Gresham House Energy Storage Fund has signed a sale and purchase agreement for the conditional acquisition of a 480 MW battery energy storage system near Rayleigh, Essex.
If completed, the deal would increase the fund’s development pipeline from 694 MW to 1,174 MW, marking a significant expansion of its future battery storage capacity. Once built, the Rayleigh project would be almost five times the size of GRID’s largest operational asset, the 100 MW Melksham project, and twice the size of the two largest projects currently in its pipeline, which stand at 240 MW each.
The acquisition forms part of GRID’s three-year plan, first set out in November 2024, which includes a target of achieving £150 million in EBITDA.
The project’s location in southern England could also prove important. GRID expects Rayleigh to benefit from negative Transmission Network Use of System charges, at least during the first few years of operation, because it would be able to provide supply at peak times in an area where power might otherwise need to be brought in from further afield.
That could make the project particularly valuable as the UK looks to make better use of renewable generation while reducing pressure on the transmission network.
A sizable addition, but not yet a done deal
While the project would represent a major addition to GRID’s portfolio, completion of the acquisition is still subject to conditions. Most notably, the project will need to receive an acceptable ‘Gate 2’ connection offer, which is expected between September 2026 and January 2027.
That timing underlines one of the central challenges facing battery storage developers in the UK. The need for more storage is clear, particularly as the country brings more intermittent renewable generation onto the system, but grid connection delays remain a significant hurdle for many projects.
NESO has been working hard to clear the queue to enable viable and important projects to progress more quickly, but there’s still a sizable backlog for all connection types.
In addition to being able to provide balancing services to the grid, the Rayleigh project is also expected to complement more than 6GW of new offshore wind capacity set to be built off the Essex, Lincolnshire and East Riding coast.
Ben Guest, Managing Director of GRID, noted, “Rayleigh is an exciting project for GRID in terms of its sheer size, strategic location and, of course, potential investment returns and positive expected impact on the company’s NAV per share. This project alone would add almost 50% to the currently operational portfolio’s installed capacity and greatly expands the new project pipeline already announced in our Three-year Plan.
“We have significant flexibility to build this project to a minimum 2-hour, or much longer duration.”
