Battery energy storage revenue woes hit JLEN Environmental as NAV drops 1.8%
From the all-time-highs of June and July 2022, the UK’s battery storage sector is undergoing a period of diminishing revenues | Credit: SSE
In a stock exchange notice today (16 February), the £798m trust said its 31 December NAV stood at 117.6p, reflecting a 1.8% fall over the quarter, and a flat NAV total return (-0.2%).
Key valuation movements included downward revisions to near-term power prices (-2.3p), although these were partially offset by the subsequent Electricity Generator Levy movement and favourable price fixes secured in the period (+0.8p).
Moreover, reductions in the gross margin forecasts for battery storage assets, prompted by independent consultants reappraising the available revenue opportunities, led to a -0.6p reduction to NAV per share.
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Actual inflation being below forecast (-0.7p), other movements including actual performance (+2.6p), and dividends paid (-1.9p) also impacted portfolio valuation during the period.
From the all-time-highs of June and July 2022, the UK's battery energy storage sector is undergoing a period of diminishing revenues, resulting from declines in Ancillary Service revenues that have not been offset by a pick-up in trading revenues.
The main hold-up is that the National Grid's Energy System Operator (ESO) arm has not yet implemented the system changes needed to use batteries to absorb fluctuations in power supply and demand.
The National Grid's ESO launched the Open Balancing Platform (OBP) in December to improve the utilisation of BESS on the GB network. However, the full plan will take until at least summer 2024 to roll out, with the pressure on revenues expected to persist until at least the
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