An infrastructure fund invested in by local authority pension schemes in the UK has bought energy storage facilities used to control Britain’s power supply.
The Gresham House British Strategic Investment Fund is financing 30 megawatts of energy storage assets used by the UK’s National Grid and distributed across three site in Nottinghamshire, Bristol and Essex.
The transaction follows the first close of the fund in 2017 with £150 million (€170 million) of commitments raised from institutional investors including the Local Government Pension Schemes.
Gresham House, which is listed on the UK AIM stock market for small firms, said the background to the investment is the increasing management of frequency peaks and troughs, as well as other imbalances, in new ways by the National Grid.
The batteries can nearly instantaneously absorb or generate power to keep supply and demand for energy balanced in real time.
Ben Guest, investment director for the fund, said returns from these kinds of projects benefit from typically low correlations to traditional asset classes, a partial link to inflation, good cash flows and significant asset backing.
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