge.html

Portfolio

Assets pre-construction or in construction

The Company has made significant progress on projects yet to be operational.

During the period, the Company completed the acquisition of four pre-construction assets in Texas, US. Each of these adds an additional 9.95 MW of capacity bringing the total construction and pre-construction assets in the Company's portfolio to 606.6MW

Procurement of EPC services for the four Texas assets is underway, with the Investment Manager seeking to enhance value by grouping the assets and aligning construction schedules. The Investment Manager expects the four assets to be operational by H1 2024 calendar year.

In Great Britain, the construction of Stony (79.9 MW) and Enderby (57.0 MW) continue to progress well, with commercial operation remaining forecast for Q2 and Q4 2023, respectively. Grid connection works at Ferrymuir (50MW) have been delayed; consequently, the commercial operation is now anticipated to slip into Q2 2023.

In Ireland, commissioning at Porterstown Phase I was completed during the reported period, with verification of testing and commencement of commercial operation imminent. The asset has accrued construction delay damages since April 2022, the scheduled take over date. At Kilmannock, phase I and II preliminary engineering works has commenced ahead of procurement of grid connection works and Phase I EPC energy storage works in 2023. The Investment Manager expects commercial operation for Phase I in H2 2024. Phase II operation remains subject to confirmation of the EirGrid connection timeline but is envisaged to run concurrently with Phase I to commence operation in H1 2025.

Table 3: Summary, as of September 2022, of all sites in construction, including the location of assets, capacity (MW), construction status and the expected Commercial Operational Date (COD).

Reporting period	GB	Location	Nameplate power capacity (MW)	Construction Status	Expected COD (Calendar year)	Revenue Streams
	Ferrymuir	Fife, Scotland	50.0	Construction	June 2023	Frequency Capacity Market Energy Trading
	Enderby	Leicestershire, England	57.0	Pre-construction	December 2023	Frequency Capacity Market Energy Trading
	Stony	Buckinghamshire, England	79.9	Construction	June 2023	Frequency Capacity Market Energy Trading
	Ireland	Location	Nameplate power capacity (MW)	Construction Status	Expected COD	Revenue Streams
	Porterstown Phase 2	Co. Dublin	60.0	Pre-construction	H1 2024	DS3 Uncapped Capacity Market
	Kilmannock Phase 1	Co. Wexford	30.0	Pre-construction	H2 2024	DS3 Uncapped Capacity Market
	Kilmannock Phase 2	Co. Wexford	90.0	Pre-construction	H1 2025	DS3 Uncapped Capacity Market
	US	Location	Nameplate power capacity (MW)	Construction Status	Expected COD	Revenue Streams
	Mineral Wells	Texas	9.95	Pre-construction	H1 2024	Ancillary Services, Energy Trading
	Cedar Hill	Texas	9.95	Pre-construction	H1 2024	Ancillary Services, Energy Trading
	Wichita Falls	Texas	9.95	Pre-construction	H1 2024	Ancillary Services, Energy Trading
	Mesquite	Texas	9.95	Pre-construction	H1 2024	Ancillary Services, Energy Trading
Post period	GB	Location	Nameplate power capacity (MW)	Construction Status	Expected COD	Revenue Streams
	Middleton	GB	200.0	Pre-construction	H2 2026	Frequency, Capacity Market, Energy Trading

Operational asset performance

Average availability achieved across the portfolio (weighted by asset capacity, in MW) was 94% for the six-month period to September-end 2022. Note that this availability represents the assets' ability to be dispatched commercially, so planned maintenance acts negatively against it. This leads to lower availability calculations than the technical availability metrics tied to availability warranties.

Great Britain:

The GB fleet includes the Company's two lower-performing assets, which brought the availability average to 89% over the six-month period. All projects of 10 MW capacity or higher experienced availability of 96% or higher. When available, commercial performance of the assets was excellent. There were no issues with equipment design capability and warranty management, with unavailability attributed to planned downtime and occasional equipment faults, almost entirely rectified at the reporting period's end.

• Hulley and Lascar each achieved >98% availability with no particular outages of note. Larport's technical performance is similarly strong, with availability impacted predominantly due to unavoidable outages imposed by the network operator.

• The fleet of 10 Ancala sites performed well, although the Brook Hall site was unable to generate revenue in Dynamic Containment due to its 0.8MW size.

• Cenin performed particularly well in the period, achieving an average of 100% availability with few asset interactions required, and this level of performance is anticipated to continue.

• Breach and Lower Road also had excellent performance, with 97% availability achieved. Lower Road had downtime in April (85% availability that month) whilst earthing was replaced following a theft (future concern has been mitigated across the fleet through sophisticated security upgrades, some ongoing).

• Port of Tilbury achieved only 59% availability due to inverter issues (now resolved) impacting asset MW capacity, coupled with an imposed state of change (SOC) restriction by the cell supplier.

• Boulby achieved 21% average availability. This was due to a combination of site outages, controls outages and an extended battery recharging process following these outages. All issues have been resolved with the asset returning to service in September.

Ireland:

Both Irish operational assets, Mullavilly and Drumkee, performed well throughout the period, with an average 98% availability achieved. Downtime was mostly attributed to repair works on a circuit breaker at Drumkee, resolved in May with no ongoing concerns. Each asset performed well in DS3 throughout both quarters, passing all events which occurred without penalty for all DS3 services. The projects are set to continue operating well, with planned maintenance in October ahead of windier months in winter and spring (where revenue opportunity is highest).

Germany:

The Cremzow project is generally performing well. In July, an inverter issue with the 2MW 'trial' project (the 22MW project comprised a 2 MW trial phase with 20MW further expansion upon success) removed it from operations, with issues ongoing into the next period. This downtime was extended due to supply chain issues on inverter spare parts. Project performance was otherwise excellent, allowing the project to achieve 95% availability over the six-month period.

USA:

The three operational US-based projects in Texas-Snyder, Sweetwaterand Westover-all performed well during the period. Across each of the 9.95 MW projects, technical performance was good and averaged over 95% at Sweetwater and Westover and over 98% at Synder, with close to 97% achieved across the projects on average. This is partly due to the consistent, responsive engagement of O&M providers and asset managers for the project, as there have been some stability issues with air conditioning and inverter parts. Updates to the inverter controls have improved this during the period, and parts were replaced in October to improve inverter stability. Asset performance is expected to remain strong over the next period, with all three assets expected to comfortably meet their service requirements and capture merchant revenue where available.

Table 4: Summary, as of September 2022, of operational sites including the location of assets, nameplate capacity (MW and MWh), availability for the year and services that can be performed.

Reporting Period	GB	Location	Nameplate Power capacity (MW)	Nameplate Energy capacity (MWh)	Availability for reporting period	Services that can be performed
	Cenin	Wales	4.0	4.8	100.0%	DC, FFR, Capacity Market
	Boulby	Yorkshire	6.0	6.0	21.3%	FFR, Capacity Market, Triads
	Ancala	Mixed*	11.2	11.2	96.6%	DC, FFR, Capacity Market
	Lower Road	Essex	10.0	5.0	97.3%	DC, FFR, Energy Trading, Capacity Market
	Port of Tilbury	Essex	9.0	4.5	59.4%	DC, FFR, Capacity Market, Triads
	Larport	Hereford	19.5	19.5	87.5%	DC, FFR, Energy Trading, Capacity Market
	Lascar	Bury	20.0	20.0	99.1%	DC, FFR, Energy Trading, Capacity Market
	Hulley	Macclesfield	20.0	20.0	98.1%	DC, FFR, Energy Trading, Capacity Market
	Breach Farm	Derbyshire	10.0	10.0	97.0%	DC, FFR, Energy Trading, Capacity Market

* The Ancala asset comprises 10 smaller sites of 1.0 MW - 1.2 MW across the UK.

Ireland	Location	Nameplate Power capacity (MW)	Nameplate Energy capacity (MWh)	Availability for the reporting period	Services that can be performed
Drumkee	Co. Tyrone	50.0	21.3	96.7%	DS3 Uncapped
Mullavilly	Co. Armagh	50.0	21.3	98.6%	DS3 Uncapped
Porterstown Phase 1	Co. Dublin	30.0	30.0	n/a*	DS3 Capped, Capacity Market

Germany	Location	Nameplate Power capacity (MW)	Nameplate Energy capacity (MWh)	Availability for the reporting period	Services that can be performed
Cremzow	Cremzow	22.0	29.0	94.7%	FCR, Energy Trading
US	Location	Name Plate Power capacity (MW)	Name Plate Energy capacity (MWh)	Availability for the year	Services that can be performed
Snyder	ERCOT	9.95	19.90	98.8%	Ancillary Services, Energy Trading
Sweetwater	ERCOT	9.95	19.90	95.7%	Ancillary Services, Energy Trading
Westover	ERCOT	9.95	19.90	95.5%	Ancillary Services, Energy Trading
TOTAL		291.6	262.3	89.1%

* For the Porterstown asset in the ROI, the asset was delayed in reaching its commercial operations, thus although the site was energised, it has no applicable availability data for this period.

Strategy

Deployment

This period marked continued progress in the Company's growth and diversification strategy, with acquisitions completed in its fourth international grid network, ERCOT, totalling 69.65 MW / 139.3 MWh across a portfolio of 7 assets. Three of these projects are already operational, and four are pre-construction, which have amounted to a total investment of $39.6 million, with a further c. $28.0 million expected to be spent on the construction of the four pre-construction assets. Post-period, the Company completed the acquisition of a further 200.0 MW in GB, solidifying its position as a market leader in its existing geographies.

Following on from the EPC framework procurement of 129.8 MW for its Ferrymuir and Stony assets in March 2022, the Investment Manager procured an EPC contract for its 57.0 MW Enderby asset with NIDEC in April 2022 and is assessing EPC solutions for the remainder of its 406 MW portfolio of construction/ preconstruction assets. Taking this into account, alongside the post-period acquisition of Middleton, the deployment of capital forecast across the portfolio towards assets under construction (and expansions) now amounts to a total commitment of over £300 million.

Whilst GB remains a key focus for the Company, it is increasingly looking at new opportunities in Western Europe and the ERCOT / CAISO grids in the US, where projects are increasing in scale and number. The Investment Manager is in exclusive negotiations on projects totalling 75.0 MW / 150.0 MWh in ERCOT.

Fundraise

In April 2022, the Company raised gross proceeds of £150 million in the issuance of 136,363,636 new Ordinary Shares. The initial issue was significantly oversubscribed. The Company has 481,399,478 Ordinary Shares in issue as at the publication date.

New Market Expansion

New market opportunities present themselves following policy changes or market conditions that unveil the system's needs beyond what already exists. The Company is seeking to explore these opportunities and further understand the potential for revenue beyond the markets it is currently active in.

Pipeline

The Investment Manager has delivered on its strategic plan for international diversification, with acquisitions in new grids and a diversified pipeline across GB, Ireland, Western Europe and the United States. These markets generally rely on similar grid balancing, capacity market and trading services that characterise the GB and Irish markets. As of the date of publication, the total pipeline stands at over 1.5 GW or 2.6 GWh, with transactions in exclusivity amounting to a total of 75.0 MW or 150.0 MWh. Please see below a table illustrating the Company's top 10 projects.

Project	Location	Total Project Size (MW)	Total Project Size (MWh)
Project A	GB	99.9	99.9
Project B	GB	250.0	250.0
Project C	US, CAISO	60.0	240.0
Project D	US, CAISO	200.0	400.0
Project E	US, ERCOT	75.0	150.0
Project F	US, ERCOT	89.1	178.2
Project G	US, ERCOT	200.0	400.0
Project H	US, ERCOT	150.0	300.0
Project I	US, ERCOT	200.0	200.0
Project J	US, ERCOT	200.0	400.0
Total		1.52 GW	2.62 GWh

Outlook

Significant long-term tailwinds are driving national grids to transition towards renewable sources, evidenced by renewables growing to account for 13% of energy generation globally. ¹ The increased reliance on renewable energy sources directly propels the deployment of battery energy storage systems, which are expected to grow by 20.2% between 2022-2028. ² The structural changes required to shift to clean energy sources have been accelerated due to OECD governments passing significant legislation to ensure they remain on track to meet carbon neutrality targets.

Even with the same target of decarbonisation, each country/ area may have a different regulatory environment. Therefore, the Company recognises geographical diversification as one of the core investment strategies to address the challenges from regulatory and technological changes in the evolving energy policy climates. The Company currently holds and operates a diversified portfolio in four markets, including GB, Ireland, the US (Texas), and Germany. The Investment Manager intends to further diversify its investment pipeline with acquisitions in Western Europe and North America, GB, Australia and other developed renewable energy markets. The acquisition price of any single project can not exceed 25% of the Company's Gross Asset Value (calculated at the time of acquisition) to maintain the diversification of the portfolio.

The portfolio is further diversified through multiple stackable revenue streams, which could be either under long-term contract or merchant. Due to the flexible nature of the Lithium-ion batteries, the Investment Manager is able to take advantage of a variety of contracts depending on prevailing market conditions. The Company is also comfortable with 100% merchant revenue as it has built its in ‑ house technical team to capture the market opportunities.

The specialist technical team minimise Opex, whilst optimising a revenue stacking strategy across the portfolio. In addition, by securing competitively priced EPC contracts, the Investment Manager ensures a solid foundation for generating target project returns.

The current macroeconomic climate has introduced potential headwinds such as rising short-term inflation, high FX volatility and rising construction costs. The Investment Manager has taken proactive measures to ensure that the impact on the overall portfolio valuation is limited by using economies of scale, securing competitively priced EPC contracts, minimising debt exposure and investing across the OECD to create natural hedges against FX volatility. As a result, the Investment Manager is confident of the Company's ability to deliver long-term capital growth to investors through the construction, operation, and optimisation of a geographically diverse portfolio of utility-scale battery storage systems.

Despite such headwinds, the Investment Manager's experience and track record in acquiring, constructing and operating utility-scale storage assets across numerous grids means that it is well placed to capitalise on future opportunities through deployment of capital across relevant projects which fulfil its mandate. The Investment Manager believes that the macro and market fundamentals underpinning renewable energy proliferation globally, combined with the decline in baseload capacity and increasing relevance of national energy security necessitate a requirement for flexible storage assets to provide this wider system stability.

Europe:

As the EU positions itself as a beacon for renewable deployment, it encourages member states to continue to build out capacity, imposing targets to deliver on milestones. Further, there is an accelerated need to build out renewable projects for certain member states that had been previously more reliant on Russian gas imports.

United States:

CAISO, the ISO covering the majority of California, and other neighbouring states, has introduced policies that support energy storage deployment and an energy storage target of 41 GW by 2045 (including 37GW of battery energy storage and 4GW of long-duration storage). CAISO differs from ERCOT as it is connected with neighbouring ISO networks - this allows for the flow of energy in and out of the region; however, these interconnection lines have limited capacity. More recently, build-out of renewables has caused an imbalance between times of peak energy demand and renewable energy generation which the deployment of energy storage is aiming to normalise.

After the reporting period, the Company acquired the project rights for a 200 MW project located in Heysham, United Kingdom. It is anticipated that this project will participate in the GB market across ancillary services, wholesale trading and capacity market. The project will connect to National Grid's main transmission network rather than the local distribution network, meaning it will operate independently from an intermediary distribution network operator, potentially opening additional revenue opportunities. Grid connection is expected to be no later than Q4 2026. However, the Company will seek to accelerate the connection date while maintaining a cost-efficient EPC procurement process. The final capex will depend on the selection of the system duration. The project has the flexibility to deploy a storage system with a duration of up to two hours.

1 https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2022-full-report.pdf

2 https://www.businesswire.com/news/home/20220923005452/en/Batteries-for-Solar-Energy-Storage-Market-Forecast-to-2028---Global-Analysis-By-Battery-Type-Application-and-Connectivity---Decline-in-Prices-of-Lithium-Ion-Batteries---ResearchAndMarkets.com

Directors' Interim Report

Amendments to AIFM agreement and Commercial Management Agreement

The Company has agreed with the Investment Manager and its subsidiary, Gore Street Operational Management Limited (the "Operations Manager"), that with effect from 16 December 2022, the AIFM Agreement between the Company and the Investment Manager and the Commercial Management Agreement ("CMA") between the Company and the Operations Manager will be amended to make the following changes. The notice period under the CMA is increased from 6 months to 12 months with immediate effect in order to align with the notice period under the AIFM Agreement.

The AIFM Agreement has been amended to provide that in the specific event of a takeover offer for the Company becoming wholly unconditional the AIFM Agreement will terminate automatically with no requirement for notice to be served and:

• the Investment Manager will be entitled to a performance fee equal to 20 per cent. of the amount (if any) by which the offer price multiplied by the number of ordinary shares in issue exceeds the prescribed benchmark for payment of a performance fee, such fee to be capped at 3.49% of NAV in the financial year to 31 March 2023 and 3.99% of NAV thereafter (the 'Exit Performance Fee') plus a fee equal to 1 per cent. of Adjusted NAV ⁹ ; or

• where no Exit Performance Fee is payable, the Investment Manager will instead be entitled to a fee equal to 2 per cent. of Adjusted NAV (the 'Minimum Takeover Fee').

If the aggregate amount of any Exit Performance Fee payable plus 1 per cent. of Adjusted NAV is less than the Minimum Takeover Fee, then the Investment Manager shall instead receive the Minimum Takeover Fee.

The Board has further agreed to amend the terms of the Commercial Management Agreement between the Operations Manager and the Company from today to provide that, in the event of a takeover offer for the Company becoming wholly unconditional, the CMA will terminate automatically with no requirement for notice to be served and the Operations Manager will be entitled to receive:

• where an Exit Performance Fee is paid under the AIFM Agreement, a fee equal to one per cent. of NAV; or

• where no Exit Performance Fee is paid under the AIFM Agreement, a fee equal to two per cent. of NAV.

The Board has agreed these changes in recognition of the fact that the Investment Manager and its subsidiary have created significant value for shareholders in the form of the Company's existing portfolio, which may be attractive to potential acquirors. In the event that a takeover offer is accepted at a premium to the benchmark it is the Board's view that the Investment Manager should share some element of this additional value created.

Furthermore, the Investment Manager and its subsidiary have and continue to invest a significant amount of resources and capital building a portfolio management, technical and operational team to service the Company, its subsidiaries and its assets as it grows both in GB and internationally.

Principal Risks and Uncertainties

The principal risks and uncertainties with the Company's business fall into the following categories: COVID-19, Changes to Market Design, Inflation, Exposure to Lithium-Ion Batteries and Battery Manufacturers, Key Skills Retention, Dependence on Long-Term Operations and Maintenance Contracts, Valuation of Unquoted Assets, Delays in Grid Energisation or Commissioning, Currency Exposure, Cyber-Attack and Loss of Data, and Insurability of Assets. A detailed explanation of the risks and uncertainties in each of these categories can be found on pages 58 to 61 of the Company's published annual report and accounts for the year ended 31 March 2022.

These risks and uncertainties have not materially changed during the six months ended 30 September 2022. However, the Board has noted that geopolitical factors continued to create uncertainties, including relating to energy policy, supply chains and interest rates.

Going Concern

Having assessed the principal risks and uncertainties, and the other matters discussed in connection with the viability statement as set out on page 66 of the published annual report and accounts for the year ended 31 March 2022, the Directors consider it appropriate to adopt the going concern basis in preparing the accounts.

9 For these purposes, "Adjusted Net Asset Value" shall be equal to Net Asset Value, minus Uncommitted Cash; and "Uncommitted Cash" means all cash on the Company balance sheet that has not been allocated for repayment of a liability on the balance sheet or any earmarked capital costs of any member of the Group.

Although the Company's articles of association require that a proposal for the continuation of the Company be put forward at the Company's next AGM due to be held after the publication of the Company's annual report for the year ended 31 March 2023, the Directors have no reason to believe that such a resolution will not be passed by shareholders.

Related Party Transactions

There have been no transactions with related parties that have materially affected the financial position or the performance of the Company during the six months ended 30 September 2022.

As noted above, the amendments to the AIFM agreement and Commercial Management Agreement agreed after the end of the reporting period constitute a smaller related party transaction.

Directors' Responsibility Statement

The Directors confirm that, to the best of their knowledge, this set of condensed financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting and with the Statement of Recommended Practice, "Financial Statements of Investment Companies and Venture Capital Trusts" issued in July 2022, and that this half year report includes a fair review of the information required by 4.2.7R and 4.2.8R of the FCA's Disclosure Guidance and Transparency Rules.

Patrick Cox

Chair

Independent Auditor's Review Report

to Gore Street Energy Storage Fund Plc

Conclusion

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2022 which comprises the Interim Condensed Statement of Comprehensive Income, the Interim Condensed Statement of Financial Position, the Interim Condensed Statement of Changes in Equity, the Interim Condensed Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2022 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" (ISRE) issued by the Financial Reporting Council. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting".

Conclusions Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis of Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of the Directors

The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the Directors are responsible for assessing the 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 Directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Ernst & Young LLP

Edinburgh

15 December 2022

Interim Condensed Financial Statements

Interim Condensed Statement of Comprehensive Income

For the Interim period ended 30 September 2022

		1 April 2022 to 30 September 2022			1 April 2021 to 30 September 2021
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	(£)	(£)	(£)	(£)	(£)	(£)
Net gain on investments at fair value through profit and loss		-	23,905,375	23,905,375	-	11,096,979	11,096,979
Investment income		2,575,055	-	2,575,055	1,969,922	-	1,969,922
Administrative and other expenses		(3,795,540)	-	(3,795,540)	(2,261,238)	-	(2,261,238)
(Loss)/profit before tax		(1,220,485)	23,905,375	22,684,890	(291,316)	11,096,979	10,805,663
Taxation	4	-	-	-	-	-	-
(Loss)/profit after tax and profit for the period		(1,220,485)	23,905,375	22,684,890	(291,316)	11,096,979	10,805,663
Total comprehensive income for the period		(1,220,485)	23,905,375	22,684,890	(291,316)	11,096,979	10,805,663
Profit per share (basic and diluted) - pence per share	5			4.81			4.20

All Revenue and Capital items in the above statement are derived from continuing operations.

The Total column of this statement represents Company's Income Statement prepared in accordance with UK adopted International Accounting Standards. The total profit after tax for the period is the total comprehensive income and therefore no additional statement of other comprehensive income is presented.

The supplementary revenue and capital columns are presented for information purposes in accordance with the Statement of Recommended Practice issue by the Association of Investment Companies.

The notes below and on pages 34 to 44 of the half year report for the six months ended 30 September 2022 form an integral part of these financial statements.

Interim Condensed Statement of Financial Position

As at 30 September 2022

Company Number 11160422

		30 September 2022	31 March 2022
	Notes	(£)	(£)
Non - Current Assets
Investments at fair value through profit or loss	6	231,567,953	180,762,419
		231,567,953	180,762,419
Current assets
Cash and cash equivalents		162,941,390	198,047,440
Short-term investments	8	140,000,000	-
Trade and other receivables		1,138,459	46,476
		304,079,849	198,093,916
Total assets		535,647,802	378,856,335
Current liabilities
Trade and other payables		854,383	2,375,241
		854,383	2,375,241
Total net assets		534,793,419	376,481,094
Shareholders equity
Share capital	10	4,813,995	3,450,358
Share premium	10	415,686,632	269,708,123
Special reserve	10	186,656	186,656
Capital reduction reserve	10	30,544,181	42,258,892
Capital reserve	10	88,662,967	64,757,592
Revenue reserve	10	(5,101,012)	(3,880,527)
Total shareholders equity		534,793,419	376,481,094
Net asset value per share	9	1.11	1.09

The annual financial statements were approved and authorised for issue by the Board of Directors and are signed on its behalf by:

Patrick Cox

Chair

Date: 15 December 2022

The notes below and on pages 34 to 44 of the half year report for the six months ended 30 September 2022 form an integral part of these financial statements.

Interim Condensed Statement of Changes in Equity

For the Period Ended 30 September 2022

	Share capital (£)	Share premium reserve (£)	Special reserve (£)	Capital reduction reserve (£)	Capital reserve (£)	Revenue reserve (£)	Total shareholders equity (£)
As at 1 April 2022	3,450,358	269,708,123	186,656	42,258,892	64,757,592	(3,880,527)	376,481,094
Profit/(loss) for the period	-	-	-	-	23,905,375	(1,220,485)	22,684,890
Total comprehensive income/(loss) for the period	-	-	-	-	23,905,375	(1,220,485)	22,684,890
Transactions with owners
Ordinary shares issued at a premium during the period	1,363,637	148,636,363	-	-	-	-	150,000,000
Share issue costs	-	(2,657,854)	-	-	-	-	(2,657,854)
Dividends paid	-	-	-	(11,714,711)	-	-	(11,714,711)
As at 30 September 2022	4,813,995	415,686,632	186,656	30,544,181	88,662,967	(5,101,012)	534,793,419

Capital reduction reserve and revenue reserves are available to the Company for distributions to Shareholders as determined by the Directors.

For the Period Ended 30 September 2021

	Share capital (£)	Share premium reserve (£)	Special reserve (£)	Capital reduction reserve (£)	Capital reserve (£)	Revenue reserve (£)	Total shareholders equity (£)
As at 1 April 2021	1,438,717	107,713,725	186,656	17,446,348	21,226,187	(2,876,692)	145,134,941
Profit/(loss) for the period	-	-	-	-	11,096,979	(291,316)	10,805,663
Total comprehensive income/(loss) for the period	-	-	-	-	11,096,979	(291,316)	10,805,663
Transactions with owners
Ordinary shares issued at a premium during the period	1,323,529	133,676,471	-	-		-	135,000,000
Share issue costs	-	(2,874,699)	-	-		-	(2,874,699)
Dividends paid	-	-	-	(2,762,247)		-	(2,762,247)
As at 30 September 2021	2,762,246	238,515,497	186,656	14,684,101	32,323,166	(3,168,008)	285,303,658

Capital reduction reserve and revenue reserves are available to the Company for distributions to Shareholders as determined by the Directors.

The notes below and on pages 34 to 44 of the half year report for the six months ended 30 September 2022 form an integral part of these financial statements.

Interim Condensed Statement of Cash Flows

For the Period Ended 30 September 2022

Notes	1 April 2021 to 30 September 2022 (£)	1 April 2020 to 30 September 2021 (£)
Cash flows used in operating activities provided by
Profit for the period	22,684,890	10,805,663
Net gain on investments at fair value through profit and loss	(23,905,375)	(11,096,979)
(Increase)/decrease in trade and other receivables	(1,091,983)	4,348,473
Decrease in trade and other payables	(1,520,858)	(731,834)
Net cash (used in)/generated from operating activities provided by	(3,833,326)	3,325,323
Cash flows used in investing activities
Purchase of investments	(26,900,159)	(20,279,016)
Purchase of short-term investments	(140,000,000)	-
Net cash used in investing activities	(166,900,159)	(20,279,016)
Cash flows used in financing activities provided by
Proceeds from issue of ordinary shares at a premium	150,000,000	135,000,000
Share issue costs	(2,657,854)	(2,874,699)
Dividends paid	(11,714,711)	(2,762,247)
Net cash inflow from financing activities	135,627,435	129,363,054
Net (decrease)/increase in cash and cash equivalents for the period	(35,106,050)	112,409,361
Cash and cash equivalents at the beginning of the period	198,047,440	60,152,317
Cash and cash equivalents at the end of the period	162,941,390	172,561,678

During the period, interest received by the Company totalled £2,575,055 (2021: £1,969,922).

The notes below and on pages 34 to 44 of the half year report for the six months ended 30 September 2022 form an integral part of these financial statements.

Notes to the Interim Condensed Financial Statements

For the Period Ended 30 September 2022

1. General information

Gore Street Energy Storage Fund plc (the "Company") was incorporated in England and Wales on 19 January 2018 with registered number 11160422. The registered office of the Company is First Floor, 16-17 Little Portland Street, London, W1W 8BP.

Its share capital is denominated in Pound Sterling (GBP) and currently consists of ordinary shares. The Company's principal activity is to invest in a diversified portfolio of utility scale energy storage projects primarily located in the UK and the Republic of Ireland, although the Company has recently acquired projects in North America and Germany.

2. Basis of preparation

STATEMENT OF COMPLIANCE

The half yearly condensed financial statements for the period 1 April 2022 to 30 September 2022 have been prepared in accordance with IAS 34 Interim Financial Reporting, and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

The half yearly financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Company's annual financial statements as at 31 March 2022.

The same accounting policies, presentation and methods of computation are followed in these condensed financial statements as were applied in the preparation of the Company's annual financial statements for the year ended 31 March 2022. These accounting policies will be applied in the Company's financial statements for the year ended 31 March 2023.

The financial statements have been prepared on a historical cost basis except for the investments which are accounted for at fair value through profit or loss. The Company is an investment entity in accordance with IFRS 10 which holds all its subsidiaries at fair value and therefore prepares separate accounts only and does not prepare consolidated financial statements for the Company.

The financial information for the year ended 31 March 2022 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The Independent Auditor's Report on those accounts contained no qualification or statement under Section 498 (2), (3) or (4) of the Companies Act 2006.

The financial information contained in this Half Year Report does not constitute statutory accounts as defined in Sections 434-436 of the Companies Act 2006. The financial information for the six months ended 30 September 2022 and 30 September 2021 has not been audited by the Company's external auditor.

The financial statements do not contain any operating segment information on the basis that there is only one reportable segment.

FUNCTIONAL AND PRESENTATION CURRENCY

The currency of the primary economic environment in which the Company operates (the functional currency) is Pound Sterling ("GBP or £") which is also the presentation currency.

GOING CONCERN

The going-concern analysis assumes continued annual expenditure at the rate of current expenditure and continued discretionary dividend payments to shareholders at the target annual rate of 7% of NAV subject to a minimum target rate of 7 pence per Ordinary Share. With expenditure and discretionary dividends assumed unchanged, the Company will continue to be operational and will have excess cash after payment of its liabilities for at least 12 months until 31 December 2023. Although the Company's articles of association require that a proposal for the continuation of the Company be put forward at the Company's next AGM due to be held after the publication of the Company's annual report for the year ended 31 March 2023, the Directors have no reason to believe that such a resolution will not be passed by shareholders.

As at 30 September 2022, the Company had net current assets of £303.23 million including cash balances of £162.94 million (excluding cash balances within investee companies) and short term investments of £140 million, which are sufficient to meet current obligations as they fall due. The major cash outflows of the Company are the payment of dividends and costs relating to the acquisition of new assets, both of which are discretionary. The Company is a guarantor to GSES1 Limited's £15m revolving credit facility with Santander. The Company had no outstanding debt as of 30 September 2022.

The Directors acknowledge their responsibilities in relation to the financial statements for the half year ended 30 September 2022 and the preparation of the financial statement on a going concern basis remains appropriate and the Company expects to meet its obligations as and when they fall due for at least 12 months until 31 December 2023.

3. Significant accounting judgements, estimates and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Estimates and underlying 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 periods affected.

During the period the Directors considered the following significant judgements, estimates and assumptions:

ASSESSMENT AS AN INVESTMENT ENTITY

Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries at fair value through profit or loss rather than consolidate them unless they provided investment related services to the Company. To determine that the Company continues to meet the definition of an investment entity, the Company is required to satisfy the following three criteria:

a) the Company obtains funds from one or more investors for the purpose of providing those investors with investment management services;

b) the Company commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

c) the Company measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Company meets the criteria as follows:

• the stated strategy of the Company is to deliver stable returns to shareholders through a mix of 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.

Having assessed the criteria above and in their judgement, the Directors are of the opinion that the Company has all the typical characteristics of an investment entity and continues to meet the definition in the standard. This conclusion will be reassessed on an annual basis.

VALUATION OF INVESTMENTS

Significant estimates in the Company's financial statements include the amounts recorded for the fair value of the investments. By their nature, these estimates and assumptions are subject to measurement uncertainty and the effect on the Company's financial statements of changes in estimates in future periods could be significant. These estimates are discussed in more detail in note 7.

4. Taxation

The Company is recognised as an Investment Trust Company ("ITC") for accounting periods beginning on or after 25 May 2018 and is taxed at the main rate of 19%.

	30 September 2022 (£)	30 September 2021 (£)
(a) Tax charge in profit and loss account
UK Corporation tax	-	-
(b) Reconciliation of the tax charge for the period
Profit before tax	22,684,890	10,805,663
Tax at UK standard rate of 19%	4,310,129	2,053,076
Effects of:
Unrealised gain on fair value investments	(4,542,021)	(2,108,426)
Expenses not deductible for tax purposes	6,026	861
Other differences	-	5,700
Deferred tax not recognised	225,866	48,789
Tax charge for the period	-	-
Estimated losses not recognised due to insufficient evidence of future profits	3,338,021	903,422
Estimated deferred tax thereon 25% (2021: 25%)	834,505	225,855

As at 30 September 2022, the Company has excess management expenses that are available to offset future tax revenues. A deferred tax asset, measured at the prospective corporate rate of 25% (2021: 25%) of £834,505 (2021: £225,855) has not been recognised in respect of these expenses since they are recoverable only to the extent that the Company has sufficient future taxable revenue.

5. Earnings per share

Earnings per share (EPS) amounts are calculated by dividing the profit or loss 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 earnings per share are identical.

	30 September	30 September
	2022	2021
Net gain attributable to ordinary shareholders	£22,684,890	£10,805,663
Weighted average number of ordinary shares for the period	471,712,444	257,420,379
Profit per share - Basic and diluted (pence)	4.81	4.20

6. Investments

		Percentage	30 September	30 September
	Place of business	ownership	2022	2021
GSES1 Limited ("GSES1")	England & Wales	100%	231,567,953	112,070,270

The Company meets the definition of an investment entity. Therefore, it does not consolidate its subsidiaries or equity method account for associates but, rather, recognises them as investments at fair value through profit or loss. The Company is not contractually obligated to provide financial support to the subsidiaries and associate and there are no restrictions in place in passing monies up the structure.

The investment in GSES1 is financed through equity and a loan facility available to GSES1. The facility may be drawn upon, to any amount agreed by the Company as lender, and is available for a period of 20 years from 28 June 2018. The rest is funded through equity. The amount drawn on the facility at 30 September 2022 was £142,909,431 (31 March 2022: £116,009,272). The loan is interest bearing and attracts interest at 5% per annum. Investments in the indirect subsidiaries are also structured through loan and equity investments and the ultimate investments are in energy storage facilities.

Realisation of increases in fair value in the indirect subsidiaries will be passed up the structure as distributions on the equity investment. The Company holds a direct investment in GSES 1, which in turn holds investments in various holding companies and operating assets as detailed in Note 6 below.

			Percentage
	Immediate Parent	Place of business	Ownership	Investment
GSF Albion Limited ("GSF Albion")	GSES1	England & Wales	100%
NK Boulby Energy Storage Limited	GSF Albion	England & Wales	99.998%	Boulby
Kiwi Power ES B	GSF Albion	England & Wales	49%	Cenin
Ferrymuir Energy Storage Limited	GSF Albion	England & Wales	100%	Ferrymuir
GSF England Limited ("GSF England")	GSES1	England & Wales	100%
OSSPV001 Limited	GSF England	England & Wales	100%	Lower Road and Port of Tilbury
Ancala Energy Storage Limited	GSF England	England & Wales	100%	Beeches, Blue House Farm, Brookhall, Fell View, Grimsargh, Hermitage, Heywood Grange, High Meadow, Hungerford, Low Burntoft
Breach Farm Energy Storage Limited	GSF England	England & Wales	100%	Breach Farm
Hulley Road Energy Storage Limited	GSF England	England & Wales	100%	Hulley Road
Larport Energy Storage Limited	GSF England	England & Wales	100%	Larport
Lascar Battery Storage Limited	GSF England	England & Wales	100%	Lascar
Stony Energy Storage Limited	GSF England	England & Wales	100%	Stony
Enderby Battery Storage Limited	GSF England	England & Wales	100%	Enderby
GSF IRE Limited ("GSF IRE")	GSES1	England & Wales	100%
Mullavilly Energy Limited	GSF IRE	Northern Ireland	51%	Mullavilly
Drumkee Energy Limited	GSF IRE	Northern Ireland	51%	Drumkee
Porterstown Battery Storage Limited	GSF IRE	Republic of Ireland	51%	Kilteel
Kilmannock Battery Storage Limited	GSF IRE	Republic of Ireland	51%	Kilmannock
GSF Atlantic Limited ("GSF Atlantic")	GSES1	England & Wales	100%
GSF Americas Inc. ("GSF Americas") ⁽¹⁾	GSF Atlantic	North America	100%
GSF Green Power Cremzow Gmbh & Co KG	GSF Atlantic	Germany	90%	Cremzow
GSF Green Power Cremzow Verwaltungs GmbH	GSF Atlantic	Germany	90%	Cremzow
Snyder ESS Assets, LLC ⁽¹⁾	GSF Americas	North America	100%	Snyder
Sweetwater ESS Assets, LLC ⁽¹⁾	GSF Americas	North America	100%	Sweetwater
Westover ESS Assets, LLC ⁽¹⁾	GSF Americas	North America	100%	Westover
Mineral Wells ESS Assets, LLC ⁽¹⁾	GSF Americas	North America	100%	Mineral Wells
Cedar Hill ESS Assets, LLC ⁽²⁾	GSF Americas	North America	100%	Cedar Hill
Wichita Falls ESS Assets, LLC ⁽²⁾	GSF Americas	North America	100%	Wichita Falls
Mesquite ESS Assets, LLC ⁽²⁾	GSF Americas	North America	100%	Mesquite

(1) The acquisition of Snyder ESS Assets, LLC, Sweetwater ESS Assets, LLC, Westover ESS Assets, LLC and Mineral Wells ESS Assets, LLC was completed on 22 April 2022.

(2) The acquisition of Cedar Hill ESS Assets, LLC, Wichita Falls ESS Assets, LLC and Mesquite ESS Assets, LLC was completed on 26 August 2022.

All subsidiaries that have a place of business in England & Wales and Northern Ireland, with the exception of GSES 1, are registered at 8th Floor, 100 Bishopsgate, London, EC2N 4AG from 5 September 2022 (18th Floor, The Scalpel, 52 Lime Street, London, EC3M 7AF up until 5 September 2022).

GSES 1 is registered at 1st Floor, 16-17 Little Portland, London, England, W1W 8BP from 5 September 2022 (18th Floor, The Scalpel, 52 Lime Street, London, EC3M 7AF up until 5 September 2022).

All subsidiaries that have a place of business in Republic of Ireland are registered at 4th Floor, 76 Lower Baggot Street, Dublin 2 from 5 September 2022 (Block C, 77 Sir John Rogerson's Quay, Dublin, D02 VK60, Republic of Ireland up until 5 September 2022).

GSF Cremzow GmbH & Co KG and GSF Cremzow Verwaltungs GmbH are registered at Schenkenberg, Gut Dauerthal 3, 17291.

All subsidiaries with a place of business in North America are registered at 2093A Philadelphia Pike, Suite 312, Claymont, DE 19703.

7. Fair Value measurement

VALUATION APPROACH AND METHODOLOGY

There are three traditional valuation approaches that are generally accepted and typically used to establish the value of a business; the income approach, the market approach and the net assets (or cost based) approach. Within these three approaches, several methods are generally accepted and typically used to estimate the value of a business.

The Company has chosen to utilise the income approach, which indicates value based on the sum of the economic income that an asset, or group of assets, is anticipated to produce in the future. Therefore, the income approach is typically applied to an asset that is expected to generate future economic income, such as a business that is considered a going concern. Free cash flow to total invested capital is typically the appropriate measure of economic income. The income approach is the DCF approach and the method discounts free cash flows using an estimated discount rate (WACC).

VALUATION PROCESS

In the period the Company acquired 69.65 MW in ERCOT from Perfect Power LLC across seven projects in total, each of 9.95MW. This brings the Company's portfolio of energy storage assets to a total capacity of 698.2 MW (March 2022: 628.5 MW). As at 30 September 2022, 291.6 MW of the Company's total portfolio was operational and 406.6 MW pre‑operational (the "Investments").

The Investments comprise twenty seven projects, all of these are based in the UK, the Republic of Ireland, mainland Europe or North America. The Directors review and approve these valuations following appropriate challenge and examination. The current portfolio consists of non-market traded investments and valuations are analysed using forecasted cash flows of the assets and used the discounted cash flow approach as the primary approach for the purpose of the valuation. The Company engages external, independent and qualified valuers to determine or review the fair value of certain of the Company's investments.

As at 30 September 2022, the fair value of any investment held with a value greater than 2.2% of the total net asset value of the portfolio, have been determined, (presented by the Investment Advisor and reviewed) by BDO LLP and further presented and reviewed by the Company's Board of Directors.

The fair value of all other investments have been determined by the Investment Advisor and presented directly to and reviewed by the Company's Board of Directors.

The below table summarises the significant unobservable inputs to the valuation of investments.

		Significant Inputs		Fair Value
Investment Portfolio	Valuation technique	Description	(Range)	30 September 2022 (£)	31 March 2022 (£)
Great Britain (excluding Northern Ireland)	DCF	Discount Rate	7% - 10%	101,970,831	89,350,935
		Revenue/MW/hour	£5 - £20
Northern Ireland	DCF	Discount Rate	8% - 9%	53,469,138	57,076,847
		Revenue/MW/hour	€5 - €20
Republic of Ireland	DCF	Discount Rate	8% - 10%	25,420,739	17,595,232
		Revenue/MW/hour	€5 - €15
Other OECD	DCF	Discount Rate	9%	46,953,608	12,583,705
		Revenue/MW/hour	€5 - €30 /
Holding Companies	NAV		$10 - $30	3,753,637	4,155,700
Total Investments				231,567,953	180,762,419

The fair value of the holding companies represents the net current assets including cash, held within those companies in order to settle any operational costs.

SENSITIVITY ANALYSIS

The below table reflects the range of sensitivities in respect of the fair value movements of the Company's investments.

		Significant Inputs		Estimated effect on Fair Value
				30 September	31 March
	Valuation			2022	2022
Investment Portfolio	technique	Description	Sensitivity	(£)	(£)
Great Britain (excluding Northern Ireland)	DCF	Revenue	+ 10%	22,262,000	46,600,000
			- 10%	(22,767,000)	(28,312,000)
		Discount rate	+1%	(11,178,000)	(12,378,000)
			-1%	12,765,000	14,357,000
Northern Ireland	DCF	Revenue	+ 10%	5,374,000	9,984,000
			- 10%	(5,325,000)	(10,034,000)
		Discount rate	+1%	(3,236,000)	(3,226,000)
			-1%	3,687,000	3,675,000
Republic of Ireland	DCF	Revenue	+ 10%	5,359,000	4,404,000
			- 10%	(9,351,000)	(4,937,000)
		Discount rate	+1%	(6,227,000)	(3,242,000)
			-1%	7,300,000	3,772,222
Other OECD	DCF	Revenue	+ 10%	5,010,000	3,698,000
			- 10%	(5,187,000)	(4,465,000)
		Discount rate	+1%	(1,833,000)	(704,000)
			-1%	2,069,000	804,000

High case (+10%) and low case (-10%) revenue information used to determine sensitivities are provided by third party pricing sources.

VALUATION OF FINANCIAL INSTRUMENTS

The investments at fair value through profit or loss are Level 3 in the fair value hierarchy and the reconciliation in the movement of this Level 3 investment is presented below. No transfers between levels took place during the period.

	30 September	31 March
	2022	2022
Reconciliation	(£)	(£)
Opening balance	180,762,419	80,694,275
Purchases during the period/year	26,900,159	56,536,739
Total fair value movement through profit and loss	23,905,375	43,531,405
	231,567,953	180,762,419

A minority shareholder of Boulby has a right to receive a certain share of Boulby distributions once NK Energy Solutions realises excess return over an agreed hurdle return from its investment into Boulby.

Based on free cash flow forecast used to compute the net asset value of Boulby for this period, it is not expected to reach the threshold return and thus no payment to the minority shareholder is taken into account. However, if the actual cash flow significantly exceeds the forecast cash flow used for current net asset value, a part of the excess cash flow may be distributed to the minority shareholder, impacting the ultimate fair value.

8. Short-term investments

Short-term investments include cash deposits held with Barclays Bank plc and Santander UK plc, both reputable financial institutions each with a Moody's credit rating of A1. Both deposits have a maturity period of 6 months, £100m maturing in November 2022 and £40m maturing in January 2023. As at 30 September 2022, the total short-term investments amounted to £140m (2021: £nil).

9. Net asset value per share

Basic NAV per share is calculated by dividing the Company's net assets as shown in the Statement of Financial Position that are attributable to the ordinary equity holders of the Company by the number of ordinary shares outstanding at the end of the period. As there are no dilutive instruments outstanding, basic and diluted NAV per share are identical.

	30 September	31 March
	2022	2022
Net assets per Statement of Financial Position	£534,793,419	£376,481,094
Ordinary shares in issue as at 30 September/31 March	481,399,478	345,035,842
NAV per share - Basic and diluted (pence)	111.09	109.11

10. Share capital and reserves

		Share		Capital
	Share	premium	Special	reduction	Capital	Revenue
	capital	reserve	reserve	reserve	reserve	reserve	Total
	(£)	(£)	(£)	(£)	(£)	(£)	(£)
At 1 April 2021	3,450,358	269,708,123	186,656	42,258,892	64,757,592	(3,880,527)	376,481,094
Issue of ordinary £0.01 shares: 14 April 2022	1,363,637	148,636,363	-	-	-	-	150,000,000
Share issue costs	-	(2,657,854)	-	-	-	-	(2,657,854)
Dividends paid	-	-	-	(11,714,711)	-	-	(11,714,711)
Profit/(loss) for the period	-	-	-	-	23,905,375	(1,220,485)	22,684,890
At 30 September 2022	4,813,995	415,686,632	186,656	30,544,181	88,662,967	(5,101,012)	534,793,419

		Share		Capital
	Share	premium	Special	reduction	Capital	Revenue
	capital	reserve	reserve	reserve	reserve	reserve	Total
	(£)	(£)	(£)	(£)	(£)	(£)	(£)
At 1 April 2021	1,438,717	107,713,725	186,656	17,446,348	21,226,187	(2,876,692)	145,134,941
Issue of ordinary £0.01 shares: 27 April 2021	1,323,529	133,676,471	-	-	-	-	135,000,000
Issue of ordinary £0.01 shares: 4 October 2021	688,112	72,939,893	-	-	-	-	73,628,005
Transfer to capital reduction reserve⁽¹⁾	-	(40,000,000)	-	40,000,000	-	-	-
Share issue costs	-	(4,621,966)	-	-	-	-	(4,621,966)
Dividends paid	-	-	-	(15,187,456)	-	-	(15,187,456)
Profit/(loss) for the year	-	-	-	-	43,531,405	(1,003,835)	42,527,570
At 31 March 2022	3,450,358	269,708,123	186,656	42,258,892	64,757,592	(3,880,527)	376,481,094

(1) Following the approval at the Company's AGM on the 6 September 2021, the Company made an application to the High Court, together with a lodgement of the Company's statement of capital with the Registrar of Companies, the Company was permitted to reduce the capital of the Company by an amount of £40,000,000. This was affected on the 15 December 2021 by a transfer of that amount from the share premium account to distributable reserves.

SHARE ISSUES

On 14 April 2022, the Company issued 136,363,636 ordinary shares at a price of 101 pence per share, raising net proceeds from the Placing of £150,000,000.

11. Dividends

		30 September	30 September
	Dividend	2022	2021
	per share	(£)	(£)
Dividends paid during the period
For the 3 month period ended 31 March 2021	1 pence	-	2,762,247
For the 3 month period ended 31 December 2021	2 pence	6,900,716	-
For the 3 month period ended 31 March 2022	1 pence	4,813,995	-
		11,714,711	2,762,247

An interim dividend of 2 pence for the period 1 October 2021 to 31 December 2021 was proposed by the Directors, and subsequently paid on the 8 April 2022.

An interim dividend of 1 pence for the period 1 January 2022 to 31 March 2022 was proposed by the Directors and subsequently paid on 26 August 2022.

12. Transactions with related parties

Since the listing of the ordinary shares in 2018, 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.

Details of related parties are set out below:

DIRECTORS

With effect from 1 July 2022, Patrick Cox, Chair of the Board of Directors of the Company, is paid a Director's remuneration of £75,000 per annum, (2021: £57,500), Caroline Banszky is paid a Director's remuneration of £55,000 per annum, (2021: £45,000) with the remaining Directors being paid Directors' remuneration of £45,000 per annum, (2021: 40,000).

Total Director's remuneration and associated employment costs of £106,890 were incurred in respect of the period with £nil being outstanding and payable at the period end.

INVESTMENT ADVISOR

The Investment Advisor, Gore Street Capital Limited (the "Investment Advisor"), is entitled to advisory fees under the terms of the Investment Advisory Agreement amounting to 1% of Adjusted Net Asset Value. The advisory fee will be calculated as at each NAV calculation date and payable quarterly in arrears.

For the avoidance of doubt, where there are C Shares in issue, the advisory fee will be charged on the Net Asset Value attributable to the Ordinary Shares and C Shares respectively.

For the purposes of the quarterly advisory fee, Adjusted Net Asset Value means:

a. for the four quarters from First Admission, Adjusted Net Asset Value shall be equal to Net Asset Value;

b. for the next two quarters, Adjusted Net Asset Value shall be equal to Net Asset Value minus Cash on the Company's Statement of Financial Position, plus any committed Cash on the Company's Statement of Financial Position;

c. thereafter, Adjusted Net Asset Value shall be equal to Net Asset Value minus Cash on the Company's Statement of Financial Position.

During the prior year, the management agreement was amended to change the term of adjusted NAV to mean net asset value minus uncommitted cash. Uncommitted cash means all cash on the Company's balance sheet other than committed cash. Committed cash means cash that has been allocated for repayment of a liability on the balance sheet of any member of the group. Investment advisory fees of £2,160,498 (30 September 2021: £1,353,252) were paid during the period, there were no outstanding fees as at 30 September 2022, (31 March 2022: £nil outstanding).

INVESTMENT ADVISOR

In addition to the advisory fee, the Advisor is entitled to a performance fee by reference to the movement in the Net Asset Value of Company (before subtracting any accrued performance fee) over the Benchmark from the date of admission on the London Stock Exchange.

The Benchmark is equal to (a) the gross proceeds of the Issue at the date of admission increased by 7 per cent. per annum (annually compounding), adjusted for: (i) any increases or decreases in the Net Asset Value arising from issues or repurchases of Ordinary Shares during the relevant calculation period; (ii) the amount of any dividends or distributions (for which no adjustment has already been made under (i)) made by the Company in respect of the Ordinary Shares at any time from date of admission; and (b) where a performance fee is subsequently paid, the Net Asset Value (after subtracting performance fees arising from the calculation period) at the end of the calculation period from which the latest performance fee becomes payable increased by 7 per cent. per annum (annually compounded).

The calculation period will be the 12 month period starting 1 April and ending 31 March in each calendar year with the first year commencing on the date of admission on the London Stock Exchange.

The performance fee payable to the Investment Advisor by the Company will be a sum equal to 10 per cent. of such amount (if positive) by which Net Asset Value (before subtracting any accrued performance fee) at the end of a calculation period exceeds the Benchmark provided always that in respect of any financial period of the Company (being 1 April to 31 March each year) the performance fee payable to the Investment Advisor shall never exceed an amount equal to 50 per cent of the Advisory Fee paid to the Investment Advisor in respect of that period. Performance fees are payable within 30 days from the end of the relevant calculation period. Performance fees of £318,177 were accrued for the period ended 30 September 2022, (31 March 2022: £1,545,369).

During the period the Investment Advisor provided operations management services to SPV companies resulting in charges to the amount of £419,574 (31 March 2022: £781,600) being payable by the SPV companies to the Investment Advisor.

13. Capital commitments

The Company together with its direct subsidiary, GSES1 Limited entered into Facility and Security Agreements with Santander UK PLC in May 2021 for £15 million. Under these agreements, the Company acts as chargor and guarantor to the amounts borrowed under the Agreements by GSES1 Limited. As at 30 September 2022, no amounts had been drawn on this facility.

The Company had no contingencies and significant capital commitments as at the 30 September 2022.

14. Post balance sheet events

The Directors have evaluated the need for disclosures and/or adjustments resulting from post balance sheet events through to 15 December 2022, the date the financial statements were available to be issued.

The Board approved on the 20 September 2022, the issuance of an interim dividend of 2 pence per share. This dividend totalling £9,627,989.56 was paid to investors on the 21 October 2022.

Following the approval at the Company's AGM on the 20 September 2022, the Company made an application to the High Court, together with a lodgement of the Company's statement of capital with the Registrar of Companies, the Company was permitted to reduce the capital of the Company by an amount of £100,000,000. This was effected on the 28 November 2022 by a transfer of that amount from the share premium account to distributable reserves.

Post year end, the Company acquired the project rights for Project Middleton, a 200 MW project located in Great Britain, for £11,629,145.41.

Following a review, the Company has agreed with the Investment Manager and its subsidiary, Gore Street Operational Management Limited (the "Operations Manager"), that with effect from 16 December 2022, the AIFM Agreement between the Company and the Investment Manager and the Commercial Management Agreement ("CMA") between the Company and the Operations Manager will be amended. The notice period under the CMA has been increased from 6 months to 12 months in order to align with the notice period under the AIFM Agreement. Amendments have also been made to both agreements: (i) to provide that in the specific event of a takeover offer for the Company becoming wholly unconditional, the agreements will terminate automatically with no requirement for notice to be served; and (ii) to prescribe certain fees that will then become payable to the Investment Manager and the Operations Manager on such termination. Based on the amounts involved, the changes to the AIFM Agreement and CMA constitute a smaller related party transaction as set out in the FCA's Listing Rule 11.1.10R. Further details are included above, and on page 26 of the half year report for the six months ended 30 September 2022 .

There were no adjusting post balance sheet events and as such no adjustments have been made to the valuation of assets and liabilities as at 30 September 2022.

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Companies

Gore Street Energy Storage Fund (GSF)

Friday, 26th April 2024

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