Gresham House Said to Plan €1 Billion Fund for Battery Storage
(Bloomberg) -- Gresham House plans to raise a fund targeting roughly €1 billion ($1.2 billion) to give investors access to the growing market for battery-storage systems, according to a person familiar with the matter.
The London-based alternative asset manager intends for the fund to focus on battery investments in Europe, the person said, declining to be identified discussing non-public information. The goal will be utility-scale battery deployment, the person said.
A spokesperson for Gresham House declined to comment.
Battery storage has emerged as a critical technology to ease pressure on Europe’s ailing power grid as the region ratchets up its build-out of renewables. A shortage of storage capacity is forcing the European Union to look for ways to curb supply, with Germany alone set to spend as much as €3.7 billion this year on power curtailment.
Battery operators make money by soaking up excess power when electricity prices are low and selling it back to grids when prices rise. They can also profit from providing load balance to electricity markets. Reliance on giant batteries is growing, with installations in Europe set to increase about fivefold in the five years through 2030.
“Battery energy storage systems are no longer considered optional but a necessity to balance renewable generation,” Tony Dalwood, Gresham House’s chief executive officer, said in an interview, declining to discuss the fund. “We continue to see fantastic opportunities across Europe and beyond.”
Gresham introduced its first battery-focused fund in 2018, primarily serving the UK market. Known as Gresham House Energy Storage Fund, it currently has a net asset value of roughly $860 million, the person familiar also said.
Deploying batteries at scale still faces a range of hurdles, including lengthy permitting and growing pushback from communities concerned about fire risks from lithium-ion batteries. And battery operators often wait years to connect their systems to the grid. Gresham House Energy Storage Fund recently warned investors about a possible delay in meeting its financial guidance, citing slower-than-expected grid connection for two projects.
Dalwood said such challenges don’t damage the broader business case.
“Without large-scale storage, the pace of installation and the business case of renewables are expected not to reach their full-deployment potential,” he said.
(Adds BNEF data)
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