UK revenues ‘markedly lower’ in 2023: Harmony Energy echoes Gresham House update

Revealed in the firm’s recent trading update, the discussion around a “weak revenue environment for BESS assets” echoes the thoughts of Gresham House Energy Storage Fund, another major UK-based storage investor, who said earlier this week that this was due to assets not being able to participate in balancing the GB grid or replacing gas-fired generation to their fullest capability.

Although HEIT did not reveal the financial impact the weaker environment has had on its BESS assets fully, its quarterly net asset value update and audited annual results are earmarked for later this month and should provide further clarity.

Multiple factors contribute to a reduction in revenue which ‘exceeded market expectations’

EIT revealed multiple drivers that contributed to a reduction in revenue that “exceeded market expectations”, specifically in a macro and sector-specific sense.

The first major influence is the saturation of ancillary service markets. Due to the high rate in the buildout of BESS projects in GB this has led to the saturation of ancillary services and thus driven record low clearing prices.

Interestingly, this was “widely anticipated” and the firm’s two-hour duration BESS portfolio is positioned to protect against the event and the wider balancing mechanism (BM). However, Energy-Storage.news previously reported that the impact had been “far sharper than projected” and thus rocked numerous BESS portfolios including Gresham House.

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