Gore Street Energy Storage Fund Plc (GSF) Earnings Call Transcript & Summary

Good morning, and welcome to the Gore Street Energy Fund plc interim results investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you to Alex O'Cinneide, CEO. Good morning to you, sir.

Thank you. And thank you, everybody, for joining here for the Gore Street Energy plc interim results presentation. Next slide, please. Four of us here from Gore Street Energy. I'm joined by 3 of my colleagues. This is Alex O'Cinneide speaking, the CEO; joined by Sumi, our Chief Investment Officer; and Paula, principal of the corporate development side and Investor Relations; and Alicja, principal on the technical side. We'll run through the presentation today, and as our host just mentioned, we will look to take questions there at the end of this presentation. Next slide, please. What are the financial highlights? First of all, I would say we're very happy with the portfolio performance, portfolio in terms of revenue, portfolio in terms of construction. And we can see some of these numbers highlighted here. Overall, energized capacity is now at 421 megawatts. That will go to over 750 megawatts by early next year in a total portfolio of 1.25 gigawatts. Dividend yield, obviously, a high dividend yield of 12.3%, and NAV per share 100.5p, so a slight decline quarter-on-quarter. We've avoided volatility in the NAV, so I think we're very happy in terms of how our assumptions have looked in terms of the progression of the portfolio, but we do see pressure in some of the GB curves and the Texas curves going forward. Overall, NAV total return 42.7%. All of these numbers are supported by a strong focus on operational excellence. What does operational excellence mean for us? It means adherence to minimization of CapEx in terms of construction. It means strong focus on asset availability. If our assets are not up, we cannot make money. And a strong focus on the monetization of those assets in a diversified revenue situation as well as a geographical one. We also operate a very strong balance sheet. Now we have completed 2 new upsizes of debt facilities, but our debt remains as a market-leading number, very appropriately low and one that we'll be utilizing to build out the 753 megawatts while leaving excess capacity for new opportunities post that. Overall, as we sit here today, we have a rapidly growing operational capacity. We have 3 projects left in construction out of the total projects of near 27 projects. So at the end of a long journey to build out a well-diversified portfolio, multi-geographical portfolio and multiple revenue opportunity portfolio, we're coming now to 753 megawatts, a steady-state business. Next slide, please. Balanced portfolio. As I mentioned, we are in multiple markets. So we have multiple different types of revenues in different markets, GB, Ireland, Germany, Texas and California. These markets are all weakly correlated in terms of revenue opportunities. So revenues we will receive in the Irish market are uncorrelated to revenues we'll receive in the GB market even at the same time of the year. They are correlated, though, by our energy transition, so the rise of solar and wind and the decline of baseload power, but uncorrelated in terms of actual day-to-day revenue, which allows us then to build a well-diversified portfolio, not subject to one market's movements. Overall, revenue is also diversified. We're active in ancillary services, wholesale trading and capacity market contracts, and that balance from our commercial and trading team allows us to generate best-in-class revenue per megawatt. We've also had a very strong focus on how big to build each of these assets: duration. How long you can produce electricity for is a key component of an energy storage system and one that has to be built on fundamentals in the market we're operating. Right now, we have 1-hour systems in GB, 20 minutes in Northern Ireland, 1 hour going to 2 hours in the Republic of Ireland, 2 hours in Texas, 4 hours availability in California, and 90 minutes in Germany. And each of those decisions was based on what the market would pay to us for that incremental CapEx. It also allows us very strong optionality if and when we choose to extend duration, for instance, in the GB market if we saw more opportunities in wholesale trading, for instance. Next slide, please. We have produced this slide over the last few quarters, really talking about where the portfolio is at. It's materially derisked. We identified several aspects at the start of the year of the points we wanted to derisk. The first one, RA contract. This is the large contracted revenue contract we now have in place in California, will produce revenue for us starting from June next year over the next 12 years, accounts for nearly 40% to 45% of the revenue of that asset and brings the overall portfolio a much higher percentage of contractual revenue, so really derisking of the portfolio as we have that baseline of revenue across the portfolio that we can then look to build on in the merchant activities we're engaged in. We, of course, are building out our portfolio. We have 3 projects left. I won't steal Alicja's thunder as she will go through these in detail, but Enderby, Big Rock and Dogfish, and I'm very happy to report we're very pleased with the progress of all of those. That then gives, in the end, a well-diversified low leverage portfolio, producing strong revenues, much stronger than we would have had if we, for instance, stayed as a GB-only player. Next slide, please. Sumi?

Thank you, Alex. So this is the usual NAV bridge of this half year period. As Alex explained, that changed from 107p to 100.5p in this half year period. So I will go through some of the detail in the next slide. But in summary, larger changes are: first, a dividend payment of 3.5p, which is consistent with our dividend policy; and also macroeconomic drivers impacts such as revenue curve update, which resulted in negative 5.2p, and inflation rate update of the 1.6p negative. Also, discount rates change had an impact of the positive 1.3p, which I can explain in detail. Under the active management category, operating assets. Operating assets generated 2.3p of the cash flow in the 6-month period. The biggest positive contributor is the 3p of additional value of RA contract signed post-period. So RA pricing resulted in much better price than we originally modeled for net asset value model in the previous period. And also, this pricing is reflecting the anticipated final pricing at that time at the end of September, but the actual contract signed in October is reflecting this price assumption. So it is consistent with the actual RA price. We also updated carrying value of multiple pre-construction assets by reflecting asset-specific factors such as the prudent measures, for example, updated COD, and then also the changed discount rate. This resulted in overall weighted average discount rate of our portfolio increased to 10.3% in this period. Next one, please. Thank you. So this is a bit of more details of the NAV changes. Firstly, inflation adjustment. This resulted in 1.6p negative NAV as a result of U.S. and EU inflation assumption changes. We adjusted down this inflation rate assumption by 25 basis points, in line with the decrease in core inflation rate in these regions. In terms of GB, we kept the inflation assumptions unchanged. Next one, in terms of the discount rate, we -- the result of that is the positive NAV impact of 1.3p per share. Although there are recent BOEs rate cuts, we made no change in the overall discount rate assumption. What has changed is the reflection of the construction progress of Enderby, Dogfish, Big Rock, and that is derisking the project status and resulted in the applied discount rate changes. Lastly, net portfolio return of 2.5%. This is as a result of cash generation of 2.3p and also fund OpEx and DCF updates. Also, this includes what I mentioned already, 3p of the contribution of RA contract and updated carrying value of the pre-construction assets. Next section -- page, please. Thank you. So this is a market forecast we included in the NAV assumptions, NAV calculations. So overall impact of 5.2p negative impact on NAV, which I explained earlier, is because of the downward adjustment of GB and U.S. forecast coming from the third-party research houses, which reflecting recent prevailing pricing levels and gas prices. Based on that new forecasted pricing, we expect gradual increase of GB revenue from '27 towards 2030 and stabilizes at that level as of 2030. So this curve presented in here is based on weighted average captured price of our assets. So this is coming from 2 aspects. One is the gradual increase of the GB market price due to the contribution of the -- sorry, due to the market overall price increase, and secondly, increase in the average duration of our GB asset. In terms of Northern Ireland price, this is forecasted to drop because of the expected change in DS3 program in 2026. Also, we included a Texas price drop as well from the expected new entry of the more and more battery projects in this region. At the bottom, separated from these uncontracted revenue I just mentioned, we have also contracted revenue streams in GB, ROI, Northern Ireland and in California. These will be expected to generate stable revenue streams. Next, please. Next slide, please. Thank you. This is a summary of the financing. So as announced, we have increased U.S. Big Rock loan and then also Santander debt facility size in this -- actually post the period. Santander increased from GBP 50 million to GBP 100 million of facility size. This is a drawdown facility size. So not -- to make sure this is not a drawn amount, so it's a facility size. In terms of the U.S. construction finance, Big Rock is from First Citizens Bank and the amount is increased from $60 million to $90 million. We expect to draw down this incremental $30 million for Big Rock project. We don't need to draw down on the other hand, the additional Santander facility size of GBP 50 million to complete our target of the 753 megawatts of operational portfolio even before we consider ITC process. At the bottom, we summarized growth asset value percent -- sorry, debt percentage among the gross asset value based on new debt sizing. So it will be 15% to 20%, considering debt amount at peak before ITC receipt. So this level is considering only additional amount, we need to draw down to complete 753 megawatts of operating portfolio. This as a numerator and also as a denominator, we divide that by the current NAV plus the expected total debt drawdown amount. That concludes my section. Alicja, next one, please. Thank you.

Thank you, Sumi. Good morning, everyone. So firstly, a summary of where we are in the portfolio with respect to different phases of projects within. So currently, we have 421 megawatts of energized assets, and that now includes Ferrymuir project in Scotland that has been energized earlier this year, and it's now fully participating in all available revenue streams, so it's participating discharge services, wholesale market, balancing market and also has started participating in the recently released Quick Reserve, which we're closely observing, and it's a very interesting new revenue stream from [indiscernible], so positive news there. In terms of construction, the 332 megawatts that constitutes Dogfish project in Texas; 75 megawatts, Big Rock; 200 megawatts in California; and also Enderby, 57 megawatts, which is connecting GB transmission network with National Grid, and I will go through a more detailed update on each of those projects on the next slide; and also 494 megawatts in pre-construction, which we're actively managing to maintain and [ even in buildability ] status and looking after grid connection with all other stakeholders to make sure those assets are ready to deploy. Next slide, please. So just an update on the key 3 assets still actively in construction. So Enderby asset is now, in terms of the project deployment and battery deployment, is complete. So Fluence battery is now all mechanically complete and pre-commissioned, and all our ICT works are also now complete. We are awaiting National Grid's outage window, which we have now been indicatively secured a January window. This is obviously subject to weather events, and winter is always a little bit more tricky to achieve that. Just a small background drop to connect the previous announcements around Enderby, where we have explained the impact of some of the changes that National Grid had to do around removing Chinese supplier of control and protection processes and software within their network, and that meant that Enderby had to completely redesign and remanufacture its control protection and effectively all the interconnecting facilities. That took a big part of 2024 for National Grid to facilitate within their own design and their own manufacturing processes, and we only were able to secure the final interfaces of National Grid around September. And since then, we're looking to actively facilitate an outage window with National Grid. I expect that this is going to be now energized in January as discussed. Big Rock, really good progress there. So we are happy to report now that we were able to energize all the interconnecting facilities for that asset, so our customer's switchyard and the substation which contains our large transformers are now fully energized. That's a very big milestone in terms of derisking the asset construction progress and allows us to move independently now from interconnecting parties that no longer stay on our risk register. We look to complete all the battery installation first week of January, and we will be moving to commissioning -- have commissioning tests in January and then all capacity tests looking to secure final sign-offs in time for our kickoff in June 2025. Dogfish progressing very well, indeed, since the beginning. It's on track to meet energization in February 2025. The project has been seeing a very steady state construction progression with no setbacks, and now that the project is materially derisked as well with all battery equipment now on site, inverters, batteries installed and mechanically complete. And also the D&O work, so interconnection works, have been completed. We consider this a very now derisked position for that project, and we expect to hit the February energization date as communicated. Next slide, please. In terms of overlook of the revenues and what has been happening in the last 6 months, so the portfolio weighted average has been GBP 10 per megawatt per hour. The key highlights in terms of the markets have been definitely Germany, where we have seen a very strong impact of solar penetration, solar generation in Germany that effectively meant that conventional generation such as gas peakers in Germany were recovering the running costs by bidding into ancillary services at high prices, and that allowed batteries to capture those prices, and we expect a similar trend as the fundamentals should continue as long as gas peakers are also still operating in the German wholesale and ancillary services market. In Great Britain, generally consistent performance comparison to the previous reporting period. We expect a slight uptick of revenues that will be really driven by more rational bidding from players in the ancillary markets by correlating wholesale revenues with ancillary bids as we see more volatility in the wholesale markets, driven by increasing renewable generation on the mix. In terms of Texas, so Texas has seen a quite unusual and seasonal performance this year. It's been a very mild summer, rather an outlier in the typical summer behavior in that part of the world, and that has led to driving lower scarcity on the grid and fewer outages from thermal generators, and that translated itself into lower revenues than the previous period last year. But as mentioned, we expect this to be an outlier and generally, the seasonal trend of summer revenues should return going forward. In terms of Ireland, generally still strong, steady-state performance. Revenues are still in the teens per megawatt per hour. We have seen now the reduction in temporary (sic) [ temporal ] scarcity scalar that has happened from October this year, and overall, we expect EirGrid to continue the DS3 program a little bit longer than what they communicated as the progress of deploying the new future services system is slower than what EirGrid communicated in the past. So potentially an expected extension is something that we anticipate to see. Please, can I have the next slide? So just to round up the numbers and the overall performance in each of those markets. So as discussed, Germany was strong performance. We also have prequalified our assets into aFRR. In our active management approach, we always look to secure new revenue streams to be able to maximize the available pool of income for the projects. GB, we've been actively also deciding whether to keep some of the assets in BM, and we have chosen not to register our one of recent assets in the BM, which allowed us to capture a premium, and we're constantly evaluating those kind of decisions with our optimization strategy. Ireland, strong performance as indicated on the screen with GBP 13.55, and we expect to see still an increasing number of trading participation also in Ireland. This is still a very small slice of the stack, but it's increasing as the market is becoming more and more mature. And Texas, that performance, as discussed, lower than the same time last year, but it has been an outlier from our analysis of previous historical trends in weather. Next slide, please. And this is just to highlight the point about our efforts to increase the contracted share of revenues in our portfolio. So the team has worked very hard to secure a resource adequacy contract in California. This is a contract which can be compared to capacity market contracts in GB and Ireland, which we're all now familiar with. It's a guaranteed revenue stream that also kind of has a very fixed term providing revenues -- predictable revenue streams. But similarly to capacity market, it's fully stackable and allows us to maintain control over an asset. So it's not a tolling agreement. We expect to keep control and we expect to restack revenue streams from RA on top of ancillary services and wholesale revenues as per other markets in which we operate batteries. Thank you.

Thanks, Alicja. We'll now go through key milestones completed after the reported period, first being the commencement of the in-house trading activities. Gore Street Energy Trading, part of Gore Street Capital Group, has been appointed as the RTM for some of GSF's GB assets. The synergies about having a dedicated RTM team that has as its sole focus to maximize GSF's portfolio of energy storage assets independently of any other asset owner or having different assets in balance sheet, all respecting the unique technical characteristics of each one of those individual asset systems and also joining forces with the asset management team responsible for this portfolio. The software was fully developed in-house by the GST team, which is led by Alan Smallwood, you can see here on the slide, who has decades' worth of energy trading experience. You will definitely be seeing more of Alan going forward. Actually, as a matter of fact, he introduced the function on our Capital Markets Day a month ago, and you can check the presentation slides and watch the recording in full on GSF's website. This commercial arrangement started in October, so like I said, after the reported period, and it now includes a portfolio of 5 assets, all located in GB, circa 80 megawatts in aggregate. It's really another step of GSF's strategy to take control of the value creation functions of energy storage on a holistic manner. It's still early days to share details of the performance, but we look forward in reporting further details of this initiative and its outcome, its results. Next slide, Slide 19, yes. Another important milestone completed towards diversification buildup was the resource adequacy contract for the 200-megawatt, 400-megawatt hour Big Rock assets, which is located in California. Alicja already covered this, but just sort of to state its characteristics, this is a 12-year contract secured and announced in mid-October after reported period. This contract is expected to commence in the summer, June of next year, and it was secured at a $16 per megawatt per hour above the investment case expected price. As Sumi demonstrated on the NAV bridge a couple of slides ago, secured -- the price that actually secured exceeded the estimated and the reflected one in the March end NAV. So again, to recap, fixed price contract, capacity market equivalent, not a tolling arrangement in any shape or form. This means that RA is a fully stackable revenue stream. Big Rock is able to participate in other market pools, and it's also expected to secure further revenue streams. Next slide on sustainability. Thank you. So the 2024 ESG & Sustainability Report was released in August and includes the relevant disclosures for the company as an Article 8 product of SFDR. As we have done in previous years, the report also includes the voluntary TCFD disclosures as well and a general summary of the company's engagements with different parts of the battery investment value chain. Now after the reported period after September end and as part of the FCA's Sustainability Disclosure Regulations, SDR, the company's IM has chosen to adopt the Sustainability Focus label. All the relevant disclosures now can be found on the Investment Managers' website and also GSF's website would have links for those appropriate disclosures. Back to you, Alex.

Thank you, Paula. I want to touch on the investment tax credit, kind of bring folks through how this will work. Some of it is quite technical. Obviously, the fundamental is we need to bring our assets in the states which are eligible for ITC through to this term of placed in service. For us, that, in essence, means full operational capacity. As Alicja went through, we have derisked materially all the 3 assets which are in construction. We expect them all to be completed in the very near term. But as it relates to Big Rock and Dogfish, we are looking at a Q1 event for what we will term the place into service. At that point then, the credit is available and then able to be monetized. We will monetize the credit. What does that mean? That means we will sell the credit to the market for companies which have a use for shielding earnings through a tax credit. Obviously, and I can see some of the questions that are coming through from my colleagues, there has been a change in administration in the United States. Our viewpoint on the viability of the tax credit remains unchanged. There is -- it would be extremely difficult and unique for Congress, not the incoming President, but Congress, to retroactively change a tax credit. This is a market -- overall tax credit has been operating for 50-plus years, so we don't foresee any material risk to the tax credits through legislation. We are also encouraged by the fact that since the election, we received multiple term sheets from market counterparties to monetize those tax credits. So we will be going ahead as the assets come through into -- out of construction to monetize those tax credits, and we look forward to receiving them through Q2. Note in terms of where they sit, they are in our NAV, but we have not included them in kind of cash flow projections going forward, so are available for multiple purposes, whether that be paying down debt or other activities for shareholder value. Next slide, please. As I've mentioned and as Alicja explained wonderfully, a significantly derisked portfolio to 750 megawatts. Enderby, we are a little frustrated, but are awaiting National Grid, who have promised us very early in the new year, but the project is ready to go. Big Rock, materially derisked with critical parts of the infrastructure energized and that continues the pace and sales are nearing completion. And Dogfish construction project, which is going very well. Why is the 750 megawatts important to us? That's a steady-state business as we look at it. I can also see some questions coming in on how does this relate to dividend cover. What we can say is we look at our full year -- our last full year where we generated approximately GBP 15 per megawatt for every hour in operation, a really good number, especially in comparison to GB revenue. If we can replicate that at the 750 megawatts, we will be able to fully cover our dividend plus fund expenses. That said, obviously, we're operating in a merchant marketplace where individual markets move up and down, absolutely reinforcing the importance of diversification. As we look out into our markets, Ireland, having a good period now, and we believe we'll have a strong period over the next few months. GB, very interesting. We've always said that we see growth, but incremental growth in the GB market. That is absolutely what is happening, and we see some good signs of recovery in terms of pricing in the GB market. Texas is a market which is very dependent on weather events, but -- as one which has had a huge build-out of solar and wind, and that does support the need for our storage facilities very heavily. And then finally, California, with a significant portion of our revenue contracted, giving this baseline revenue across the portfolio, supporting our activities on the more merchant side. So 750, very important milestone for the portfolio. It's very close, only 3 projects left out of multiple tens of projects and with construction projects guidance from us going very, very well, and we expect near-term completion. Next slide, please. So in conclusion then, a derisked portfolio, well situated in multiple markets, uncorrelated by revenue activities but correlated by the energy transition and correlated by climate change, a strong focus in the organization on competitive cost per megawatt fully installed so we spend the least amount of money to build the best systems. We also have a very close eye on when to add in extra duration. I think our colleagues here in Gore Street were exactly right in terms of the duration questions. What we've seen is incredible reductions in cell pricing. Anybody who added duration over the last few years has done so at the highest possible cost point, and so return on capital employed would be very difficult. Here, we're now in a very good situation if and when we choose to extend duration given the massive CapEx decrease. Also best-in-class generation, our portfolio always achieving over what GB revenues would be. And now with our in-house function, which Paula touched on, we have limited data to date, but the limited data to date is showing 20% increase over the Modo baseline. So that's very encouraging, but it is only short-term data so far. Overall then, a portfolio which has consistently delivered against targets. We're very excited to bring it to the 750 megawatts, which you should expect to hear around in Q1. We're very excited by the diversified revenue portfolio that we've built, and we're very happy with the potential we see in each of the markets given the continued growth of solar and wind. Thank you.

[Operator Instructions] Just while the company take a few moments to read the questions that have been submitted today, I would like to remind you that the recording of the presentation along with a copy of the slides and the published Q&A can be accessed via investor dashboard. As you can see, we have received a large number of questions throughout today's presentation. And Ben, at this point, if I could hand over to you to chair the Q&A, that would be great, and then I'll pick up from you at the end.

Absolutely. We've had a lot of questions which are sort of similar topics, so I'll try to summarize those into one question. So we have quite a few questions on the Trump election, which I believe Alex has covered, but we've also had questions on the ITC range that we've included in the report of $60 million to $80 million. And what is the reason for this range?

I'll let Sumi jump in, but first, it is -- to my point, we are monetizing that. So we ourselves, this portfolio doesn't have a need for the tax credit, whereas multiple companies in the U.S. have the need for that tax credit. So we will sell it into that market. That market trades at anywhere between 90% to 95% of face value. And really, that's where you see then the guidance in $60 million to $80 million. Sumi?

Yes. And then in addition to that, there is the applicable valuation of the asset. So that valuation is for the ITC credit calculation. So that valuation is not fully fixed yet. That is also another like a variability of the total final proceeds.

Thank you. Next, on to the resource adequacy contract which was secured. Could you talk to how this compares to other long-term contracts like tolling?

Maybe Alicja or I can do that. Okay. Let me take it. So RA contract is more similar to capacity market contract. So which is basically stackable with the other revenue. That's a key point. So we take the RA contract or capacity market revenue on top of the merchant revenue we can generate trading the storage facilities such as the wholesale trading or ancillary services. If it's tolling, that is fully -- it's taken control by the counterparty. So if they will generate a significant amount of revenue, that's theirs. If they underperform, that's their pocket. We just receive the fixed revenue only, and that can be -- that is only like agreed at the time of a contract price. So there's, in a sense, no volatility. We saw various tolling contract offer. We concluded the pricing level is not attractive considering the -- what we can expect from the merchant revenue stream. And also even without even considering possible impact of the long-term fixed contract, which is the -- for example, you can lever the project with the external third-party debt and then increase the equity value. But even with that, given the current level of the debt capital market, we don't think that can give us more value at all. So for that purpose, we chose not to take the tolling arrangement, but we continue to look for, I mean, any kind of a positive movement. But so far, it's not in our range.

Thank you. Next, we've had quite a few questions on Texas as we've seen lower revenue generation over this period. Can you talk to why that is?

I can take that. So overall, I think Texas is -- I touched upon it a little bit earlier, but really what the focus points are is that, first, it's been a very, very mild summer. Generally, revenues in Texas are strongly correlated to weather, similarly to Ireland, but let's say, reversely positioning themselves to it. So in summer, Texas generally experiences very high temperatures, and that drives conventional generators, thermal generators, out of operation when temperature goes around 38 degrees. When that happens, effectively, thermal generators drop off and ERCOT is obligated to procure effectively in a sort of distressed manner quite a lot of contingency generation. They do it on ancillary services mostly. And that has happened previously in the previous years. And this year, we have seen very few events of above 38 degrees Celsius, and that has driven just fewer events that provide that uplift. Going forward, we expect and we've been looking at historical trends, that this summer 2024 has been unusual. It has been an outlier. [indiscernible] Texas has got an increasing temperature projections also driven by climate change, and it has increasing number of load, so effectively build-out of demand in ERCOT, which will be driving as well the need for rapid procurement of generation in times of scarcity. So that is one of the trends going forward, but the mild summer is what we attribute to this year's decrease. And there has been also a build-out of batteries in Texas in times when there isn't scarcity on the network, and batteries are bidding into ancillary services. We do see increased competition from additional 3 gigawatts. Going forward, we do expect that batteries and effectively similar flexible generators will be participating more in wholesale, so similar trends as we observed in GB. And it will mean that the saturation and increased battery build-out will have a smaller effect on revenues.

Thank you. Next, the fundamentals look good to me, so what is the reason for the heavy discount? I think this is a question on the share price.

Yes. Absolutely, we are very disappointed with the share price performance. I speak that as obviously CEO and the manager, but also as a personal significant holder in the stock. It is hard for us to really understand where we are trading as we look at the fundamentals. What we have here today is a derisked portfolio of 750 megawatts near term, right, in the next weeks, months, a portfolio which has consistently delivered best-in-class revenues in a diversified and correlated fashion, a portfolio which is built at a cost per megawatt which we think is market-leading, and the utilization of debt in a very conservative but appropriate way. At fully 750 megawatts built out, we still have a very low percentage of debt to GAV. So the share price performance in that context, we find dislocated and disappointing. We are cognizant of the broader macro environment in the sector. We see 2 of our peers in distress and unable to pay dividends, obviously, weighing across the sector. From our perspective, what has our approach been to date? Our approach to date has been build out our portfolio at the right price in the right markets to deliver consistent cash flow and dividend stream to our investors. We believe we are very close to that. I would also note that post the 750 megawatts, the steady-state portfolio and given potentially large cash inflows, for instance, from the ITC, potentially looking at disposals in markets where we might have a higher percentage of our portfolio than we would naturally have in a balanced portfolio. We will look at mechanisms to deliver shareholder value, whatever those mechanisms might be, all right? We have done our job to get to the 750 to a steady state. After that, we need to absolutely look at shareholder value here and how we get recovery back in our share price. And you should be sure that is an ongoing conversation between the management and the Board.

Thank you. next, moving to debt facilities. Could you speak to the 2 debt facilities the company has and what these are expected to be used for?

Sure. So as I went through in a slide, so we have upgraded the Santander facility size from the GBP 50 million to GBP 100 million and then also Big Rock facility size from the $60 million to the $90 million. So incremental Big Rock facility size, $30 million incremental amount, will be purely used for the Big Rock construction CapEx. Santander $50 million additional capacity, we don't need to draw down for any of the achieving 750 megawatts of the steady-state portfolio, but this can offer ability to, for example, consider duration extension or increase the flexibility of working capital. But for steady state, all we need is Big Rock incremental $30 million of the facility.

Thank you. I think we have touched on this, but there's a few more questions come in on dividend cover and what does a 750-megawatt operational portfolio mean for that.

So I think I've covered before, if we look at our last final year at that GBP 15 per megawatt for every hour in operation across the portfolio, we forecast that at 750 megawatts will produce fully covered dividend, 7p plus cost. Again, I would say, of course, those markets move, they're merchant markets. But if we look back at prior performance, that's our guiding for going forward as we complete out this large portfolio increase.

Thank you. Next, the company has spoken a lot about the 753-megawatt target. What are the next steps for the remaining pre-construction assets?

So I think I'll refer back to kind of my other answer around shareholder value around, of course, the share price, the discount to NAV. So we do have facilities in place. I think we have utilized them judiciously, and we will continue to do so. We will have a cash inflow coming through from the ITC. What is then the best levers for shareholder value? Is that paying down debt, for instance, right, which is at this present level of debt, it's a near 7% risk-free return to do so. Is it to look at other mechanisms, for instance, investing in our own portfolio through shares? Is it to continue to look at building out more of the assets? What I would say is we want to get to the portfolio of 750 in conversation with shareholders and the Board to then understand what the best route forward is given we do have a large portfolio of pre-construction assets. They have significant value. It is -- what is the right time to build those out? Are they best situated in this portfolio or some other ownership? And what should we look to do with cash over the course of 2025? But what I would say is that shareholder value is first and foremost on our mind as we look at that, given we will achieve the build-out of this portfolio to what we believe is a steady state.

I'll pass over to Alex for any closing remarks that you may have. Thank you.

Thank you all. As we sit here today, I think the key messages coming through here, 3 projects, final advanced stages of construction; materially derisked; strong revenue potential across the portfolio and demonstrated in our results; good judicious use of leverage; and well situated then for a strong 2025.

Perfect. I'd just like to thank you all for updating investors today. Could I please ask investors not to close the session as you will now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Gore Street Energy Storage Fund plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.