Annual Report • Jul 16, 2024
Annual Report
Open in ViewerOpens in native device viewer
Annual Report of Gore Street Energy Storage Fund plc For the year ended 31 March 2024 Gore Street Energy Storage Fund plc (“GSF” or “the Company”) is London’s first listed energy storage fund, launched in 2018. The Company is the only UK-listed energy storage fund with a diversified portfolio across five grid networks. The Company is one of the principal owners and operators of battery storage facilities in Great Britain and Ireland and owns and operates facilities in Western Mainland Europe and the US. It is listed on the Premium Segment of the London Stock Exchange and included in the FTSE All-Share Index. Energy storage technologies can enhance power system stability and flexibility and are key tools for balancing out variability in renewable energy generation, facilitating the integration of more renewable energy supply into power grids. In this way, energy storage is critical to the renewable and low-carbon energy transition. Investment Objective The Company aims to provide investors with a sustainable and attractive dividend, generated from long-term investment in a diversified portfolio of utility-scale energy storage assets. In addition, the Company seeks to provide investors with capital growth through the re-investment of net cash generated in excess of the target dividend, in accordance with the Company’s investment policy. The Company’s investment policy is available on its website and on page 35. Target Yield The Company has updated its dividend policy and will target a 7 pence per Ordinary Share dividend payment per annum. Sustainability The Company discloses its ESG principles in compliance with the EU’s ‘Sustainable Finance Disclosure Regulation’ (SFDR). SFDR disclosures are included on page 93. The annual Sustainability Report assesses its alignment with SFDR and the Task Force on Climate-Related Financial Disclosures ‘TCFD’ requirements. The report outlines how the Company integrates ESG principles in its activities, such as acquisition, construction, and asset operations, and provides investors with visibility on its ESG plans. The Company is also a signatory of the Principles for Responsible Investing ‘the PRI’. Further details are included on page 35. About Us Strategic Report 1 Key Metrics 2 Chair’s Statement 6 Investment Manager’s Report 32 Strategic Report Governance 45 The Board of Directors 47 Directors’ Report 51 Audit Committee Report 53 Management Engagement Committee Report 54 Remuneration and Nomination Committee Report 55 Directors’ Remuneration Report 57 Statement of Directors’ Responsibilities in respect of the preparation of the Annual Financial Report Financial Statements 59 Independent Auditor’s Report 64 Statement of Comprehensive Income 65 Statement of Financial Position 66 Statement of Changes in Equity 68 Statement of Cash Flows 69 Notes to the Financial Statements Annual General Meeting 86 Annual General Meeting – Recommendations 88 Notice of Annual General Meeting 90 Explanatory Notes to the Notice of Meeting Additional Information 93 SDFR Annex IV 101 Alternative Performance Measures and Glossary Inside back Shareholder cover Information Back cover Directors and Advisors Contents Strategic Report Annual Report for year ended 31 March 2024 1 Key Metrics * Some of the financial measures above are classified as Alternative Performance Measures, as defined by the European Securities and Markets Authority and are indicated with an asterisk (). Definitions of these performance measures, and other terms used in this report, are given on page 101 together with supporting calculations where appropriate. ** The 49.9 MW Ferrymuir asset was energised during the reporting period, taking total energised capacity to 421.4MW at year end. For the year ending 31 March 2024 KEY METRICS As at 31 March 2024 As at 31 March 2023 Net Asset Value (NAV) £540.7m £556.3m Number of issued ordinary shares 505.1m 481.4m NAV per share 107.0p 115.6p NAV Total Return for the year -1.2% 12.6% NAV Total Return since IPO * 48.4% 52.4% Share price 64.5p 100.8p Market capitalisation £325.8m £485.3m Share price Total Return for the year -30.0% -5.1% Share price Total Return since IPO -10.2% 30.9% Discount to NAV -39.7% -12.8% Portfolio’s total capacity 1.25 GW 1.17 GW Portfolio’s operational capacity 371.5 MW 291.6 MW Average operational capacity 311.5 MW 291.6 MW Total portfolio revenue £41.4m £39.3m Average revenue per MW/yr £132,905 £134,774 Operational EBITDA £28.4m £27.8m Total Fund EBITDA £20.2m £16.8m Dividends per ordinary share paid during the year 7.5p 7.0p Operational dividend cover for the year 0.78x 0.90x Total Fund dividend cover for the year 0.56x 0.54x Dividend Yield 11.6% 6.9% Gross Asset Value (GAV) £578.1m £556.3m Gearing 6.5% 0.0% Ongoing Charges Figure 1.42% 1.37% (2023: £27.8m) £28.4m OPERATIONAL EBITDA (2023: 291.6MW) 371.5MW OPERATIONAL CAPACITY (2023: 6.9%) 11.6% DIVIDEND YIELD 7.5p DIVIDENDS PAID DURING THE YEAR (2023: 7.0p) 107.0p NAV PER SHARE (2023: 115.6p) -1.2% NAV TOTAL RETURN for the year ended 31 March 2024 (2023: 12.6%) 2 Gore Street Energy Storage Fund plc Overview and Performance Despite challenging conditions in the Great Britain (GB) energy storage and listed markets, the 2023/24 reporting period saw the Company successfully raise new capital, increase its energy storage capacity, and extend its uniquely diversified portfolio to c. 1.25 GW across five uncorrelated markets, all while maintaining its dividend and a prudent level of debt. Total revenue grew to £41.4 million through strong consolidated asset performance, notwithstanding volatile market conditions in GB and a normalisation of power prices in Germany. The Company met its target dividend for the year, equal to 7.5 pence per share, taking NAV total return including dividends since IPO to 48.4%. During the reporting year, the Company energised the 79.9 MW Stony and 49.9 MW Ferrymuir projects in GB, both of which are now fully operational and generating revenue, while the energisation of the 57 MW Enderby project is scheduled to follow shortly post-period. With an energised portfolio of 421.4MW during the period, the Company is poised to take one of its biggest steps forward in scale with a further 332 MW of capacity expected in the coming months. This includes the 200 MW Big Rock (CA, USA) and 75 MW Dogfish (TX, USA) projects, taking the energised portfolio to c.753.4 MW by the end of the current financial year. This internationally diversified growth is the result of a strategy adopted in 2019 when we first invested in assets outside of GB as it became clear to the Investment Manager and the Company that reliance on revenues from a single grid would expose shareholders to higher volatility than a diversified portfolio. This vision has been vindicated during and after the reporting period, with sole GB investment strategies suffering from low grid services revenues due to overcapacity and the failure of a robust GB wholesale trading market to develop as expected by many. Our fleet of operational projects across Ireland, Germany and the US provides a buffer against GB headwinds as they are not only uncorrelated with the GB market but offer different revenue streams for different durations. The Irish and Texas grids continued to provide particularly strong revenues over the reporting period, driven by fundamentals that support energy storage. Wind generation in Ireland grew, providing lucrative market opportunities for battery energy storage systems as grid operators rewarded fast-acting flexible assets. Texas continued to face challenges from periods of extreme weather that increased the grid’s need for reserve services and provided attractive trading opportunities. The Company is well-placed to capitalise on these opportunities as they emerge across multiple markets. We remain in a strong financial position as a result of good liquidity management by the Investment Manager. As at 31March 2024, the Company had £60.7 million in cash or cash equivalents and £58.6 million in undrawn debt facilities. This ensures the construction of priority assets is fully supported and can continue at pace. We also raised new capital during the period through our long-term strategic battery partner, Nidec, and used our shares to acquire additional interests in operating assets from our strategic development partner, Low Carbon. In the case of Low Carbon, the Company increased its asset base to 385 MW in the lucrative Irish market with minimal cash consideration, agreed at 2019 prices, demonstrating our ability to grow even at a time when capital markets are effectively closed to investment trusts. Macroeconomic Environment The macroeconomic environment continued to impact the investment landscape throughout 2023/24, with high inflation and central bank interest rates constraining performance across the sector. In monitoring the share price volatility experienced across the sector over the financial year, we maintain the view that the discount to Net Asset Value at which the share price has traded materially undervalues the Company and its portfolio. The results reveal the strength of our activities across multiple uncorrelated markets, and we expect to continue to deliver value for shareholders as more capacity is brought online. On behalf of the Board of the Gore Street Energy Storage Fund plc, I am pleased to present the Company’s Annual Results for the year ended 31 March 2024. Chair’s Statement Strategic Report Strategic Report Annual Report for year ended 31 March 2024 3 Following price hikes in 2022, capex costs fell as supply chain issues related to the pandemic subsided and lower demand from the electric vehicle market resulted in greater availability of materials. This lowers the capital costs of assets currently being built and, as revenue opportunities emerge to justify additional expenditure, permits the potential augmentation of existing sites. The Company maintains its focus on delivering market-leading revenue from a varied range of sources, using assets built at the best value per MWh fully installed, and continues to ensure capex costs are monitored by the Investment Manager when assessing capacity additions to our sites. Strategy and Operational Performance Maintaining high availability of the assets within the portfolio remains a priority for the Company and its Investment Manager. By exceeding 93% availability across the financial year, the assets were able to capitalise on the most lucrative opportunities possible while ensuring planned maintenance could be carried out to safeguard future operations. Our strategy over the period focused on the fundamentals of renewable energy penetration and its associated volatility, which creates demand for ancillary services. In Ireland the ongoing DS3 programme (Delivering a Secure Sustainable Electricity System), which facilitates the integration of wind power and other non-synchronous renewable energy sources, delivered substantial revenue. Solar deployment drove revenues in Texas, particularly over the summer when electricity demand soared during periods of high temperatures. The added impact of increasingly steep grid load ramps caused by declining solar output in the evenings resulted in an increased need for reserve services from fast responding, secure sources like energy storage. The portfolio also delivered a broader range of activities in markets where ancillary services fell in value, such as Germany. The volatility of the previous reporting period subsided as gas supplies became less restricted and grid service prices normalised. The Company adopted a more wholesale trading- focused strategy in Germany, supported by an increasingly sophisticated data-driven approach, to ensure its asset could access additional revenue streams. Overall wholesale trading increased as a proportion of revenues across all markets to 7% compared to the previous financial year’s 3% as the Company continued to diversify its revenue stack to deliver sustainable returns to shareholders. These actions, taken as part of the Company’s diversified approach, were essential in managing the impact of market saturation and limited wholesale market volatility in GB. We are pleased that the outperformance of our international portfolio compared to the GB assets allowed the Company to achieve higher absolute revenues than in the previous reporting period despite declines in GB revenue. The Company is hopeful that GB market conditions will improve, with some signals towards the end of the financial year and post-period suggesting a recovery across some revenue streams. We remain well positioned to maintain strong performance from our international portfolio in addition to any improved revenue generation from GB assets. NAV Performance Despite best-in-class operational performance across the portfolio and pro-active management delivering strong returns, external factors, including central banking monetary policy to manage inflation and discount rates across the sector, contributed to a NAV decrease across the financial year from 115.6p per share as of 31 March 2023 to 107.0p per share. We expect to see improving market conditions as inflation continues to subside and rates come down. The Company remains confident in its ability to continue to deliver long-term value to shareholders as we deploy additional operational capacity by the end of the fiscal year. This will have a positive effect on revenue generation and dividend coverage. 4 Gore Street Energy Storage Fund plc Strategic Report Discount Management The Board continues to retain the ability to repurchase shares at a price lower than NAV in the interests of discount management. The Company remains fully committed to the build-out of the portfolio with support from shareholders, with the additional debt added during the period dedicated to these construction efforts. Healthy returns are expected to continue from across the portfolio as more capacity is added, including in the CAISO market in California, and discount rates will continue to be unwound as we progress from construction to operations. We, therefore, maintain the position that the repurchase of shares is not the right course of action for the Company at the current time, although the Board will continue to monitor the performance of the share price and will act to employ appropriate discount control mechanisms as needed. Debt The Company increased its £15 million revolving debt facility with Santander to £50 million, including an accordion option to increase beyond £50 million to up to 30% of Gross Asset Value. We also added debt finance secured at the project level for the first time, with $60 million from First Citizens Bank tied to the deployment of the 200 MW/400 MWh Big Rock asset in California, the Company’s largest to date. We have long heralded the promise of long-term secured revenue from the Resource Adequacy (RA) mechanism in CAISO and the backing provided by this loan vindicates this position as we look ahead to energising the asset by the end of 2024. Capital Allocation The Company continues to focus on the correct allocation of capital to ensure long-term, sustainable returns are achieved in the interests of shareholders. This includes prioritising the construction of specific assets to deliver optimal value through their scale, revenue opportunities and geographical spread. We expect to deploy the majority of available cash and lines of credit, both project and fund-level facilities, by the end of the 2024/25 financial year to fund the buildout of 57 MW in GB through the Enderby project and 275 MW across the US projects Big Rock and Dogfish. The Company has comfortable headroom to meet its current contractual obligations and we will continue to act prudently regarding leverage in what remains a high interest rate environment. We are also encouraging the Investment Manager to continue exploring options to recycle capital from the portfolio and will keep the market informed of any relevant progress. Dividends The Board has approved a fourth interim dividend of 1.5 pence per share, bringing the total dividend announced for the period ended 31 March 2024 to 7.5 pence per share in line with the Company’s Dividend Policy (the ex-dividend date being 27 June 2024, with the record date of 28 June 2024). The dividend will be paid on or around 15 July 2024. Dividend Policy We remain committed to regular capital allocation reviews and comprehensive analytical assessments, while remaining receptive to shareholder feedback, to ensure the Company continues to be managed effectively for investors. Following this year’s review, the Board has decided to adjust the Company’s dividend policy to better align it with the construction schedule of the portfolio. It is the Directors’ intention to continue to pay, in the absence of unforeseen circumstances, a dividend of 7.0 pence per ordinary share for the financial year subject to market conditions and performance, financial position and outlook, and fiscal environment. This is consistent with investors’ expectations based on the current NAV but, from the 2024/25 financial year, the profile and quantum of dividend distributions will be more closely aligned with operational and other cashflows rather thanNAV. Moving from roughly equal payments across all quarters, the Board has determined to target a dividend of 1.0 pence per Ordinary Share for each of the first three quarters of the financial year. It is intended the amount of the final quarterly dividend (announced in June and paid in July) will make up the balance of the annual dividend target subject to cash flows at the time. As with the current dividend policy, all dividends remain at the discretion of the Board. This is a prudent adjustment to the dividend policy reflecting the maturing nature of the Company’s portfolio, with a transformative year for increasing operational and revenue- generating capacity. Sustainability The Company is rooted in sustainability and continues to increase disclosures across a range of ESG metrics measuring the impact of its own operations. Publication of our second ESG & Sustainability report in September 2023 covering the FY 2022/23 reporting period took account of investments in California and Texas, with the latter exposing the Company to a grid system with higher levels of fossil-fuel generation. As these markets increase their renewables deployment, the crucial role of the Company’s battery storage assets in enabling decarbonisation will increase while supporting stable grid operations during increasingly frequent periods of extreme weather. Strategic Report Annual Report for year ended 31 March 2024 5 The ESG & Sustainability Report covering FY2023/24, due to be published in early September, will consolidate the Company’s latest Sustainable Finance Disclosure Regulations (SFDR) and Task Force on Climate-Related Financial Disclosures (TCFD) disclosures. An assessment of the Company’s Principal Adverse Impacts (PAI) under SFDR is included in the appendix of this report. The Company remains committed to increasing transparency in the market for green investment products. As part of this, we will report on progress towards integration of the Principles for Responsible Investment (PRI) for the first time in 2024. We are proud of our track record of transparency across all metrics and will continue to deliver leading levels of disclosure to the market. Board Composition and Succession Planning As reported last year, the remuneration and nomination committee continue to plan director succession to ensure the four directors appointed at IPO in 2018 retire in an orderly manner. Work on future appointments is advancing, and details are included in the committee’s report. AGM The AGM will be held at the offices of Stephenson Harwood, 1 Finsbury Circus, London EC2M 7SH on Wednesday 18September 2024 at 10.00 am. Further details are included in the Notice of AGM on page 88. I look forward to welcoming shareholders attending in person. If you are not able to attend in person, or prefer to vote by proxy, but have questions for the Board, please contact the Company Secretary at [email protected]. Outlook The new capacity due online in the coming months, including the 200 MW asset in California, represents a step-change for the Company as we extend our operational and geographical diversification even further. Despite recent issues for our sector, I remain fully confident that this diversified approach will continue to deliver strong overall returns while contributing to the decarbonisation needed across the global energy system. Patrick Cox Chair 12 July 2024 Investment Manager’s Report 6 Gore Street Energy Storage Fund plc Strategic Report Strategic Report Annual Report for year ended 31 March 2024 7 Investment Manager’s Report Operational Highlights: • The portfolio generated £41.4 million of revenue during the fiscal year. This amounted to £28.4 million in operational EBITDA. – The Company achieved an average revenue per MW/hr of £15.1, highlighting the stable revenue profile of the Company. – With its international portfolio, the Company averaged £19.6 per MW/hr over the period, 2.2x the GB portfolio, inclusive of liquidated damages. – The Company achieved an operational dividend cover of 0.78x and a fund-level dividend cover of 0.56x. – Energised capacity increased by 45% to 421.4MW, following the successful energisation of Stony (79.9MW) and Ferrymuir (49.9 MW) As of the date of publication, both assets are revenue generating. – Of the 332MW of assets in construction due to come online over the next 7 months, 275MW / 475MWh is eligible to benefit from an investment tax credit of between 30-40% of qualifying capital expenditure through the Inflation Reduction Act, which was passed in late 2022. The Investment Manager expects the Company to benefit from a cash inflow in the range of $60 million to $80 million. • The Company continued to show good liquidity management. As of 31 March 2024, the Company had £60.7 million in cash or cash equivalents, as well as £58.6 million in debt headroom on its existing debt facilities, sufficient to cover all contractual obligations and build out the Company’s portfolio to over 750MW. – As of 31 March 2024, the Company’s gearing was 6.5% of GAV. • The Company increased its asset base on the Irish Grid to 385MW, of which 130MW is operational, following the acquisition of a 51% stake in a 75MW pre-construction energy storage project (Project Mucklagh) located in the Republic of Ireland. • The Company’s assets continued to support the energy transition by providing services needed to integrate more renewable energy sources into the grid. During the reporting period, the operational portfolio avoided 15,178 tCO 2 e and stored 26,232MWh of renewable electricity. Net Asset Value: • NAV as at 31 March 2024 was £541 million, bringing NAV total return since IPO to 48.4% • NAV per ordinary share of 107.0 pence per share The main drivers of NAV during the period were updated macro assumptions, reflecting the current environment in which the Company was operating in, as well as pro-active management, resulting in continued strong cash generation and a material increase in energised capacity. Table 1: Movement in NAV since March 2023 Movement in NAV since March 2023 Changes in NAV (PPS) NAV March 2023 115.6 Offering Proceeds - Dividends -7.4 Revenue Curves -7.0 Inflation -1.5 Discount Rates -2.8 Net Portfolio Returns 10.1 NAV March 2024 107.0 The Investment Manager’s Report provides readers with an explanation of the backdrop in each of the markets the Company operates in. It details the revenues generated, how the assets performed, and the specific drivers of the portfolio’s NAV. It also includes a Q&A with the Investment Manager’s CIO and CFO, Sumi Arima, where he talks about the Company’s strategy and his thoughts on the markets in which the Company operates. The Investment Manager’s CEO, Dr Alex O’ Cinneide, then gives his views on the Company’s performance, and outlook of the future. For readers wishing to jump to specific sections, the contents are listed below: 8 Portfolio 10 Revenue Generation and Portfolio Performance 21 Q&A with Sumi Arima 25 NAV Overview & Drivers 30 Message from Alex O’Cinneide 31 Delivery against strategy 31 Outlook A glossary of industry terms can be found on page 104. Dr Alex O’Cinneide CEO of Gore Street Capital, the Investment Manager “I’m proud to report the Company continued to achieve growth while demonstrating leadership and resilience during an extremely turbulent period. The international portfolio continued to deliver consistent average revenue of £15.1 per MW/hr through best-in-class operational performance and capital management. The Company achieved an operational dividend cover of 0.78x for the year from an average operational fleet of 311MW. With the energised capacity reaching 421MW and 332MW more to follow in the coming seven months, all while maintaining a prudent approach to leverage, the Company is well-positioned to increase dividend cover and continue delivering value for shareholders by generating robust and stable cash flow from its well diversified asset base.” Portfolio 1.25 GW Total portfolio (GW) 1.62 GWh Total portfolio (GWh)+ 421.4 MW Energised 826.8 MW Pre-construction and construction phase projects Portfolio in GB & Northern Ireland (GBP) Asset name Capacity Ownership 1 Boulby 6.0 MW | 6.0 MWh 99.9% 2 Cenin 4.0 MW | 4.8 MWh 49.0% 3 POTL 9.0 MW | 4.5 MWh 100.0% 4 Lower Road 10.0 MW | 5.0 MWh 100.0% 5 Mullavilly 50.0 MW | 21.3 MWh 51.0% 6 Drumkee 50.0 MW | 21.3 MWh 51.0% 7 Hulley 20.0 MW | 20.0 MWh 100.0% 8 Lascar 20.0 MW | 20.0 MWh 100.0% 9 Larport 19.5 MW | 19.5 MWh 100.0% 10 Ancala 11.2 MW | 11.2 MWh 100.0% 11 Breach 10.0 MW | 10.0 MWh 100.0% 12 Stony 79.9 MW | 79.9 MWh 100.0% 13 Ferrymuir 49.9 MW | 49.9 MWh 100.0% 14 Enderby Energisation | Sep 2024 100.0% 15 Middleton Grid Availability | 2026 100.0% Republic of Ireland & Germany (EUR) Asset name Capacity Ownership 16 Cremzow 22.0 MW | 29.0 MWh 90.0% 17 Porterstown 30.0 MW | 30.0 MWh 100.0% 1 7.1 Porterstown Expansion Energisation | TBC 100.0% 18 Kilmannock Grid Availability | 2026 100.0% 18.1 Kilmannock Expansion Grid Availability | 2027 100.0% 19 Mucklagh Grid Availability | 2028 51.0% North America (USD) Asset name Capacity Ownership 20 Snyder 9.95 MW | 19.9 MWh 100.0% 21 Westover 9.95 MW | 19.9 MWh 100.0% 22 Sweetwater 9.95 MW | 19.9 MWh 100.0% 23 Big Rock Energisation | Dec 2024 100.0% 24 Dogfish Energisation | Feb 2025 100.0% 25 Wichita Falls Grid Availability | 2025 100.0% 26 Mesquite Grid Availability | 2025 100.0% 27 Mineral Wells Grid Availability | 2025 100.0% 28 Cedar Hill Grid Availability | 2025 100.0% Grid Availability Energised Assets * MWh included for operational sites + Based on expected system duration and may be subject to change Strategic Report 8 Gore Street Energy Storage Fund plc Assets under construction / pre-construction Energised Assets Strategic Report Annual Report for year ended 31 March 2024 9 6 5 1 13 8 7 9 10 16 23 17 19 18 12 4 2 15 11 14 3 20 21 22 24 25 2627 28 Strategic Report 10 Gore Street Energy Storage Fund plc Revenue Generation and Portfolio Performance Renewable energy generation has continued to grow across the markets in which the Company operates, enabled by increased flexible capacity on each grid system. Battery energy storage systems (BESS) deliver value in these jurisdictions by providing frequency services, load shifting, grid balancing, energy arbitrage, and by ensuring reliability of supply during periods of stress caused by extreme temperatures and varying wind conditions. During the fiscal year, the fundamentals driving revenues in Ireland and Texas were even stronger than the previous year. Integration of rising levels of wind generation continued to drive the Irish grid’s flexibility needs and revenues for BESS, which has become a crucial technology within the ancillary services market. Electricity demand in Texas, meanwhile, continued its upward trend, increasing the system’s need for fast-acting reserves. The continued deployment of solar in Texas has also driven the “Energy Reliability Council of Texas” (ERCOT) grid operator to introduce services capable of responding to grid load ramps, which have become an increasingly significant challenge during the evening ramp-down of solar generation. German ancillary services experienced a drop in value as gas supplies were less constrained than in the previous financial year. Wholesale trading, meanwhile, offered significant opportunity throughout the year, as both supply and demand sought to rebalance positions in the continuous trading markets. This created high liquidity for traders, resulting in more lucrative opportunities for BESS operators. Germany also permitted and facilitated easier access for energy storage to new revenue streams such as aFRR, for which the German asset is now prequalified, FCR prices saw a rise post period in Germany, which can be credited to high solar penetration suppressing mid-day energy prices, increasing the opportunity cost for traditional thermal generation to run to deliver FCR services. The GB market was subject to one of the most challenging years to date for BESS as large amounts of energy storage capacity continued to be added to the grid and National Grid introduced changes to the ancillary services procurement methodology, causing ancillary services revenues to fall as a result of increased competition. Trading markets did not provide relief to tight ancillary services markets over the winter, driven by lower gas prices than in previous years and milder temperatures. Changes to market operation through introduction of the Enduring Auction Capability (EAC) for dynamic markets and the Open Balancing Platform in the Balancing Mechanism (BM) did not provide the increased opportunity the market had anticipated. The difference in dynamics driving these markets highlights the benefits of the Company’s globally diversified portfolio. The portfolio generated a 5.5% uplift in revenues compared to the previous financial year. This global approach has made the portfolio less susceptible to revenue variances over time caused by cyclic downturns in individual markets. During the fiscal year, the portfolio increased the number of services offered to the market compared to the previous year (aFRR in Germany, ECRS in Texas, Balancing Reserve in GB). The assets were also more actively trading than in previous years, with 7% of revenues coming from trading, versus 3% in the previous financial year. The Investment Manager has continuously sought to maximise the performance of the portfolio in each market. Targeted decision-making, such as changing Route to Market providers “RTMs” in multiple geographies, allowed the portfolio to benefit from uplifts in performance. Continuous monitoring of the markets, asset performance, and service delivery also enabled the Investment Manager to identify points of improvement to the portfolio’s overall performance, which continues to show a robust and healthy level of revenue generation independent of individual market conditions. The announced addition of new services (Quick & Slow Reserve in GB, Dispatchable Reliability Reserve Service (DRRS) in ERCOT, Capacity Market in Germany), coupled with market changes (REMA in GB, Future Arrangements for System Services and Day Ahead System Service Auction in Ireland), are expected to produce new opportunities for BESS. Great Britain Table 2: Overview of the GB Market TSO National Grid GB Portfolio 189.6 MW / 180.9MWh Market Share 5% 1 Revenue during the period (m) £10.1 2 Revenue per MW/yr £77,300/MW Revenue per MWh/yr £82,900/MWh 1 3,884 MW buildout at 31st March 2024, from MODO GB Asset Database 2 The figure includes c.£3.0m of Liquidated Damages Strategic Report Annual Report for year ended 31 March 2024 11 The GB market experienced a significant decrease in generated revenues from the previous financial year. Market indices indicate a 69% fall in overall market performance between FY23/24 and FY22/23, on a per MW basis, primarily driven by increased competition in ancillary services markets and suppressed volatility in the traded markets throughout the year. GB added 1.4 GW of new BESS on the grid during FY23/24, the highest increase seen to date, while average EFA block ancillary service procurement levels increased by only 1 GW compared to the previous financial year. This uneven increase led to saturation of ancillary services markets, especially Dynamic Containment/Moderation/Regulation (DC/M/R). A further contributor to market decline was the phase-out of dynamic FFR into November 2023, reducing the number of markets accessible to BESS. Average DC prices through the year reduced by 71% in comparison to the previous financial year. In November 2023, National Grid ESO also introduced EAC, which allowed bidding between multiple dynamic services simultaneously and negative price bidding. The platform contributed to a further reduction in dynamic services pricing, with DC/M/R seeing a weighted average drop in prices of 32% in November 2023 versus October 2023. Figure 1: Average Monthly EFA Price of Dynamic Services £0 £10 £20 £30 £40 £50 Mar 2024 Feb 2024 Jan 2024 Dec 2023 Nov 2023 Oct 2023 Sep 2023 Aug 2023 Jul 2023 Jun 2023 May 2023 Apr 2023 Mar 2023 Feb 2023 Jan 2023 Dec 2022 Nov 2022 Oct 2022 Sep 2022 Aug 2022 Jul 2022 Jun 2022 May 2022 Apr 2022 2,350 DM DC DR (£ / MW / h) Simultaneously, regular trading opportunities did not materialise for BESS as energy prices decreased compared to the previous financial year. Trading in wholesale markets, therefore, did not provide a significant upside to ancillary services participation, further contributing to market saturation as assets did not have a consistent alternative revenue source. Balancing Mechanism (BM) skip rates of batteries were widely criticised by BESS operators who grew increasingly frustrated by the apparent preference of the system operator to utilise thermal generators to provide system action rather than BESS, which were reportedly more cost-effective. The introduction of National Grid’s new platform to administer the BM (Open Balancing Platform or OBP) in December 2023 sought to rectify this by automating part of the BM process, allowing the grid to take more decisions and dispatch from a wider asset base. Since the introduction of the OBP, BESS have seen some increase in BM participation, however, this has not had a material impact on the overall revenues of batteries while increasing competition in the marketplace between smaller assets. Further changes came to the market in March 2024 as Balancing Reserve (BR) was introduced for BM-registered sites to act as a payment for sites that are to be made available in the BM. BR did not significantly impact BESS revenue at the close of the financial year, though operational information is currently limited. The annual Capacity Market (CM) auctions cleared at a high price, driven by increasing requirements set by The Department for Energy Security and Net Zero (DESNZ) and limited existing capacity. The Company secured a combined 251.5MW of non-derated Capacity Market contracts across both the T-4 CM auction which cleared at a price of £65/kW/year and the T-1 CM auction, which cleared at £35.79/kW/year. These agreements will provide an additional c.£1.7 million in two delivery years, alongside existing CM commitments. All GB assets, therefore, continue to have ongoing CM contracts. At the beginning of the reporting period, BESS buildout reached its highest rate on the grid to date. However, Q4 saw the lowest build-out of capacity since Q2 of FY22/23. This points towards the cyclical nature of the GB market as capacity build-out starts to slow down as a result of lower revenues. As grid volatility and ancillary services procurement increases in line with the deployment of further wind and solar across the grid, the trend of lower BESS buildout should allow increased opportunities in the future for current market participants. Strategic Report 12 Gore Street Energy Storage Fund plc Ireland Table 3: Overview of the Irish Market TSO EirGrid & SONI Irish Portfolio 130.0 MW / 72.6 MWh Market Share 15% 3 Revenue during the period (m) £ 23.6 Revenue per MW/yr £181,600 Revenue per MWh/yr £325,200 The Delivering a Secure Sustainable Electricity System (DS3) initiative holds a pivotal role within the combined Irish energy system by facilitating the integration of non-synchronous renewable energy sources, primarily wind power. At the heart of DS3’s functionality lies the System Non-Synchronous Penetration (SNSP) scalar, a real-time metric that gauges the level of intermittent renewable generation and net interconnector flows within the single electricity market of Northern Ireland (NI) and the Republic of Ireland (ROI), defined as a percentage of electricity demand on the system. DS3 rates increase as SNSP increases, meaning that batteries delivering DS3 services see increasing remuneration per hour for their response at times when the system needs it the most. Throughout the reporting period, as the buildout of renewable generation continued across the Irish market, the system encountered a substantial increase in both absolute levels and volatility of wind power generation, exhibiting an average SNSP increase of 27% compared to the previous year. This resulted in a notable c.40% year-on-year surge in DS3 revenue. In addition, the high availability maintained by assets throughout the year contributed to a consistent monetary performance by the Irish assets. Wholesale trading, or energy arbitrage, continued to play an important role as opportunities were capitalised on during periods of high demand and low wind generation, resulting in a spike in Day-Ahead or Intra-Day pricing. The Investment Manager’s dynamic approach executed by the Company’s RTM partner allowed for the reallocation of higher volumes into this wholesale revenue strategy rather than solely relying on DS3. This enabled additional access to revenues, especially for Porterstown in ROI that has a fixed price capped contract. The Company successfully secured lucrative CM contracts at £100/kW/year for Mullavilly and Drumkee in the T-4 27/28 auction and £128/ kW/year for Porterstown in the T-1 24/25 auction, adding to the existing CM contracts in place during the fiscal year. The diversification of revenue from multiple sources surpassed forecast projections, resulting in a significant performance increase of 41% for NI and 23% for ROI compared to the previous reporting period. Wind volatility is expected to continue to shape Ireland’s dynamic electricity market structure, with BESS positioned at the forefront of maintaining grid security and stability to support the increase in SNSP to up to 95% by 2030 from up to 75% today and aid in achieving Ireland’s 2050 net-zero goals. Figure 2: Revenues are driven by high levels of system non-synchronous penetration (SNSP) linked to wind generation, with 60-70% and >70% penetration subject to 4.7 and 6.3 tariff multipliers, respectively. Despite consistent mid-range average SNSP over the last 15 months, the share of gold and green bars indicates the impact on revenues during periods of higher SNSP spread across a prolonged period. >70% 60-70% 50-60% <50% Average (%) 0 20 40 60 80 100 Jan 2024 Feb 2024 Mar 2024 Apr 2023 May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 (%) (SNSP Index) 3 849 MW of BESS capacity in both ROI and NI, based on Aurora Ireland Flexible Energy Market Report May 2024 Strategic Report Annual Report for year ended 31 March 2024 13 Germany Table 4: Overview of the German Market TSO 50 Hertz, Amperion, Tennet, Transnet BW German Portfolio 22.0 MW / 29.0 MWh Market Share 2% 4 Revenue during the period (m) £1.8 Revenue per MW/yr £80,000 Revenue per MWh/yr £60,700 Both the German and broader European energy markets saw decreases in energy prices during the reporting period that impacted the revenues available to BESS. Gas and electricity wholesale markets prices experienced reductions of 69% and 62%, respectively, compared to the previous FY as a result of milder temperatures during the winter, increased availability of gas storage, and a steady influx of liquefied natural gas (LNG) from global sources as Germany diversified its supplies away from Russia. EU regulation aimed at ensuring gas stores are replenished led Germany to import an increasing volume of gas from the United States and Qatar. The normalised gas prices served to reduce energy price volatility, contributing to a 50% decrease in Frequency Containment Reserve (FCR) prices compared to the previous reporting period. The Company’s Cremzow asset strategically diversified its participation beyond a sole focus on FCR in anticipation of these market challenges. The Investment Manager’s engagement of a new RTM provider offering algorithmic trading methods, led to enhanced flexibility and revenue potential through high-frequency trading, which mitigated the risks associated with an FCR-centric strategy. Cremzow was also successfully prequalified for both sub-services of automatic Frequency Restoration Reserve (aFRR) – energy and capacity – following the PICASSO reform, which enabled participants to deliver balancing energy for 15 minutes instead of the previous requirement of at least four hours. This combined approach, leveraging additional services and algorithmic trading, allowed the equivalent capacity from the Company’s German asset to surpass the revenue achievable from a strategy focused solely on FCR by 43% across the reporting period. Despite the increase in LNG supply and the milder temperatures leading to price dips, the structural deficit in European natural gas persists due to the shortfall from lost Russian imports. European energy prices remain vulnerable to supply disruptions or spikes in demand, especially during winter, hot summers, or periods of high renewable energy penetration on the system increasing the need for flexibility. In these situations, BESS assets like Cremzow play a pivotal role in providing flexibility services to stabilise the grid and meet fluctuating energy demands. Post-period the Company has begun accessing a broader spectrum of revenue streams with the commencement of aFRR capacity in May 2024. This strategic positioning underscores the significance of enhancing market resilience despite the challenges posed by market dynamics. This increased market access also positions the Company to capitalise on upcoming opportunities as Germany grows its energy storage ambitions. In December 2023, the Federal Ministry for Economic Affairs and Climate Protection (BMWK) published an electricity storage strategy designed to remove barriers for the asset class to support Germany’s renewable energy targets for 2035. This was followed by the announcement of a CM mechanism, set to launch in 2028, similar to those used in other markets to secure long-term contracted revenue. 4 As at 31 March 2024, German had 1,353 MW of grid scale BESS capacity operational Strategic Report 14 Gore Street Energy Storage Fund plc Texas Table 5: Overview of the Texas Market TSO ERCOT Texas Portfolio 29.85 MW / 59.7 MWh Market Share 1% 5 Revenue during the period (m) £ 6.0 Revenue per MW/yr £200,400 Revenue per MWh/yr £100,200 Assets connected to the ERCOT market in Texas saw overall increases in revenue over the reporting period in comparison to the previous fiscal year, driven primarily by volatility over Q2. Temperatures continue to be a key driver of prices in Texas, with overall demand on the grid increasing year-on-year. Peak summer demand for 2023 was 5 GW higher than the equivalent peak in 2022, contributing to low available headroom on the grid and driving reserve prices and scarcity pricing. In June 2023, the grid operator introduced the ERCOT Contingency Reserve Service (ECRS), an additional reserve service accessible to BESS. The more constraining and demanding requirements of ECRS participation in comparison to Responsive Reserve Service (RRS) lead to ECRS carrying a significant premium throughout the summer, with the average price of ECRS turning out 77% higher than RRS in FYQ2. The operational Texan sites made 72% of their overall revenue in this quarter, as the summer proved once more to be the most lucrative period of the year, driven by high temperatures. The Investment Manager’s decision to change RTM in the months prior to unlock access to more markets proved beneficial, allowing the assets to capture the peak ECRS pricing in August. As load decreased into Autumn, and with the start of the permitted ERCOT maintenance windows, renewable energy generation as a factor of total demand increased. This invariably led to high price volatility throughout the ERCOT system. In West Texas, where the operational portfolio sites are located, high levels of wind provided lucrative trading opportunities as the assets participated increasingly in trading. Texas did not see significant disturbance from winter storms compared to previous years (winter storms Uri and Elliott). The FY22/23 storms led to considerable increases in both energy and ancillary services prices, as they reduced the amount of operational capacity on the grid and impaired infrastructure. In January 2024, winter storm Heather brought freezing temperatures to Texas for multiple days, however, the impact on grid infrastructure was limited. Reserves prices saw an increase over January, with an average ECRS price across three days of $170/MW/hr, raising the month’s average to $18.8/MW/hr. The remainder of Q4 was mild, leading to low opportunity in ancillary services and reduced opportunity in wholesale trading, although milder conditions led to more trading as a percentage of revenue, with 20% coming from trading in Q4 compared to 11% in Q3. Overall, the Texan portfolio outperformed the previous year by 57%. RRS saw a 22% increase in average price compared to the previous year, however, the distribution of RRS pricing through the year was comparatively more skewed towards higher prices. Less frequent but more exceptionally high-priced days pushed the overall average upwards at the expense of mid- and low-priced days. This further illustrates the value in capturing periods of peak pricing, as well as designing alternative strategies on days of lower prices. 5 3,243 MW stand-alone BESS buildout at 31st March 2024, from MODO ERCOT Asset Database Strategic Report Annual Report for year ended 31 March 2024 15 California Table 6: Overview of the Californian Market TSO CAISO Current Phase In Construction Target Energisation December 2024 California’s grid has continued to accommodate BESS, with a further 6.8 GW planned for deployment in the 2024 calendar year 6 . This increase aligns with the additional renewable energy on the grid, as a further 4.8 GW of solar energy capacity is planned to interconnect in 2024. Such increases in renewable generation, especially from solar, have continued to drive the load shape towards a “duck-curve”. High renewable penetration on the grid has increasingly led to suppressed energy pricing during peak solar generation hours. This trend is expected to yield frequent negative pricing during “shoulder months”, where the load is at its lowest, increasing availability of spreads available to BESS for trading. At the end of the previous financial year, CAISO and the CPUC approved the implementation of the mid-term reliability programme. As a result of this decision, the relative scarcity of projects available to deliver Resource Adequacy (RA) contracts has led to an increase in RA contract values. As an eligible participant, batteries that are not currently committed to an RA agreement have been able to capitalise on this opportunity. These long-term contracts are expected to account for a significant proportion of revenue (up to c.40%), presenting a valuable opportunity for eligible battery projects, including the Company’s 200 MW/400 MWh Big Rock asset. 6 S&P Global – Outlook 2024: CAISO battery boom continues with over 6 GW planned in 2024 Strategic Report 16 Gore Street Energy Storage Fund plc Overall portfolio performance The portfolio generated £41.4m in revenues an increase of 5.5% compared to the previous year (2023 Financial Year £39.3m), with weighted annualised revenue of c. £130,000/MW (£15.12/MW/hr). This was achieved through geographical diversification and the Company’s unique ability to generate revenues even when some markets were hindered by seasonal variation or saturation. Table 7: Summary of Portfolio Performance £(000’s) % within grid GB 189.6MW / 180.9 MWh Ancillary Services 3,226 32% Capacity Market 2,007 20% Wholesale Trading 1,032 10% Other 7 3,795 38% Total 8 10,059 100% Ireland 130MW / 72.6 MWh Ancillary Services 22,474 96% Capacity Market 734 3% Wholesale Trading 318 1% Other 82 0% Total 23,608 100% Germany 22MW / 29 MWh Ancillary Services 953 54% Wholesale Trading 807 46% Other – 0% Total 9 1,760 100% Texas 29.85MW / 59.7 MWh Ancillary Services 5,128 86% Wholesale Trading 633 10% Other 223 4% Total 5,983 100% Portfolio Total 41,411 Market Revenue £(000’s) £(000’s)/MW/yr £/MW/hr £(000’s)/MWh/yr £/MWh/hr GB £10,059 £77 £8.80 £83 £9.44 Ireland £23,608 £182 £20.67 £325 £37.02 Germany £1,760 £80 £9.11 £61 £6.91 Texas £5,983 £200 £22.82 £100 £11.41 Weighted Average £41,411 £133 £15.12 £147 £16.69 Total Revenue £(000’s) Jun-end 2023 Sep-end 2023 Dec-end 2023 Mar-end 2024 GB £1,859 £1,775 £1,647 £4,777 Ireland £3,931 £5,797 £7,145 £6,736 Germany £340 £509 £530 £381 Texas £798 £4,325 £338 £522 Total Revenue £6,928 £12,406 £9,660 £12,416 Operational Capacity 291.6 MW 291.6 MW 371.5 MW 371.5 MW 7 Includes REPs, ABSVD, NIV, and Liquidated Damages. 8 The Company holds a 49% ownership interest in Cenin (4.0 MW) and retains 49% of the generated revenue. 9 The Company holds a 90% ownership interest in Cremzow (22 MW) and retains 90% of the generated revenue, while Enertrag maintains a minority stake in the asset. Strategic Report Annual Report for year ended 31 March 2024 17 Figure 3: Total Revenue (in £000s/MW) by Grid since IPO Mar-end 2022 Dec-end 2021 Sep-end 2021 Jun-end 2021 Mar-end 2023 Dec-end 2022 Sep-end 2022 Jun-end 2022 Sep-end 2023 Jun-end 2023 Mar-end 2021 Dec-end 2020 Sep-end 2020 Jun-end 2020 Mar-end 2020 Dec-end 2019 Sepend 2019 Jun-end 2019 Mar-end 2019 Dec-end 2018 Sep-end 2018 Jun-end 2018 Revenue per Grid (£000’s/MW) EirGrid/Soni - Revenue/MW (£)National Grid - Revenue/MW (£) ERCOT Grid - Revenue/MW (£)European Grid - Revenue/MW (£) Total Revenue per MW (£) 0 20 40 60 80 100 120 140 Mar-end 2022 Dec-end 2021 Sep-end 2021 Jun-end 2021 Mar-end 2023 Dec-end 2022 Mar-end 2024 Dec-end 2023 Sep-end 2022 Jun-end 2022 Sep-end 2023 Jun-end 2023 Mar-end 2021 Dec-end 2020 Sep-end 2020 Jun-end 2020 Mar-end 2020 Dec-end 2019 Sep-end 2019 Jun-end 2019 Mar-end 2019 Dec-end 2018 Sep-end 2018 Jun-end 2018 Revenue per Grid (£000’s/MW) EirGrid/Soni – Revenue/MW (£)National Grid – Revenue/MW (£) ERCOT Grid – Revenue/MW (£)European Grid – Revenue/MW (£) Total Revenue per MW (£) 0 20 40 60 80 100 120 140 160 Figure 4: Financial Performance with Installed Capacity Progression Total installed MW Forecast installed MW Total Revenue Total EBITDA 200 400 600 800 1,000 1,200 1,400 0 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Total Installed Capacity (MW) Total Revenue & EBITDA (£000's) Mar-end 2022 Dec-end 2021 Sept-end 2021 Jun-end 2021 Mar-end 2023 Dec-end 2022 Sept-end 2022 Jun-end 2022 Sept-end 2023 Jun-end 2023 Mar-end 2021 Dec-end 2020 Sept-end 2020 Jun-end 2020 Mar-end 2020 Dec-end 2019 Sept-end 2019 Jun-end 2019 Mar-end 2019 Dec-end 2018 Sept-end 2018 Jun-end 2018 Dec-end 2023 Mar-end 2024 ANNUAL 2024 ANNUAL 2025 ANNUAL 2026 ANNUAL 2026 ANNUAL 2028 Strategic Report 18 Gore Street Energy Storage Fund plc Asset Performance The portfolio performed well with average availability incorporating all commercial operations downtime, including planned preventive maintenance, exceeding 93% across the reporting period. Great Britain: The GB fleet performed well during the period, with the fleet’s average availability broadly in line with the consolidated portfolio average. Larport’s availability was impacted due to a substation transformer failure, which was resolved in January without ongoingconcern. Ireland: Project performance in Ireland remains a highlight for the portfolio, with over 99% availability over FY 24/25 (a small uplift on FY 22/23). All Irish projects responded to the requirements of DS3 services without issue. As in FY22/23, all DS3 events were responded to correctly and the projects continue to generate revenue in these services without penalties. Germany: The Cremzow project comprises two phases, a 20 MW phase and a pilot 2 MW phase. The 20 MW phase performed well during the period and met expectations, however, the 2 MW phase had lower availability as it uses older technology. The Investment Manager is currently exploring options to enhance the availability of the 2 MW phase in the long term. US - Texas: The three operational projects (Snyder, Sweetwater and Westover) performed well in the first half of the reporting period, which was critical for project revenues as summarised in the revenue performance section of this report. Downtime was mostly driven by inverter failures, although communications network connection failures drove some outages. These issues have been addressed by installing redundancy measures such as satellite backup. The Investment Manager has been working closely with the inverter manufacturer and O&M provider to identify measures to upgrade inverters at each site (some firmware updates and upgrades are now completed, with more upgrades due in May 2024). Preventative maintenance is being coordinated to maximise each project’s capability for stable performance ahead of the summer season and peak pricing. Asset Management Developments This was another busy year for both the industry and the portfolio. Trials were completed with battery analytics providers and a suitable supplier was identified for supporting the wider portfolio. Insurers valued the material risk reduction of this approach, and the Investment Manager received and accepted quotes for improved premium terms for multiple sites in GB. Shortly after the reporting period, this approach extended to a global portfolio policy utilising the same monitoring and diagnosis software: it is believed this will be the first global policy of its kind for a portfolio of battery storage systems, highlighting the Investment Manager’s approach to thought leadership whilst leading by example. Additional projects (since Cremzow) are also being retrofitted with electrolyte vapour detection (an additional mitigation through hardware to avoid thermal runaway occurring), evidencing the Investment Manager’s commitment to best practices in safety for the fleet. The Investment Manager continued to identify and enact operational performance efficiencies. In GB, reduced prices were negotiated across the majority of O&M contracts and most asset management contracts were terminated in favour of in-house management enabled by the growing technical capabilities and experience of the Investment Manager. In Ireland, project warranties were reviewed and material cost savings were identified (effective Q1 FY24/25). The Investment Manager will deliver asset management activities for all three operational Irish projects moving forward. Engagement with RTMs in both Germany and Texas remains strong and will facilitate improved coordination and scheduling of downtime to best support revenue optimisation in these markets. Data-driven asset management will be a focus of FY24/25. Partners have been identified (with contractual negotiations underway) for the entire portfolio to support data collection, battery analytics, automated operational insight and live alerting. Many benefits are expected from this approach, such as increasing availability by quicker awareness of project faults and better decision-making for RTMs and commercial optimisation teams. Strategic Report Annual Report for year ended 31 March 2024 19 Project Progress Overview Stony (79.9 MW – Great Britain) – Operational Construction at Stony was successfully completed in July 2023, and the site was subsequently energised in September 2023. The commissioning process went smoothly, and the asset began providing service in December 2023. Operational notifications have been received from the distribution network operator, and the asset is now active across ancillary services, trading and Capacity Market. Ferrymuir (49.9 MW – Great Britain) – Operational Works at Ferrymuir were disrupted by the insolvency of the contestable works contractor, Smith Brothers Contracting. The Investment Manager secured critical long lead time equipment and arranged the appointment of a replacement independent connection contractor. Working with the utility operator, Scottish Power, the completion of the contestable works was negotiated, and the site was energised in February 2024. Revenue generation from the asset began in July 2024. As site take-over was scheduled to occur at the end of May 2024, but the milestone was not achieved, the Company is pursuing its contractual remedies to compensate for lost revenues due to those delays. Enderby (57 MW – Great Britain) Pre-commencement planning conditions were fully discharged, and the contractors mobilised to site in late Spring 2023. Rapid progress was made on the completion of the civil engineering and drainage works at the BESS site and all of the infrastructure is now installed. The batteries, power conversion system (PCS) and substation are delivered, installed and ready for energisation. Connection to the grid has been prevented by delay to National Grid’s protection system on account of rectification of security vulnerabilities. National Grid have completed their works and energisation is to commence in August. Dogfish (75 MW – Texas) At Dogfish, the transformer, switchgear and ancillary high-voltage equipment were procured in September ahead of the close of the EPC to minimise the impact of long lead manufacture and delivery on project schedule. The EPC was signed with Nidec in December and design and procurement are well advanced. Physical works of a significant nature have been completed at the site to safe-harbour 2023/24 energy community designation for the investment tax credit 10% enhancement. Works are on track for energisation in February 2025. This is later than previously reported owing to selection of Nidec as the EPC delivery partner after the opportunity for supplier financing arose. Negotiation of the finance agreements together with re-opening EPC negotiations took time but offered lower risk and better alignment with the Manager’s capital allocation strategy. Big Rock (200 MW – California) Completion of pre-commencement development obligations was completed through the summer of 2023, and ministerial permits were issued by the County ahead of mobilisation. All major procurement is complete for Big Rock and works are progressing well on site. The BESS EPC contractor has completed the access roads, grading and drainage works. All of the foundation piles are installed, and the BESS enclosures have begun to be delivered to the site. The substation and overhead line construction are progressing on schedule while transformer manufacture is complete, and delivery is planned for June. Line outage and switchyard energisation are being scheduled with the local utility for September – system conditions allowing – with commissioning on the BESS to follow. The BESS is on track to be energised in December 2024. DEVELOPMENT AND PRE-CONSTRUCTION The construction schedule for Porterstown II has been revised to accommodate several important factors. Notably, there was a significant 14% reduction in battery prices 10 between 2022 and 2023, with this trend extending into 2024. The Investment Manager has, therefore, made an adjustment to the construction schedule to capitalise on the declining prices and policy and liquidity considerations in order to maximise returns. This strategy is consistent with the Investment Manager’s history of minimising capex through various means, such as strategic financing, exploiting pricing and policy trends. The Investment Manager is also cognisant of the current interest rate environment and signals from the BOE, and its use of debt in the current environment. Therefore, this adjustment to the construction schedule is viewed as a proactive step that is expected to result in a higher asset IRR and a good example of active management. The Investment Manager will update the market in the near term on construction dates. The Investment Manager has completed applications for new planning consents for Kilmannock I and II to take advantage of the latest technology configurations and the nature of the site topography. The consent for Kilmannock I and for Mucklagh, the new addition to the portfolio as of March 2024, has been received. Pre-commencement planning conditions for Kilmannock I are being discharged with an archaeological investigation most recently completed in April 2024 without any finds. At Middleton, similar archaeology works for a pre-commencement condition are planned, and work is underway on construction environmental management plans, drainage design and system design. Long lead procurement for the main grid transformers for Kilmannock and Middleton is underway. Projects are in good readiness to proceed to construction pending final capital allocation. Battery prices have continued to fall through 2023 and 2024, reinforcing the Investment Manager’s decision not to overbuild assets, ensuring optimal capacity to serve the market opportunities present and configuring projects for future modification. Rapid growth of 10 Source: Bloomberg Strategic Report 20 Gore Street Energy Storage Fund plc battery manufacturing has outpaced demand, which is leading to significant downward pricing pressure on battery makers. Looking ahead to 2025, US manufacturers benefiting from IRA subsidies are expected to further intensify competition, potentially driving prices further down. For projects currently in procurement, the Investment Manager has secured price reductions of between 8% to 34% from Q3 2023 to Q2 2024, for combined battery module and container offers. Figure 5:Average Lithium-ion battery pack and cell price (volume weighted) ERCOT NI ROI CAISO Portfolio Weighted AverageGERGB £000s/MW/Yr 14% reduction in 2023 100 120 140 160 180 200 220 2018 2019 2020 2021 2022 2023 $/kWh Table 8: Sites in construction Construction Capacity Target Energisation Stony 79.9 MW Energised Ferrymuir 49.9 MW Energised Enderby 57.0 MW Sep-24 Big Rock 200.0 MW Dec-24 Dogfish 75.0 MW Feb-25 Table 9: This table lists the expected availability of grid connections where contracts accepted and signed for pre-construction assets. Completion of development, procurement and ultimately construction will be scheduled to align with connection availability while optimising capital deployment. Other Portfolio Grid Availability PBSL2 TBC 11 Mineral wells 2025 Mesquite 2025 Cedar hill 2025 Wichita falls 2025 KBSL 1 2026 Middleton 2026 KBSL2 2027 Mucklagh 2028 11 Energisation target to be determined based on capex pricing and market opportunity. The Investment Manager expects to provide details in the Company’s Interim Report Strategic Report Q: What were the key milestones reached in the 2024 fiscal year? Unlike the previous reporting period, which was defined by a series of acquisitions that took the Company into three new international markets, FY23/24 was a milestone year in itself as the strength of the diversified strategy was illustrated. We have always believed that, as a responsible investor dedicated to delivering sustainable value to shareholders, diversification was the correct choice to lower risk and access as wide a range of revenue streams as possible. The consolidated portfolio over the reporting period has demonstrated why this choice was the right one by consistently delivering average revenue of £15.1 per MW/hr, or c.£133,000 per MW/year. We have been able to report this average figure throughout the year as strong performance in markets like Ireland and Texas offset the decline we’ve seen in GB and the normalisation of revenues in Germany following the previous reporting period’s unprecedented market conditions. This was particularly evident in FY Q2 driven by high volatility in the ERCOT market and our prequalification to deliver the new ECRS service. Reaching approximately £150/MW/hr for the month of August was a particular highlight as the Company’s highest monthly revenue per MW ever achieved from a single market. More important is that this story continued throughout the year, highlighting the uniquely stable revenue profile the Company has achieved through its diversification strategy. We also saw the confidence that this approach has inspired across the market, with contracts negotiated with strategic partners to secure growth, in part, on the basis of share issues. This allowed the Company to grow its portfolio in the lucrative Irish market with a minimal cash consideration, aligning interests between the Company and key stakeholders and demonstrating the value of our track record of success. Work is already well underway to continue to build on this record, with the Company’s biggest projects to date moving ahead at pace. Energisation of the 79.9 MW Stony asset in September was a key milestone, becoming the largest energised project to date within the portfolio, while progress at the prioritised US sites is positioning the Company to once again capitalise on its international presence through access to new revenue streams. We have been able to overcome the complexities of entry into California, one of the most regulated markets in the world, to progress the 200 MW Big Rock asset towards its targeted energisation date in December. The scale of this project compared to the Company’s first 6 MW asset in GB is a true reflection of its ambition, and the results we’ve seen this reporting period show how important it has been to overcome the challenges associated with entering new markets over the last six years to create a diversified and successful portfolio. Q: Did revenues emerge as expected over the reporting period? We underwrite our assets to declining revenues on the assumption that, as a first mover across multiple geographies, new market players would emerge and build out capacity to compete with the Company’s portfolio once the business case is proven and capital costs reduce. The GB market is the best example of this, having undergone cycles in which demand for grid balancing services exceeds supply, bringing new entrants into the market chasing high profitability. This inevitably leads to oversupply of capacity and a reduction in available revenues, causing new capacity additions to subside. What did surprise us over the reporting period is how much capacity continued to be built out in GB by peers with a single market strategy. The fundamental driver of increased system volatility that stems, in part, from higher penetration of renewables on the grid was not at the level required to support so much energy storage capacity coming online, which is why the GB market has experienced such suppressed revenues over the reporting period. This situation also effectively reinforces the decision to follow a diversified strategy, as the Company has been able to access a wide range of revenues across an international portfolio. Seasonal variations between regions continued to play a role in the revenues that emerged over the reporting period although in a slightly less pronounced way. In Ireland, for example, higher wind generation in the summer as well as winter months resulted in consistently stronger performance throughout the year as the Company’s assets helped to ensure stable integration of renewables. We anticipated higher overall revenues from ERCOT as a result of our transition to a more sophisticated revenue strategy, which we knew would provide access to a wider range of revenue streams. The Investment Manager is in regular contact with our partners in Texas as well as the grid operator to understand what volatility is expected on a quarterly basis. This meant we were prepared for the scale of opportunity achieved over the summer. As well as cushioning market decline in GB, the expected strong performance in Ireland and Texas also helped to reduce the impact of revenue reductions in Germany. This fall stemmed from a reduction in power prices compared to the 2022/23 period, which contained extreme gas market volatility as the EU raced to reduce its reliance on Russian gas supplies. With gas setting marginal prices for the power market, revenues available to the Company’s Germany asset were higher at that time compared to what we expected to see once the market resettled. With EU efforts firmly in effect over the latest reporting period, power prices returned to more normalised levels as predicted, causing a sharp fall in revenues compared to the previous year’s extreme prices. Our strategy for the year accounted for this predicted decline as we adopted a more data-driven, trading focused approach to broaden our activities beyond just ancillary services. Q&A with Sumi Arima Sumi Arima CIO and CFO of Gore Street Capital, the Investment Manager Strategic Report 21 Annual Report for year ended 31 March 2024 Strategic Report Q: How has the decline of GB revenues affected the Company’s consolidated revenue performance? The downturn in GB has been drastic, with a combination of saturation in ancillary services and reduced volatility in the wholesale market reducing the value that can be extracted from this single market. The decisions taken by the Company since establishing the energy storage asset class six years ago—to allocate capital across multiple, uncorrelated markets—have meant that the impact on the consolidated portfolio’s performance has been minor. We also appreciated the support of shareholders back in the 2022 General Meeting, where shareholders supported an amendment to allow the Company greater flexibility to invest outside of the UK and Ireland, reducing the minimum allocation to UK from 60% to 40% which further supported our diversification strategy. The Company has, in fact, increased its overall revenue on an absolute basis compared to the previous financial year due to the uptick we’ve seen in other geographies, highlighting the uniquely stable revenue profile of its diversification strategy. The average revenue of £8.80 per MW/hr we’ve seen in GB, including liquidated damages, compares to £19.6 per MW/ hr from the non-GB portfolio. With almost no correlation between GB revenue and non-GB revenue, the entire operational portfolio has been able to maintain consistent performance and reduce revenue volatility over half, as illustrated in the graphs below, compared to what would be achieved by a GB-only strategy. The confidence this provides for investors in the Company’s ability to deliver consistent returns is a result of the diversification strategy enacted by the Investment Manager and how capital has been allocated across five international markets to date. We are, therefore, committed to further reducing the Company’s exposure to GB as a proportion of capacity on a MWh basis to provide greater value for investors. Figure 6: Quarterly Revenue Volatility (GB Only) 0 5 10 15 20 25 Standard deviation: £5.15 per MW/hr Average revenue: £13.84 per MW/hr Jun-end 2021 Sept-end 2021 Dec-end 2021 Mar-end 2022 Jun-end 2022 Sept-end 2022 Dec-end 2022 Mar-end 2023 Jun-end 2023 Sept-end 2023 Dec-end 2023 Mar-end 2024 £ per MW/hr Figure 7: Quarterly Revenue Volatility (After Diversification) 0 5 10 15 20 25 Jun-end 2021 Sept-end 2021 Dec-end 2021 Mar-end 2022 Jun-end 2022 Sept-end 2022 Dec-end 2022 Mar-end 2023 Jun-end 2023 Sept-end 2023 Dec-end 2023 Mar-end 2024 Standard deviation: £2.42 per MW/hr Average revenue: £15.32 per MW/hr £ per MW/hr Markets like Ireland and Texas could experience similar cyclical declines as more capacity comes online and their markets become more saturated. The difference, however, is that these markets are adding renewables at a faster rate than we are seeing in GB, driving the fundamental economic case for energy storage. We will also be adding capacity in new markets with the scheduled energisation of the 200 MW Big Rock asset in California by the end of 2024, providing access to long-term contracted revenue from the high-value Resource Adequacy market. As with participation in other uncorrelated markets, this will contribute to revenue stability at a consolidated portfolio level. We are already seeing the current weaknesses of the GB market discourage new market entrants and capacity additions, potentially kickstarting the next cycle of recovery. Energy storage is a long-term asset experiencing volatility year by year but, as more renewables are added and the flexibility needs of grid operators increase, the crucial role of the asset class remains strong. Q: What is the Company’s view on GB market recovery? As the Company has a dedicated focus on delivering sustainable returns through its diversified approach, monitoring profitability over the long term rather than reacting to short-term trends is a key role fulfilled by the Investment Manager to ensure this is achieved. As one of the first active players in the GB market, we have seen high revenue years followed by overbuild and a subsequent reduction in available revenue from frequency services. This is the situation we find ourselves in today, with GB’s c.4 GW of battery energy storage offering more capacity to the ancillary services market than currently required. Wholesale trading revenue, although increasing, still does not offer high enough returns on a consistent basis to make up this shortfall and so value is more difficult to extract. Strategic Report 22 Gore Street Energy Storage Fund plc Strategic Report Strategic Report In the past this has led to under-build of new projects until profitability returns to previously seen levels and we are already seeing signs of that cycle continuing, with low-capacity additions to the GB fleet in FY Q4. We have remained prudent in our build strategy throughout these cycles, designing assets to suit available revenue streams while minimising capex—on a MW and MWh installed basis—with the optionality to retrofit with additional duration when market opportunities warrant the additional capital expenditure. While the timeline for recovery remains unclear, we are seeing National Grid ESO continue to develop new products and capabilities to better utilise the unique capabilities of battery energy storage systems. Higher revenue generation could, therefore, be on the horizon in GB but the timing of this recovery is a complex question. It is largely dependent on the pace of renewable deployment, the grid operator’s frequency service procurement needs, the global gas market, and the weather over the coming winter period. Any one of these factors could result in a switch to high revenue generation for the Company’s GB portfolio, but it is impossible to forecast the exact timing. This illustrates the underlying value of the Company’s diversified operational portfolio as it is able to deliver returns for investors throughout these market cycles from across four uncorrelated markets to date, with CAISO in California soon to follow. Q: Would you ever consider a tolling agreement to offset revenue risk in the future? We regularly test the market for tolling agreements and are yet to be convinced they offer an attractive alternative or addition to our diversified approach to revenues. The recently and widely reported large tolling agreement in GB appears to fall in line with the price levels we’ve seen when testing the tolling market and, while it may serve to improve confidence among lenders, locking in an agreement at a low point in the market has considerable disadvantages. Any upside from market recovery is eliminated for the tolling agreement period which, for investors, means they are forced to settle for a certain but potentially low return. Remaining merchant allows the Company to retain any potential upsides across a portfolio that is already derisked by its geographical spread across five uncorrelated markets. More importantly, we have the control over each asset to optimise the Company’s revenue strategy to ensure these upsides are accessible while ensuring they maintain best-in- class operational performance. Tolls often come with increased cycle rates, which can degrade the battery, while putting in place stringent availability requirements and penalties if they dip below that level. As an active manager with an in-house commercial and asset management team working in unison to maintain availability while engaging in a wide range of optimal revenue streams, we would not rush to give up that control. Q: Why did the Company increase its capacity in Ireland? The strategic decision to increase capacity in the Republic of Ireland was driven by the consistently lucrative nature of this market for the Company since its initial international expansion in 2019. The Irish market has exhibited strong fundamentals and continues to represent an attractive investment opportunity aligning with our objectives. Through these transactions, the Company acquired the remaining 49% stake in two existing operational Irish assets – the combined 90 MW Porterstown project and 120 MW Kilmannock construction asset – through the issuance of new ordinary shares to our strategic partner Low Carbon. This long- term relationship, which was established when the Company first diversified into the Irish market, also allowed us to exercise the option to secure a 51% interest in Project Mucklagh, a 75 MW pre-construction asset with targeted energisation in 2028, for a development fee agreed back in 2019. This was an attractive cash consideration on a £/MW basis compared to the prices we see now following rapid development of the Irish market, making the legal option agreed by the Company five years ago extremely cost efficient for today. These acquisitions represent innovative and efficient capital deployment solidifying the Company’s commitment to portfolio diversification across geographic markets while strengthening a strategic partnership by bringing Low Carbon onto the Company’s share register. This will ensure all parties are fully aligned during buildout of the assets to ensure they are delivered at pace to join the Irish market, which will remain critical within the Company’s diversified portfolio. The Company’s ability to expand its network of long-term partners enhances its access to a pipeline of development opportunities across target geographies. As evidenced by the Company’s continued execution in Ireland, active management of the portfolio through strategic acquisitions and partnerships will remain a key driver of long-term growth and shareholder value generation. Q: How did the Company overcome the difficulties faced in securing capital during a difficult time for raising new funds? The rapid increase in interest rates since late 2022 has significantly impacted the investment trust sector, particularly renewable energy investment trusts. These trusts have historically often traded at a premium to their NAV, reflecting investor demand and confidence in the sector’s growth prospects, however, as interest rates have surged, the yield offered by these trusts became less attractive over the period relative to the risk-free rates available on government bonds. This has led to a sell-off in the sector, depressing share prices and causing trusts to trade at discounts to their NAV levels. The discount levels have become quite pronounced for even some of the largest renewable energy investment trusts. This creates challenges from a capital raising standpoint as trusts are prohibited from issuing new shares below NAV, restricting their ability to fund new projects and acquisitions. The challenge for the Company has been to continue to pursue a growth strategy in this environment but the Investment Manager has been able to adopt alternative complex structures in which contracts can be negotiated with strategic partners to include payment, at least in part, through share issuance at NAV. During the reporting period, this allowed us to raise gross proceeds of £15.8 million from our long-term strategic partner Nidec and grow the Company’s portfolio in the lucrative Irish market by c. 24% with a minimal cash consideration through well-structured negotiations with Low Carbon. This approach reduces the immediate cash burden on the Company while aligning our objectives with partners who have demonstrated confidence in our strategy and ability to deliver strong returns over the long term. These achievements underscore the Company’s ability to navigate the headwinds of the current high interest rate environment and maintain a growth trajectory through innovative problem-solving and strong industry relationships. 23 Annual Report for year ended 31 March 2024 Strategic Report While discounts persist, capital raising and funding new projects will remain a key challenge for renewable energy infrastructure investment trusts to navigate, however, we have demonstrated our ability to overcome this challenge and continue to deliver growth and value to shareholders. Q: Has the Company’s use of leverage evolved in the period as project-level finance or alternative financing structures are employed? While still a young asset class, utility-scale energy storage has evolved rapidly in the six years since the Company first listed on the London Stock Exchange. Unlike conventional renewables, which offer long-term contracted revenues to provide certainty to lenders, energy storage remains largely based on a merchant revenue stack, reflecting the uniquely complex and varying capabilities of the technology. This has historically been met with reduced appetite from lenders to provide leverage to investments on attractive terms. As the market has matured and the Company’s track record of success has become well-established, lenders are more comfortable than ever with our approach. We remain committed to ensuring resilience on the balance sheet by retaining the Aggregate Group Debt below 30% of GAV and had reached just 6.5% of GAV at the end of the financial year. We expect this to rise to c.15% after drawing down on available debt lines to support the buildout of the Company’s near-term portfolio while maintaining a low level of gearing but retaining headroom to increase borrowing should it be necessary. We have shown this period that the Company is able to capitalise on its track record to secure additional debt from key partners like Santander and First Citizens Bank at the portfolio and project level. During the period we successfully increased the Company’s revolving credit facility from £15 million to £50 million to support the construction of its projects in construction. The Company also secured $60m in debt finance at the asset level for the first time to support the 200 MW Big Rock project. The loan from First Citizens Bank reflects the value this project offers to the portfolio through the addition of long-term contracted revenues for up to c.40% of the revenue stack over the project’s lifetime. Once fully drawn, the $60million facility amounts to a conservative level of gearing equal to 25-30% of the gross asset value of the project. These agreements demonstrate the Company’s ability to raise capital, both equity and debt, in the current climate as part of a strategy to demonstrate and implement appropriate and balanced liquidity management. They also show lenders have become increasingly comfortable with the Company’s approach, delivered by the Investment Manager. Q: How have capex prices changed over the reporting period and what opportunities arise from these changes? Our strategy has always been to build assets to the requirements of revenue streams available in the market at the time of operation. We are unique in operating assets across four different markets all with different system durations, but with a strategic view on future capacity additions should capex costs align with revenue opportunities. Many operators in GB, for example, have committed themselves to deployment of two-hour systems at a considerable cost on the assumption that trading opportunities would emerge as the dominant revenue stream to warrant such investment. We have instead deployed capital efficiently to focus on shorter-duration systems, primarily to deliver frequency response and ancillary services but designed with the ability to augment their duration. This approach has allowed us to maintain disciplined control over capital costs and retain the potential to take advantage of changes in capex prices when they prove most advantageous for the Company and its shareholders. We have seen capex costs fall dramatically in the last two years driven by economies of scale and technology advancements in manufacturing, alongside a change in demand from the electric vehicle market. Today we are able to purchase equipment at a considerable discount compared to the costs incurred by two-hour projects built in recent years, which remain unrepresentative of the value available on the market. We will continue to review options to augment our systems with additional duration in this context of lower capex prices, but will maintain our prudent approach to capital allocation in response to available revenue opportunities. We will, of course, remain vigilant about potential headwinds, such as supply chain disruptions, geopolitical tensions, and fluctuations in raw material prices as we continue to build out our portfolio. We are, however, well-positioned to navigate the dynamic energy storage landscape and deliver sustainable returns for our stakeholders. Q: What is your key focus for the next financial year? As we look ahead to the next reporting period and beyond, we remain committed to driving sustainable growth and maximising returns for our investors. This begins with prioritising the build out of 332 MW of new capacity over the next seven months. This includes our landmark 200 MW Big Rock project, which will fully establish our presence in the CAISO market in California. Bringing these assets online will be crucial for expanding our operational footprint and revenue generation capabilities, improving dividend cover and creating further value for shareholders as projects are derisked as they move to operational stage. The prioritised portfolio represents the optimal allocation of capital across the five markets in which the Company has assets, and we will continue to monitor how best to utilise the Company’s existing resources. This will include evaluating opportunities to recycle capital into the most attractive jurisdictions through potential asset sales and redeployment of proceeds into higher-returning geographies and revenue opportunities. Our focus remains on maximising profitability and maintaining our leading position in revenue per MW and per MWh. Raising capital through other means will also be a priority. We have shown over the reporting period this is possible through alternative structures and are keen to continue leveraging the Company’s track record and the Investment Manager’s extensive network to secure new finance. The fundamental drivers supporting energy storage remain robust, driven by climate policies and energy security needs worldwide. We are well-positioned to capitalise on these conditions and deliver sustainable growth to investors. Strategic Report 24 Gore Street Energy Storage Fund plc Strategic Report Annual Report for year ended 31 March 2024 25 NAV Overview and Drivers Figure 8: Net Asset Value movement between March 2023 and March 2024. 556 27 (36) (35) (7) (13) 49 541 PLC NAV Bridge (in £ millions) 400 420 440 460 480 500 520 540 560 580 600 TotalDecreaseIncrease NAV March 2023 Offering proceeds Dividends Revenue Curves Inflation Discount rate Net Portfolio Return NAV March 2024 Table 10: NAV Bridge £m Pence per share NAV March 2023 556 115.6 Offering Proceeds 27 0.0 Dividends (36) (7.4) Revenue Curves (35) (7.0) Inflation (7) (1.5) Discount Rates (13) (2.8) Net Portfolio Returns 49 10.1 NAV March 2024 541 107.0 Table 11: Reconciliation of Reported NAV 2024 2023 Operational Portfolio 201,662,000 166,252,000 Construction Portfolio 290,887,000 269,037,000 Fair Value of Portfolio 492,549,000 435,288,000 Group Cash 65,168,000 136,809, 000 Other Net Assets/(Liabilities) (17,021,000) (15,832,000) NAV 540,697,000 556,265,000 Aggregate Group Debt 37,345,000 – GAV 578,042,000 556,265,000 The Company’s independent valuer, BDO, conducted an independent valuation as of 31 March 2024, which included a review of key assumptions. The findings from BDO’s valuation aligned with the Company’s year-end valuations and the key assumptions adopted which were used to determine the final NAV. Successful active management during the period resulted in strong cash generation which along with a significant increase in energised capacity resulted in a 10.1 pence per share increase in NAV. Key macro assumptions, including inflation, revenue curves and discount rates reflecting the prevailing environment in which the Company operated, led to a decrease of 11.3 pence per share during the period. The Company also paid dividends, resulting in a 7.4 pence per share reduction in NAV. Below, the Investment Manager provides an overview of each of the key NAV drivers during the period: 1. Offering Proceeds The Company issued 23,700,000 new Ordinary Shares to strategic partners Nidec and Low Carbon. The shares were issued at the prevailing Net Asset Value on the date of issuance. In December 2023, 14,000,000 shares were issued to Nidec, followed by an additional issuance of 9,700,000 shares to Low Carbon in January, both at the prevailing NAV. Strategic Report 26 Gore Street Energy Storage Fund plc 2. Dividends (-7.4 pence): The Company met its dividend target during the reported period, equal to 7.5p per share. Due to the issuance of additional shares partway through the reporting period, the per-share dividend included in the above NAV bridge, amounted to 7.4p. 3. Revenue Curves (-7.0 pence): The Company maintained its approach to revenue curves, taking the mid-case scenario from third-party research houses for the purpose of asset valuation. Where available, the Investment Manager took a blended average mid-case scenario from multiple research houses to gain a more balanced view of future revenue generation. The Investment Manager considers this method to provide a fair reflection of the underlying value of the portfolio. Throughout the year, key markets, notably Great Britain, experienced a decline in the revenue forecasts driven by recent weakness in revenue being factored in by research houses. Despite improved outlook in some markets, the net effect compared to the previous reporting period was a decrease of 7.0 pence in NAV. Material contracts secured during the period include: one-year T-4 Capacity Market contracts for Port of Tilbury, Lascar, Hulley, Larport and the Ancala assets and one-year T-1 Capacity Market contracts for Port of Tilbury, Stony, Ferrymuir and Enderby in GB; Capacity Market contracts for Porterstown in the Republic of Ireland (October 2023 to September 2024) and the Northern Irish assets (October 2027 to September 2028). In Germany, the forecasts were adjusted to reflect the hybrid revenue strategy (ancillary services & trading) implemented during the period, resulting in a slight increase in the assets valuation. In California, even though merchant ancillary services forecasts have seen a decrease in the period primarily due to changes in CAISO rules causing further state-of- charge management-related costs to batteries, the current market environment for long-term fixed price resource adequacy contracts is favourable and is expected to be accretive to NAV once a contract has been secured. The curves were also updated for the Texan assets, with slight increases and decreases in future assumptions, dependent on the node of each asset - the overall effect for the Texan fleet was net neutral. The revenue curves used in valuing the Company’s assets as of 31 March 2024 are provided below. Figure 9: Blended Curve of Ancillary Services and Trading, by Grid and Portfolio Weighted Average 12 ERCOT NI ROI CAISO Portfolio Weighted Average GERGB £000s/MW/Yr Yearly intervals 5-year intervals 0 25 50 75 100 125 150 175 200 225 Dec-24 Dec-25 Dec-26 Dec-30 Dec-35 Dec-40 Dec-45 Dec-50 4. Inflation (-1.5 pence): As presented below, inflation assumptions applied across grids for 2024 and 2025+ reflect the inflationary macro environment observed globally. These are in line with those presented in the Company Interim Report for the period ended 30 September 2023. Table 12: CPI Assumptions CPI Assumptions GB Ireland US Germany 2024 2.75% 2.75% 2.75% 2.75% 2025+ 2.50% 2.50% 2.50% 2.50% 12 Revenue forecasts are of merchant revenue only, and exclude Capacity Market Contracts in GB and Ireland, and the Resource Adequacy Contract in CAISO. The forecasts are real as of 2022. Strategic Report Annual Report for year ended 31 March 2024 27 5. Discount Rates (-2.8 pence): To combat the persistent inflationary environment, central banks across different geographies raised interest rates, increasing yields for long-term government bonds. To align with the higher return environment, the Investment Manager increased the discount by 25 bps across all assets. The impact of de-risking through construction progress on discount rates for relevant assets are discussed separately below in the Net Portfolio Returns section. The Company’s discount rate matrix is provided below: Table 13: Discount Rate Matrix Discount Rate Matrix 13 Pre-construction phase Construction phase Energised phase Contracted Income 10.75-11.00% 9.75-10.50% 7.25-9.25% Uncontracted Income 10.75-11.00% 9.75-10.50% 8.75-9.25% MW 494.8 332.0 421.4 6. Net Portfolio Returns (+10.1 pence): Net Portfolio returns refers to cash generation, COD delays, opex savings, site upgrades, de-risking of sites and DCF changes and rollover: • Cash Generation (6.3 pence): Cash generation was the primary driver within portfolio returns. • COD delays (-2.1 pence): Delays in assets meeting their COD dates resulted in a reduction in NAV by 2.1 pence. This was driven by slower than expected energisation timelines given grid bottlenecks across the global fleet. Detailed dates for the energisation of assets can be found in the Project Progress Overview section above. • Operating Expenses (1.8 pence): The Company amended the operating expense assumptions to reflect modified O&M, asset management, and insurance costs. Through the work done by the Investment Manager’s in-house team, the premiums for RTM costs associated with the Texan, Stony and Cenin assets were reduced, further boosting the business case for storage assets. • Site Upgrades (2.1 pence): The Investment Manager expects to retrofit select GB assets, which include Stony, Ferrymuir, and Enderby, with one hour of additional duration, resulting in all three sites becoming 2-hour duration assets. The Investment Manager intends to align the retrofitting timeline to take advantage of decreasing lithium-ion prices and an expected shift in the GB market, which is expected to favour a more trading-centric strategy. The upgrades are designed to capture additional revenues from the balancing market and energy arbitrage, supporting future augmentation. The Investment Manager expects to retrofit assets over the next three years. The Investment Manager will continue to monitor multiple variables and remains dynamic in its approach to ensure best value. • De-risking of Construction Assets (2.8 pence): The assets that have seen discount rate premium reductions include Big Rock, Dogfish in the US, Stony, Enderby, and Ferrymuir in GB, which align with construction progress. – The US assets executed BOP and EPC contracts during the period and are now progressing in their construction works. – As reported throughout the period, Stony and Ferrymuir both achieved energisation. The Investment Manager also secured all major equipment, including batteries and inverters for the Enderby project, which were delivered to site and are currently being installed. Due to the portfolio wide discount rate hikes of 0.25% outlined above, the weighted average discount rate of the Company’s portfolio as of March-end 2024 increased slightly to 10.2% (FY23: 10.1%) despite the natural unwinding of the discount rate as a material amount of assets progressed through stages of construction. • Fund, Offering and Subsidiary Holding Companies Operating Expenses (-1.9 pence) • Other DCF adjustments and rollover (1.1 pence): This includes items such as updated battery cell costs for repowering capex, DCF valuation of assets previously at book value and rollover which aggregated resulted in a relatively minor negative impact on NAV. • A fair value breakdown of the Company’s assets is provided by grid and asset stage below: Table 14: Fair Value (FV) breakdown by Grid and Asset Stage FV Breakdown by Grid (in £m) 14 Construction and pre-construction Energised Great Britain 73.5 124.0 Ireland 16.2 79.6 15 Germany n/a 14.3 Texas 38.1 15.2 California 128.6 n/a 13 Porterstown uses blended discount rates across energised (Phase I) and pre-construction (Phase II) phases. MW capacity numbers for pre-construction phase includes assets held at book value. 14 Excludes pre-construction assets at book value. 15 Includes expansion project along with phase 1, which were previously valued separately. Strategic Report 28 Gore Street Energy Storage Fund plc Capital Allocation: The Company regularly reviews its capital allocation policy and considers a range of options to optimise long-term sustainable returns to shareholders. As previously disclosed, the Company remains focused on constructing its near-term portfolio. Throughout the year, the Company is expected to deploy the majority of its available cash and draw down on its available lines of credit, both the project and fund-level facilities. By the end of the next fiscal year, the Company is expected to run a conservative net debt position of c.15% of Gross Asset Value 16 (equivalent to around £99 million once fully drawn to support the completion of the near-term portfolio buildout). The Investment Manager remains cognisant of the high-interest rate environment. The Investment Manager has been and will continue to be prudent in its use of leverage and managing associated refinancing risks - the Company has comfortable headroom under loan- to-value and debt service coverage covenants. The Investment Manager also notes the Company’s contractual obligations and will not enter into contracts, on its behalf, without the necessary capital to fulfil them. Additionally, the Investment Manager continues to explore capital recycling options and will keep the market informed of relevant progress. Dividends The Company reviews the dividend policy annually to ensure its continued suitability. Following this year’s review, the Board has decided to adjust the Company’s dividend policy to better align it with the construction schedule of the portfolio. The Company will target a 7.0p dividend for the 2024/25 financial year, consistent with investors’ expectations based on the current NAV. Any payment exceeding this amount will be tied to cash generation from the underlying portfolio. The target dividend payments will also be weighted to the fourth quarter (one pence paid per quarter for the first three quarters and a four pence dividend for the final quarter), as the Investment Manager anticipates that the ITC payment will be received. This policy adjustment reflects the maturing nature of the Company and sets it well to continue to provide long-term value for shareholders. Investment Tax Credits Under the Inflation Reduction Act (IRA) implemented on 16 August 2022, standalone utility-energy storage projects are eligible to access Investment Tax Credits (ITC). The IRA enables taxpayers to reclaim a percentage of the cost of renewable energy systems through ‘transferring’ the tax benefits (ITC) to eligible third parties with current taxable profits to monetise them closer to when they are earned at the placed-in-service date. The Company’s ERCOT (Dogfish) and CAISO (Big Rock) construction assets qualify to monetise these tax credits received under the IRA through transferring them. The Big Rock asset qualifies to receive an ITC of 30% of eligible capex, while the Dogfish asset is expected to benefit from a 30% tax credit along with an additional 10% adder, resulting in a total expected ITC benefit of 40% for the Dogfish asset. With a combined capacity of 275 MW/475 MWh, the financial benefit under the IRA is accretive to the Company in the form of tax-exempt income upon transfer. The Projects will be eligible for the ITC upon placed in service date (when the project begins regular operation), following which the Investment Manager will proceed to monetise the tax credit through its sale to a tax-paying entity, a process that is already in progress. The Investment Manager anticipates a total ITC benefit in the range of $60 million to $80 million. 16 Based on March-end 2024 NAV. Strategic Report Annual Report for year ended 31 March 2024 29 Key sensitivities The following sensitivities have been applied to the valuations to measure the impact of major macroeconomic factors, with the most material factors being inflation and discount rates. a. Inflation rate: +/- 1.0% b. FX volatility: +/- 3.0% c. Discount rate: +/- 1.0% d. EPC costs +/- 10.0% Figure 10: NAV sensitivities 0 Increase in assumptionReduction in assumption (15) (10) (5) 5 10 15 (3.2) 3.1 EPC +/- 10% (11.3) 13.1 Discount Rates +/- 1% (1.6) 1.7 FX +/- 3% 13.0(11.6) Inflation +/- 1% Change in NAV in pence NAV Scenarios Various scenarios have been considered to assess the impact on portfolio valuations. a. Revenue Scenarios: NAV based on third-party high & low cases reflecting the impact of different possibilities relating to renewables buildout, increase in energy demand and other factors such as regulations. The application of high case revenues result in a £112m increase while the low case revenues result in a decrease of £121m in NAV. b. Valuation of construction portfolio using operational discount rates reflects the upside available to the NAV from the progression of non-operational assets moving forward to their respective CODs. This results in a £76m increase in NAV. Figure 11: NAV scenarios Increase in assumptionReduction in assumption Change in NAV in pence Construction Portfolio Valuation Using Operational Discount Rate 15.0 High and Low Revenue Scenarios 22.1(24.1) (25) (20) (15) (10) (5) 0 5 10 15 20 25 Strategic Report 30 Gore Street Energy Storage Fund plc I’m proud to report the Company continued to achieve growth while demonstrating leadership and resilience during an extremely turbulent period. The international portfolio continued to deliver consistent average revenue of £15.1 per MW/hr through best-in-class operational performance and capital management. The Company achieved an operational dividend cover of 0.78x for the year from an average operational fleet of 311 MW. With energised capacity reaching 421.4 MW and 332 MW more to follow in the coming seven months, all while maintaining a prudent approach to leverage, the Company is well- positioned to increase dividend cover and continue delivering value for shareholders by generating robust and stable cash flow from its well- diversified fleet of assets. Market conditions in Great Britain have demonstrated why the strategy of diversification is vital to success in our sector. Continued buildout of energy storage capacity in GB has led to saturation in the ancillary service market while limited wholesale volatility has meant alternative revenues are not available to fill the gap. The Company’s resilience within this context through its diversified portfolio has showcased this reporting period as one of the most illustrative in the Company’s history. The value in GSF’s international reach continues to set it apart from competitors. The consolidated portfolio generated average revenue of £15.1 per MW/ hr consistently across the period, demonstrating the stable revenue profile of an operational portfolio spread across four uncorrelated markets. This has allowed the Company’s overall revenues to outpace peers by c.3x as its international portfolio overcomes the constraints of singular exposure to the GB market, which offers similar revenue generation across all asset owners. This consistent outperformance is a testament to the Company’s prudent approach to capital allocation across multiple jurisdictions and operational excellence over our six-year history. The expertise built up in-house at the Investment Manager over this period has been a key contributor to this success and will only grow further as we develop new capabilities to further monetise the Company’s assets. Investment decisions made back in 2019 to enter the Irish market and in 2022 to take on operational assets in Texas have paid off over this period. Early pre-qualification of the Company’s assets to deliver ERCOT’s ECRS service over the summer resulted in approximately £150/MW/hr in August, marking the highest monthly revenue per MW ever achieved by the Company in a single grid. This was followed by record-high revenue from the Company’s Northern Irish assets during FY Q3. As each season passed, revenue opportunities across the portfolio shifted and balanced into the consistent revenue profile we were able to achieve in this reporting period, underscoring the advantages of activity across diverse, uncorrelated grids within an energy storage portfolio. I am pleased to report that this portfolio continues to grow around the world as we pursue our diversified strategy. Over the period the Company’s energised capacity grew to 421.4 MW with the addition of its biggest project to date – the 79.9 MW Stony asset, which became commercially operational in FY 2024 – and subsequently the 49.9 MW Ferrymuir project, which overcame delays caused by resourcing issues at the network operator and the insolvency of a main sub-contractor. Progressing these projects was a key focus over the reporting period to move the Company’s construction assets towards revenue generation. Together they represent a significant boost in energised capacity achieved by year-end, marking a considerable increase in the scale of built assets in the Company’s portfolio. The Company was also able to add new capacity and projects to the wider portfolio and take overall capacity to 1.248 GW (FY23: 1.17 GW) while securing new finance through innovative agreements with strategic partners. With capital markets largely closed to the infrastructure investment trust community over the period, I am proud of the Investment Manager’s ability to raise funds on behalf of the Company from its strategic partners to continue its growth and delivery of sustainable returns for investors. The acquisition of the remaining 49% in two of the Company’s existing Irish projects through share issuance was completed alongside the addition of the 75 MW Mucklagh project, which was achieved thanks to a legal option to purchase agreed in 2019 at a lower cash consideration than would have been agreed today. These transactions demonstrate our ability to execute new deals successfully and drive returns for shareholders through a diversified asset base. We have also strengthened relationships with long-term partners and secured project-level finance for the first time for our 200 MW California project, Big Rock. These new achievements ensure the Company continues to deliver on its strategy of achieving a varied and market- leading stream of income, built on the best value per MWh installed with high system availability and resilience, and leading optimisation of revenue opportunities, around the world. The ongoing deployment of renewables globally continues to be a fundamental driver of the business case for energy storage, and policy in key markets is rapidly catching up to that fact. The recommendations made by the European Commission in March 2023, which placed energy storage at the heart of a clean and stable future European grid system, are to be adopted following a vote by the European Parliament in April. These measures are paving the way for Member States to shift their flexibility focus towards energy storage and other non-fossil sources as more renewables are deployed, and will build on the improving market conditions of individual countries. Germany, for example, has announced plans for a market-based, technology-neutral capacity mechanism to be established in 2028, which could offer similar long-term, contracted revenue to energy storage as seen in various other markets. We will continue to monitor these emerging opportunities across various countries to determine how best to allocate capital in the future. While different measures are being introduced at a Union-wide and Member State level, we are hopeful this legislative push to clean flexibility will create as positive an environment for energy storage as in the US under the Inflation Reduction Act. Over $270bn 17 of new investment in clean energy projects and manufacturing was announced within the first year of the legislation being passed and 33.8 18 GW of new US utility-scale solar, wind and energy storage capacity was added over 2023. With 44 GW 19 of new utility-scale solar and wind capacity expected across the USA in 2024, much of it to be deployed in Texas and California, the Company is primed to deliver crucial grid services and capitalise on any new opportunities– as we did over the reporting period – to ensure the ERCOT and CAISO grids are able to integrate this new clean power. Our focus will, therefore, remain on building out the Company’s construction portfolio while maintaining capital discipline to reduce exposure to GB and maximise returns from the international portfolio. Message from Alex O’ Cinneide Dr Alex O’Cinneide CEO of Gore Street Capital, the Investment Manager Strategic Report 17 Source: American Clean Power 18 Source: American Clean Power 19 Source: US Energy Information Administration 30 Gore Street Energy Storage Fund plc Strategic Report Annual Report for year ended 31 March 2024 31 We continue to invest in Gore Street Capital’s in-house resources to fulfil the needs of the Company across construction, asset management, and commercialisation services, as well as supporting activities in administration, ESG, legal and investment. This will ensure we continue to play a material role in the success of the Company and position it to deliver long-term value toshareholders. Delivery against Strategy Despite what has undoubtedly been a challenging period for the entire sector, the Investment Manager is pleased to report significant progress towards achieving the Company’s objectives and delivering long-term sustainable growth. Key achievements over the past year include: Financial Performance: The Company demonstrated a steady revenue profile during the period, one of the key benefits of the Company’s unique allocation strategy, especially as a dividend-paying stock that has continued to meet its dividend targets. The Company achieved an Operational EBITDA of £28.4m, which translates into an operational dividend cover of 0.78x for the year. This positive trend reflects the Company’s focus on delivering long-term sustainable growth while maintaining strong financial performance. Strategic Expansion: The Company was able to increase its presence in the Irish market, one which has been amongst the most consistently profitable markets for BESS. The Investment Manager utilised sophisticated transaction structures for its Irish acquisitions during the year which included a 51% stake of Project Mucklagh, as well as the remaining 49% stake in projects Kilmannock and Porterstown. The transaction structures included joint ventures, acquiring a majority stake in an asset as opposed to 100% through exercising an option put in place back in 2019, enabling transactions at extremely attractive price points, as well as the majority of the combined consideration being settled via issuance of shares in the Company. Capital Raising: The Company was pleased to be amongst a very small group of trusts that successfully issued shares during the period. Both issuances were made at the prevailing NAV to strategic investors: Nidec and Low Carbon. Financial Management: The Company secured an initial $60m loan financing from First Citizens Bank at a competitive cost and secured at the asset level. This capital structure is part of the manager’s overall liquidity management. The Company has maintained a strong balance sheet and made appropriate use of debt. The Company also upsized its RCF facility with Santander from £15m to £50m. Strong revenue profile: The advantages of the Company’s diversification strategy were made clear during the year through the portfolio’s strong and consistent revenue profile. The Company generated an industry-leading average revenue of £15.1 per MW/hr during the year (£133,000 MW/yr), far in excess of listed peers on both an average and consolidated basis. Operational Success: Despite the volatility in the market, the Company continued to deliver operationally. Strong technical management resulted in a high level of asset availability, achieving a weighted average of over 93% throughout the year, including scheduled downtime. Multiple construction milestones were also achieved, increasing the Company’s energised capacity to 421.4 MW by the end of the period. ESG: The Company remains committed to sustainability and responsible business practices. The Company publishes an annual ESG & Sustainability Report, which provides an overview of the ESG strategy, key initiatives, and the portfolio’s environmental and social performance during the year. The FY 2023/24 Report will be published and available on the Company’s website in early September 2024. Outlook While the energy storage market remains in a nascent stage across various markets, its crucial role in supporting stable grid operations in a rapidly decarbonising world is being more widely recognised as deployment experiences rapid growth globally. The US Inflation Reduction Act continues to propel deployment of new renewable generation assets, while the European Parliament has voted to adopt a series of measures designed to promote low carbon flexibility from energy storage. This will build on the efforts of individual Member States like Germany, where the Company already has an asset that stands to benefit from measures proposed by the country’s first electricity storage strategy and an announced Capacity Market, expected to launch in 2028. As an early mover in several geographies, the Company is established in leading energy storage markets and, therefore, remains well-positioned to capitalise on wider adoption of the technology to maximise shareholder value. While the start of a new Parliament in the UK may provide uncertainty, as with every fresh election outcome, the increased climate ambition of the new government provides a welcome boost for renewable infrastructure trusts. We hope to see the investment environment improve as the government pushes towards its accelerated clean power ambitions for 2030, which will provide greater opportunities for energy storage to deliver crucial services to the grid. The Company’s primary focus over the next seven months remains fixed on the buildout of new capacity at the best value per MW/MWh fully installed across the remaining near-term portfolio of 332 MW currently under construction. This includes the 200 MW Big Rock asset which, when completed, will play a material role in supporting the CAISO grid—the Company’s fifth market to date—to integrate rising levels of renewable generation. The Investment Manager aims to maximise profitability by ensuring that capital allocation is done optimally, whether by geography or by duration/capex. The Company is well-positioned to remain a market leader in terms of revenue generation on both a MW and MWh basis, given its unique exposure across multiple uncorrelated revenue streams in different markets. The Company’s diversification, which is set to increase, is expected to provide long-term value as exposure to GB decreases as a percentage of operational MWh throughout the remainder of 2024. In addition, the Investment Manager intends to make portfolio construction decisions that create value by raising and deploying capital efficiently. Both construction assets in the US, for example, offer a potential combined benefit of $60 million to $80 million to the Company through the sale of ITCs for which they are eligible, and we are exploring opportunities to deliver this value to shareholders. We are also considering the sale of assets to recycle capital and redeploy into other geographies that offer more attractive returns. The Company is uniquely positioned to execute this activity as the only player with a presence across five markets. The fundamental drivers of energy storage remain strong, driven by climate action and energy security policies and legislation worldwide. The difference in strategies employed by asset owners has led to materially different outcomes, marking a turning point for the industry. In the GB market, participants are largely price takers, generating similar revenue across asset owners. However, 2023 has shown that capital allocation strategies, whether geographical or based on duration, have significantly impacted financial outcomes. This trend is likely to continue throughout 2024 and beyond and the Company is set to take advantage, with a solid diversification strategy and a unique exposure across multiple revenue streams in uncorrelated markets. With support from the Investment Manager’s team, located in GB, Ireland and the US, the Company will continue to play an important role in the decarbonisation of energy systems globally. Strategic Report Annual Report for year ended 31 March 2024 31 Strategic Report 32 Gore Street Energy Storage Fund plc Key Performance Indicators (“KPIs”) The Board monitors the performance of the Investment Manager using the following KPIs. The figures for the year are included in the Key Metrics on page 1. Valuation. The value of the Company’s portfolio is measured using NAV and NAV total return. Operational and Total Capacity. The capacity of the operational portfolio is used to measure how the Company’s funds are being invested, and how quickly assets become operational and capable of generating cash. Total capacity is a measure of the portfolio’s potential. Portfolio financial performance. The revenue and EBITDA generated by portfolio companies are used to track financial performance. Dividend yield. This KPI is linked to the yield target of 7p per Ordinary Share per annum. The Board also keeps the following topics under regular review. Portfolio diversification. One of the benefits of the Company is the ability for investors to invest in ESS across multiple grids. This also helps spread risk. Revenue diversification. To reduce risk, the Company’s operational assets generate revenue from a variety of sources including fixed, contractual income and fluctuating income. Debt. Using debt to enhance shareholder returns is a key benefit of investment trusts. It can also be used to fund acquisitions when equity markets are unavailable. Ongoing Charges Ratio. This is a way to measure the cost of running the Company. Strategic Report The Strategic Report sets out the Company’s strategy for delivering the investment objective (on the inside front cover), the business model, the risks involved and how the Board manages and mitigates those risks. It also details the Company’s purpose, values and culture, and how it interacts with stakeholders. It incorporates the Key Metrics, the Chair’s Statement and the Investment Manager’s Report, which all together provide a balanced and comprehensive analysis of the Company’s business during theyear. Business model The Company’s business model is focussed on delivering the Company’s investment objective, in line with the investment policy. The Board is responsible for: (a) appointing the Investment Manager and other service providers; (b) reviewing strategy; (c) oversight of the Investment Manager and service providers; (d) risk management; and (e) ensuring the Company remains attractive for shareholders. Details of its oversight is included below. The Board has appointed the Investment Manager, Gore Street Capital Limited, to implement the investment policy. The Investment Manager works with the Commercial Manager, Gore Street Services Limited (formerly Gore Street Operational Management Limited), to invest and manage the Company’s assets in line with the investment restrictions and deliver investor value as per the investment objective while spreading investment risk. Further information on the Investment Manager and other service providers is included in the Directors’ Report. Strategic Report Annual Report for year ended 31 March 2024 33 Investment Model The model used by the Investment Manager and Commercial Manager (together the “Manager” except where stated otherwise) to deliver investor value in line with the investment policy is set out below. Performance Optimisation, Responsible management, and monitoring The Manager dictates the parameters for revenue stacking and optimisation for the portfolio. It forms its bidding strategies by taking into consideration energy market dynamics, regulatory limitations, and existing contract commitments and then works with optimisation and trading professionals to maximise revenue streams. The Manager also monitors asset performance to ensure asset availability for revenue contracts. The Manager is responsible for managing relationships with stakeholders, monitoring technical performance and maximising asset availability. The team is also responsible for monitoring and integrating the Company’s health, safety, environmental, social and investment objectives into the Company’s operations model. Procurement and Construction The Manager has an in-house procurement team, with the legal and technical expertise to negotiate all key contracts, for project engineering and construction and obtaining warranties for continued battery performance. The construction and development team are responsible for monitoring project construction and holding relevant stakeholders accountable for cost and quality control, and timeline management. The team is also responsible for monitoring and integrating the Company’s health, safety, environmental, social and investment objectives into the Company’sconstructionmodel. Acquisition execution and onboarding of new assets/projects The Manager’s team is comprised of professionals with experience in finance, legal, asset construction, engineering, and operations. The Manager manages the acquisition process from bid to close. It relies on third parties to assist with due diligence and remove biases in assessing opportunities. It aims to design transactions in a manner that allocates project risks in accordance with the Company’s investment policy. The Manager is also responsible for monitoring and integrating the Company’s health, safety, environmental, social and investment objectives into the Company’s acquisition model. Asset identification and assessment The Manager has assessed hundreds of projects since the Company’s IPO to select opportunities that meet the Company’s investment policy. As part of its assessment of investment opportunities, the Manager routinely runs market analyses on each grid network within its geographical mandate. The Manager’s team also works with local advisors to evaluate the regulatory environment applicable to each grid operator. The Company has established a strong network of project developers with a deep understanding of early-stage project development to ensure that projects identified for investments meet or will meet land, planning and grid energisation requirements by the time of acquisition. The Manager has designed the Company’s portfolio to be geographically diverse with flexibility in mind so the Company can acclimate to regulatory and technologicalchanges. 1 2 3 4 Acquisition execution and onboarding Procurement and Construction Performance Optimisation, Responsible management, and monitoring Asset identification and assessment Strategic Report 34 Gore Street Energy Storage Fund plc The Investment Process The Manager is responsible for deal origination, execution, and asset management of the portfolio in accordance with the Company’s investment objectives and policy. The Board has delegated authority to the AIFM to acquire or dispose of assets without seeking further approval from the Board provided that the Board is given the opportunity to consider each acquisition or disposal before it is concluded. Once a potential project which falls within the Company’s investment policy has been identified, and the Manager wishes to proceed, its Investment Committee (detailed below) reviews the project. Investment Committee approval is required to confirm that financial, legal, and technical diligence suggests that the proposed transaction is consistent with the Company’s investment policy. Investment manager’s capability MARKET LEADERSHIP The Manager was one of the first movers to deploy privately owned grid-scale battery projects in GB. It was also one of the first to successfully enter and deliver services in the energy storage market in Ireland, where the Company continues to hold a substantial market share. The Company has also entered energy markets in Germany, Texas and California. The Manager is comprised of industry experts and financial professionals. They use their collective expertise and work collaboratively alongside industry leaders on system design, procurement, and asset construction. The investment management and commercial management teams have a collective 159 years of experience working in the sector. Mr Mudd is a private equity and venture capitalist. Previously, he was the CEO of Fortress Investment Group, a global asset management firm with over US$50 billion invested in private equity, credit, and hedge funds. Under his leadership, Fortress expanded its base to Asia and the Middle East, acquired new business, eliminated corporate debt while restoring shareholder dividends. Prior to Fortress, MrMudd was the President and Chief Executive Officer of Fannie Mae, the USA’s largest mortgage investor. Dan Mudd Mr Wouters is a Director of the Investment Manager. He is Chairman of the MENA Hydrogen Alliance and heads the EU MED-GEM Network from Abu Dhabi. Mr Wouters was recently the Deputy Director General of the International Renewable Energy Agency (“IRENA”), an intergovernmental organisation supporting governments in their transition to a sustainable energy future. Prior to IRENA, Mr Wouters was the Director of the Clean Energy Unit at Masdar – a subsidiary of Mubadala, one of Abu Dhabi’s sovereign wealth funds – where he led the development and construction of renewable energy projects worth more than $8bn. These included a solar plant in Abu Dhabi, three in Spain, and the London Array, the largest offshore wind park in the world when it was commissioned in 2013. He received his MSc in Mechanical Engineering from Delft University of Technology. Frank Wouters Mr Arima, Chief Investment Officer and Chief Financial Officer at Gore Street Capital, previously managed private equity investments for over $1bn of assets under management at the publicly listed private equity business RHJ International, which was spun out of Ripplewood Holdings. Mr Arima first joined Ripplewood in 2002 and has since gained over 20 years’ experience across private equity in Japan and London, including delivery of various large investments and divestments in the telecom, automotive, hospitality and media industries. He also worked in debt capital markets and derivatives at JP Morgan and, prior to that, at McKinsey & Company. Mr Arima has served as a board member of various public and private companies and holds a MFin from Princeton University and a BA in Economics from the University of Tokyo. Sumi Arima Dr O’Cinneide is CEO and Chair of the Investment Committee of Gore Street Capital, which he founded in 2015 as a platform to facilitate the deployment of renewable energy solutions. DrO’Cinneide’s career has included senior roles at KPMG, Quorum European Partners, Kleinwort Benson, Paladin Capital Group and sovereign wealth fund Masdar Capital, where he served as Head of Investments and General Manager for six years. Dr O’Cinneide also holds academic qualifications from Trinity College Dublin, the London Business School and the London School of Economics and Political Science, culminating in a PhD that analysed the effectiveness of renewable energy policy in the Republic of Ireland and the UK. Thisexpertise has allowed Dr O’Cinneide to fulfil key advisory roles for UNICEF, and on the boards of several organisations across the global clean energy sector. He is also a trustee of the London Irish Centre, a charity delivering welfare support and cultural events for the capital’s Irish community. Dr Alex O’Cinneide (Chair) The Investment Committee Strategic Report Annual Report for year ended 31 March 2024 35 Integration of ESG into the investment process Energy storage is a critical piece of the infrastructure used to solve the challenge of intermittency of supply from weather- dependent, variable renewable energy sources, against predictable demand patterns. As a pure-play energy storage fund, the Company takes pride in its contribution to supporting clean energy ambitions for increased integration of renewable energy into global power systems. As a company focused on supporting the shift to low carbon energy generation, the Company also seeks to include environmental, social and governance (“ESG”) considerations in the investment process, as well as on an ongoing basis when managing the assets. This is highlighted in the investment modelabove. The Company reports on this in more detail in its ESG and Sustainability Report 2023 published here: 2023-gore- street-energy-storage-fund-esg-and-sustainability-report. pdf (gsenergystoragefund.com). The report for the year ended 31March 2024 is due to be published in September 2024. Its SFDR Annex IV report is included on page 93. On an ongoing basis, the Company seeks to engage with its stakeholders, as described in the s.172 statement below. Investment policy The Company will invest in a diversified portfolio of utility scale energy storage projects. Individual projects will be held within special purpose vehicles into which the Company will invest through equity and/or debt instruments. Typically, each special purpose vehicle will hold one project but there may be opportunities where a special purpose vehicle owns more than one project. The Company will typically seek legal and operational control through direct or indirect stakes of up to 100per cent. in such special purpose vehicles, but may participate in joint ventures or acquire minority interests where this approach enables the Company to gain exposure to assets within the Company’s investment policy which the Company would not otherwise be able to acquire on a wholly-owned basis. In such circumstances the Company will seek to secure its shareholder rights through the usual protective provisions in shareholders’ agreements and other transactional documents. The Company currently intends to invest primarily in energy storage projects using lithium-ion battery technology as such technology is considered by the Company to offer the best risk/ return profile. However, the Company is ultimately agnostic as to which energy storage technology is used by its projects and will monitor projects with alternative battery technologies such as compressed air technologies, and will consider such investments (including combinations thereof) where they meet the investment policy and objectives of the Company. The Company may invest cash held for working capital purposes and pending investment or distribution in cash or near-cash equivalents, including money market funds. The Company intends to enter into hedging arrangements as appropriate to seek to manage its exposure to foreign currency risks associated with capital expenditure, interest rate riskand risks relating to power prices as well as repayment of intra-Group debts. The Company will not enter into derivative transactions for speculative purposes. The Company intends to invest with a view to holding assets until the end of their useful life. However, assets may be disposed of or otherwise realised where the Investment Manager determines in its discretion, that such realisation is in the interests of the Company. Such circumstances may include (without limitation) disposals for the purposes of realising or preserving value, or of realising cash resources for reinvestment or otherwise. Investment restrictions and spread of risk The Investment Manager must manage the Company in line with the investment policy and the following restrictions. The Company does not have any borrowing restrictions in its Articles but the Directors intend that the Company will maintain a conservative level of borrowings with a maximum level of Aggregate Group Debt of 50 per cent. of Gross Asset Value at the time of drawdown of the relevant borrowings. The Directors wish to clarify that, notwithstanding the above flexibility, the Board’s gearing policy will firmly limit borrowings to no more than 30 per cent. of gross assets at any time. If in the future the Directors views on this policy were to change, they will revert to shareholders for further approval. For these purposes, the “Gross Asset Value” shall mean the Company’s Net Asset Value increased by the amount of the Aggregate Group Debt. The Net Asset Value is the value of all the assets of the Company less its liabilities, determined in accordance with the accounting principles adopted by the Company from time to time. The “Aggregate Group Debt” is the Group’s proportionate share of the outstanding third-party interest bearing borrowings of any Group companies and any non-subsidiary companies in which the Group holds an interest. It is intended that debt will be secured at asset level or SPV level, with parental company guarantees or other collateral security, if any, provided at Company level. Debt arrangements will ultimately depend on the structure adopted by the Company, having consideration to key metrics including lender diversity, debt type and maturity profiles. It is the Company’s intention that no single project will have an acquisition price greater than 20 per cent. of Gross Asset Value (calculated at the time of acquisition). However, to retain flexibility, the Company will be permitted to invest in any single project (or interest in any project) that has an acquisition price of up to a maximum of 25 per cent. of Gross Asset Value (calculated at the time of acquisition). The Company will target a diversified exposure with the aim of holding interests in no fewer than 10 separate projects at any one time once fully invested. Strategic Report 36 Gore Street Energy Storage Fund plc The Company may invest in projects in GB, Ireland, North America, Western Europe, Australia, Japan and South Korea, although it does not intend that the aggregate value of investments outside GB and Ireland will be more than 60 per cent. of Gross Asset Value (calculated at the time of investment). Additionally, given the flexibility of batteries as an energy storage technology, revenue diversification can be achieved through the potential to “stack” a number of different income streams with different counterparties, contract lengths and return profiles through one project, such as frequency regulation services to grid operators, as well as wholesale arbitrage to profit from intra- day wholesale electricity prices. The Company will further aim to achieve diversification within the Company’s portfolio through the use of a range of third-party providers, insofar as appropriate, in respect of each energy storage project such as developers, EPC contractors, O&M contractors, battery manufacturers, asset managers, landlords and sources of revenue. In addition, each MW of a typical energy storage project will contain a battery system which has a number of battery modules in each stack, each of which is independent and can be replaced separately, thereby reducing the impact on the project as a whole of the failure of one or more battery modules. The Company will not invest in any projects under development so that, save in respect of final delivery and installation of the battery systems, all other key components of the projects are in place before investment or simultaneously agreed at the time of investment (such as land consents, grid access rights, planning, and visibility of EPC and revenue contracts). The Company will not invest in other listed closed-ended investment funds. The Company must not conduct any trading activity which is significant in the context of its group as a whole. These investment restrictions were not breached during the year. Spread of risk is achieved using geographic, asset and revenue diversification Assets are diversified across different stages (operation, under construction and pre-construction), and through the ability to participate in different services, with most of the sites expected to generate revenue from more than one contract. Furthermore, the portfolio is spread across five different geographical grids. Revenue diversification is also achieved through the potential to “stack” several different income streams in one battery, allowing the Company to spread risks across different counterparties, contract lengths and maintain varying return profiles. The Company aims to maintain similar diversification across third-party service providers and works with a variety of developers, EPC contractors, O&M contractors, battery manufacturers, asset managers and route-to-market providers. The Company may invest in projects in GB, Ireland, North America, Western Europe, Australia, Japan, and South Korea, although it does not intend that the aggregate value of investments outside GB and Ireland, will be more than 60 per cent. of Gross Asset Value (calculated at the time of investment). The Company holds and operates a diversified portfolio of lithium-ion energy storage assets across five markets, including 421.4 MW of energised assets and 826.8 MW projects at the pre-construction or construction phase. Lithium-ion batteries deliver multiple grid balancing and power quality services to power grids and present power trading opportunities. Consequently, batteries generate multiple revenue streams. It is the Company’s intention that no single project or interest in any project will have an acquisition value of greater than 20 percent. of Gross Asset Value of the Group as a whole (calculated at the time of acquisition). Geographical and revenue contracting risks will be diversified between GB, Ireland, Texas, California, Germany, and potentially other target markets. As at the end of the year the Company held 28 projects, with assets in four countries across five grids, and benefitted from over 20 revenue sources. Currency Exposure Management The Company enters into hedging arrangements as appropriate to manage its exposure to foreign currency, ensure repayment of capital expenditure, protect against interest rate hikes, and efficiently manage operating cash flow to ensure repayment of intra-Group debts. Gearing The Board and the Investment Manager periodically review the Company’s gearing policy to ensure that it is accretive to shareholders and in line with the financing needs of the Group’s expanding portfolio. During the period the Company successfully increased the revolving credit facility held by the Company’s subsidiary, GSES 1 Limited, from £15 million to £50 million to support the construction of its prioritised projects. The Company is a guarantor of this facility. The Company also secured $60m in debt finance at the asset level for the first time to support the 200 MW Big Rock project. Notwithstanding the investment restrictions, the Company continues to apply a firm borrowing limit of no more than 30 per cent. of gross assets at any time and the Directors commit to inform shareholders prior to any amendment of its views and guidelines on gearing. After the existing debt facilities are fully drawn down, the Aggregate Group Debt would be c.15% of the current GAV, highlighting the current low level of gearing within the Group and available headroom to increase borrowings should it benecessary. Promoting the Company The Company’s shares are traded on the Main Market of the London Stock Exchange and are available for purchase from a range of stockbrokers. The Company promotes its shares through the Manager and the Joint Brokers, who meet with existing and potential shareholders on a regular basis at one-to- one meetings, roadshows and conferences. The Investment Manager is available at all reasonable times to meet with principal shareholders and key sector analysts. Shareholders are encouraged to send questions to the Board by contacting [email protected], and meetings with the Chair or other Board members are offered to professional investors where appropriate. Strategic Report Annual Report for year ended 31 March 2024 37 Purpose, Values and Culture PURPOSE In line with its investment objective, the Company’s purpose is to deliver income and long-term capital growth to its investors by the development of a geographically diverse portfolio of utility- scale battery storage systems that are a critical component in accelerating the transition to a lower carbon economy. In addition to delivering financial returns to investors, the Company’s underlying operations are designed to support the environmental sustainability of global grid systems. The Board and the Manager understand that the Company has a broader responsibility to go beyond its environmental contributions and to evaluate how best to integrate and improve the environmental, social and governance frameworks of its investments and operations. VALUES The Company’s values are aligned to its purpose and to the standards expected of a Company listed on the Premium Segment of the Main Market of the London Stock Exchange. The Company's core values are: • To focus on the long-term sustainability of the business. • To act openly and transparently with all stakeholders, fostering long-term relationships with transparency. • To combine entrepreneurial agility with the strength of a listed company to reliably execute the Company’s purpose and deliver its investment objective. CULTURE As the Company does not have employees, the Board’s focus is on ensuring the Company’s key service providers are well governed and have the right resources to deliver the services they provide for the Company. In addition, the Board reviews key service providers’ strategies and policies relating to Environmental Sustainability, Social Impact and Governance to ensure they are in line with the Company’s purpose and values. The Board reviewed statements or policies from key service providers on anti-bribery and corruption; Modern Slavery Act 2015 statements; equity, inclusion and diversity; and carbon footprint, including greenhouse gas and energy usage reporting. Energy storage is a relatively new area of investment. The Board’s aim is to help ensure that the Manager is not only meeting the industry standards but also aims to be a market leader and demonstrate best practices when it comes to engagement and responsibilities towards its stakeholders. Corporate and Social Responsibility DIVERSITY As at 31 March 2024, the Board comprised of three men and two women. No members of the Board were from an ethnic minority background. The Company has adopted a diversity and inclusion policy. It applies to Board and committee appointments. Diversity includes and makes good use of differences in knowledge, and understanding of relevant diverse geographies, peoples, and their backgrounds including race or ethnic origin, sexual orientation, gender, age, disability, religion or socio-economic, educational or professional background. Appointments to the Board will be made on merit and objective criteria, in the context of complimenting and expanding the skills, knowledge and experience of the Board as a whole. As the Company is an investment trust with no employees or senior management, and a small number of Directors, it will aim to meet the board diversity targets set out in Listing Rule 9.8.6R(9) where possible. As at 31 March 2024, the Company had not met the targets relating to Board diversity relating to the number of individuals from a minority ethnic background. Please refer to the Remuneration and Nomination committee report for details of upcoming recruitment. Listing Rule 9.8.6R(10) requires the Company to specify Board diversity as broken down by gender identity or sex, and ethnic background. The Directors provide this information to the Company. The tables below detail this. As an investment trust, with no executive management, the Company does not include columns relating to executive management in the tables below. Number of Board members Percentage of the Board Number of senior positions on the Board (SID and Chair) Men 3 60% 1 Women 2 40% 1 Not specified/ prefer not to say 0 0% 0 Number of Board members Percentage of the Board Number of senior positions on the Board (SID and Chair) White British or other White (including minority-white groups) 5 100% 2 Mixed/ Multiple Ethnic Groups 0 0% 0 Asian/ Asian British 0 0% 0 Black/ African/ Caribbean/ Black British 0 0% 0 Other ethnic group, including Arab 0 0% 0 Not specified/ prefer not to say 0 0% 0 Strategic Report 38 Gore Street Energy Storage Fund plc RELATIONS WITH SHAREHOLDERS The Company places great importance on communication with its shareholders and welcomes the views of shareholders. In addition to the meetings and engagement with shareholders described above, the Directors all attend the AGM and are available to respond to questions from shareholders. The Board receives comprehensive Shareholder reports from the Company’s Registrar and regularly monitors the views of Shareholders and the Shareholder profile of the Company. The Board is also kept fully informed of all relevant market commentary on the Company by the Manager. Shareholders may also find Company information or contact the Company through its website: www.gsenergystoragefund.com GREENHOUSE GAS EMISSIONS REPORTING The Board has considered the requirement to disclose the Company’s measured carbon emissions sources under The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. The Company is a closed-ended investment company which has no employees and so its own direct environmental impact is minimal. It identifies as a low energy user (less than 40,000 KWh/year). However, the Company published a Sustainability Report for the year ended 31 March 2023 which included emissions and energy usage data for the Company’s underlying investments: 2023-gore- street-energy-storage-fund-esg-and-sustainability-report.pdf (gsenergystoragefund.com). The Company’s SFDR Annex IV report is included on page 93. Section 172 Statement The Directors have had regard for the matters set out in section 172(1)(a) and (c) to (f) of the Companies Act 2006 when performing their duty under section 172. Subsection (b) is not applicable to the Company as it has no employees. The Directors consider that they have acted in good faith in the way that would be most likely to promote the success of the Company for the benefit of its members as a whole, while also considering the broad range of stakeholders who interact with and are impacted by its business, especially with regard to principal decisions. In doing the above, the Directors have taken into account the following: (a) the likely consequences of any decision in the long-term; (b) the need to foster the Company’s business relationships with suppliers, customers and others; (c) the impact of the Company’s operations on the community and the environment; (d) the desirability of the Company maintaining a reputation for high standards of business conduct; and (e) the need to act fairly as between members of the Company. KEY STAKEHOLDERS Stakeholder Why they are important and how the Company engages with them Shareholders Shareholders own the Company and the Board is focused on delivering shareholder returns in line with the investment policy. Shareholders and prospective investors are also key to implementing the Company’s strategy. Engagement activities include obtaining shareholder and prospective investor buy-in for delivery of strategic objectives. The Company will continue to engage with shareholders in future either directly or via the Company’s brokers and Manager. The Manager (Investment Manager and Commercial Manager) The Investment Manager is responsible for the development and implementation of the investment strategy, including the acquisition, origination, and execution of projects. The Commercial Manager is responsible for management of the assets. Together they work to help the Company meet the expectations of its investors and the targets in the Investment and Dividend Policies. The Board and the Manager maintain an ongoing open dialogue on key issues facing the Company. This open dialogue takes the form of regular and ad hoc board meetings and more informal contact, as appropriate. Service providers and contractors The Company engages service providers who provide management, administration and other services. The intention is to maintain long-term and high-quality business partnerships to ensure stability while the Company pursues its growth strategy. The Company and its investments are reliant on the Manager selecting reputable suppliers and experienced O&M service providers. The failure of any of the Group’s suppliers (including EPC contractors and O&M service providers) may result in closure, seizure, enforced dismantling or other legal action in respect of the Group’s projects. Strategic Report Annual Report for year ended 31 March 2024 39 Subcontractors and the project supply chain The Company’s service providers and contractors are dependent on other service providers and suppliers. The Company is mindful that its subcontractors and project supply chain can affect theCompany. The Company selects contractors adhering to the highest standards in their respective fields and requests reporting on the application of those standards on a regular basis. Regulators, governments and grid operators The Company is subject to regulations in each of the geographies it operates in. The Board regularly considers how it meets regulatory and statutory obligations and follows voluntary and best practice guidance, including how any governance decisions it makes impact its stakeholders both in the short and long term. The Manager engages with regulators and grid operators on the Company’s behalf. Local communities and the environment The Board recognises the importance of the communities in which the Company operates. As the Company develops assets closer to communities, it will ensure that its environmental and social footprint takes account of the local communities and is sympathetic to the locality, taking account of local views which will be obtained via the planning process. PRINCIPAL DECISIONS Decision Stakeholder considerations Payment of dividends Dividend payments are approved by the Board on a quarterly basis based on recommendations from the Manager and supported with analysis from the Administrator. The support includes considering the level of distributable reserves and cash flow projections. In line with the Investment Objective a key area of focus for the Board is to deliver a sustainable return to shareholders. The Board is also mindful of the need to balance short-term returns and payment of dividends and longer-term growth delivered by continuing to invest in a diversified portfolio. The Board also considers the need to meet the ongoing requirements of the investment trust regime and ensures that dividends distributed also meet the minimum required by the law. Nidec strategic partnership and share issuance The Company enhanced its relationship with a key supplier by agreeing a long-term strategic partnership with Nidec Motor Corporation (“Nidec”). This included Nidec being selected as EPC contractor for the Dogfish site in Texas as well as Nidec subscribing for 14 million new shares in the Company. Strategic partnerships with large, international corporations in the energy supply chain help strengthen the Company’s ability to build and operate its assets in the grids it operates in. Deeper relationships with suppliers help develop better understanding and alignment of interests and goals, which is beneficial for the Company, its shareholders, and the suppliers. This partnership is also beneficial for shareholders, as it raised £15.8 million in gross proceeds, reducing the amount of cash or debt financing required for the development of the Company’s projects. Consolidating ownership of Irish assets and strengthening partnership with Low Carbon The Company acquired the remaining 49% stake in two of the Company’s Irish assets: Kilmannock and Porterstown from strategic partner Low Carbon. This was part of a transaction that also included acquiring a 51% interest in a new pre-construction asset, Project Mucklagh. The consideration for the transactions included the issuance of 9.7 million new shares in the Company The Company’s diversification strategy is important to reduce risk through geographic and revenue diversification and deliver sustainable returns for shareholders. These acquisitions in the Irish market benefit shareholders. Shareholders also benefit from the structuring of the transactions, which included the issuance of new shares as consideration, freeing up cash and reducing the need for debt financing for other projects. The stronger relationship with Low Carbon, an existing long-term partner, is beneficial for the Company, its shareholders and its partner. Capital management and debt financing In addition to the capital raised through the share issuance to strategic partners, the board was mindful of the need to keep developing the Company’s projects. After careful consideration the board agreed to increase the use of conservative debt financing to fund the development of international assets. The Company’s existing revolving credit facility with Santander was increased from £15 million to £50 million. In addition, the Big Rock asset secured a $60 million finance facility from First Citizens Bank to fund the remaining capital costs of the Big Rock project. Prudent capital management, including the use of conservative debt, is beneficial for shareholders, increasing returns on investment and accelerating revenue generation opportunities from bringing new assets online. Stronger relationships with the Company’s lenders is mutually beneficial and leads to greater understanding of the Company by the lenders and the ability to potentially work together in future. Strategic Report 40 Gore Street Energy Storage Fund plc Risk Management and Internal Control The Board is responsible for the Company’s system of risk management and internal control and for reviewing its effectiveness. The Board has adopted a detailed matrix of principal risks affecting the Company’s business as an investment trust and has established associated policies and processes designed to manage and, where possible, mitigate those risks, which are monitored by the audit committee on an ongoing basis. This system assists the Board in determining the nature and extent of the risks it is willing to take in achieving the Company’s strategic objectives. Both the principal risks and the monitoring system are subject to robust review at least annually. The last review took place in July 2024. Although the Board believes that it has a robust framework of internal controls in place this can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk. Actions taken by the Board and, where appropriate, its committees, to manage and mitigate the Company’s principal risks and uncertainties are set out in the table below. The “Change” column on the right highlights at a glance the Board’s assessment of any increases or decreases in risk during the year after mitigation and management. The arrows show the risks as increased or decreased. EMERGING RISKS AND UNCERTAINTIES During the year, the Board also discussed and monitored risks that could potentially impact the Company’s ability to meet its strategic objectives. Political risk which includes regulatory, fiscal and legal changes impacting strategy, and potential changes to national and cross-border energy policy, was assessed to be a matter to keep under consideration. The Board has determined they are not currently sufficiently material for the Company to be categorised as independent principal risks. The Board receives updates from the Manager, Company Secretary and other service providers on other potential risks that could affect the Company. The Board also considered the uncertainties caused by the conflict in Ukraine and Gaza, an uncertain economic outlook and volatile energy prices although they are not factors which explicitly impacted the Company’s performance. PRINCIPAL RISKS AND UNCERTAINTIES Risk Description Mitigation and Management Change Changes to Market Design The Company’s assets generate revenue by delivering balancing services to power grid operators in the United Kingdom, Ireland, Germany, Texas and California. There is a risk in any of those markets that unanticipated changes to the design of the grid, of power system services or any change in the specifications and requirements for service delivery (including network charges or changes to market rules) could negatively impact cash flow or constrain revenue projections for assets within the region in which a change occurs and thereby reduce the net asset value of the affected assets. The Company has assets in five grids to mitigate the impact of one grid’s changes. In addition, the Manager aims to stack revenue contracts to vary the types of income streams received from each system operator and within each market to mitigate against revenue risk. ↔ Inflation The Company’s profit projections are based in part on its budget for capital and operating expenditure incurred in the construction, operation, and maintenance of its portfolio of battery storage assets. These include, amongst other things, the cost of battery cells, inverters, the cost of power required to charge the batteries and the labour costs for operations. There is a risk that unanticipated inflation will increase capital expenditure and operating costs materially beyond budget, without a commensurate impact on revenues, with the consequence of reducing profitability below the investment forecast and/or rendering projects less economic or uneconomic. There is also a risk that continued or severe inflation could positively and/or negatively change the grid power market design (see Changes to Market Design above). The Company has little exposure to debt financing but has access to debt facilities. There is a risk that increases in the inflationary index rates could render the interest rates applicable to these debt facilities less economic or uneconomic. The Company ensures that it generates revenues in the markets in which it incurs operating costs from a diverse mix of short, medium and long-term contracts that are subject to fixed or floating contract prices. As revenues are pegged to operating expenditure, the Company shall aim to neutralise inflationary increases (e.g., cost of power to charge the batteries) by rebalancing its revenue services (e.g., changing the timing or bases for charging batteries to either reduce costs or increase revenues) as appropriate to maintain its investment forecast. The long-term Capacity Market contracts of up to 15 years are index linked. ↔ Strategic Report Annual Report for year ended 31 March 2024 41 Risk Description Mitigation and Management Change Exposure to Lithium-Ion Batteries, Battery Manufacturers and technology changes The portfolio currently consists only of lithium-ion batteries. The Group’s battery energy storage systems are designed by a variety of EPC providers, but the underlying lithium-ion batteries are manufactured primarily by BYD, CATL and LG Chem. While the Company considers lithium-ion battery technology to be the most efficient and most competitive form of storage in today’s market, there is a risk that other technologies may enter the market with the ability to provide similar or more efficient services to power markets at comparable or lower costs, reducing the portfolio’s market share of revenues in the medium or long term. There is also a risk that batteries might be unavailable due to delays caused by supply chain issues. The Company remains technology agnostic and continues to evaluate other economically viable energy storage opportunities to reduce its exposure to lithium-ion and further diversify its portfolio mix. The Company is mindful of the ESG risks associated with the production and recycling of batteries. The Company is not under an exclusivity agreement with any individual battery manufacturer and will manage its supply framework agreements in a manner that allows it to take advantage of any improvements or amendments to new storage technologies as they become commercially viable, as well as mitigating any potential supply chain issues. ↔ Service Provider The Company has no employees and has delegated certain functions to several service providers, principally the Manager, Administrator, depositary and registrar. Failure of controls, and poor performance of any service provider, could lead to disruption, reputational damage or loss. Service providers are appointed subject to due diligence processes and with clearly documented contractual arrangements detailing service expectations. Regular reports are provided by key service providers and the quality of their services is monitored. The Directors also receive presentations from the Manager, depositary and custodian, and the registrar on an annual basis. Review of annual audited internal controls reports from key service providers, including confirmation of business continuity arrangements and IT controls, and follow up of remedial actions as required. ↔ Valuation of Unquoted Assets The Company invests predominantly in unquoted assets whose fair value involves the exercise of judgement by the Investment Manager. There is a risk that the Investment Manager’s valuation of the portfolio may be deemed by other third parties to have been overstated or understated. The Investment Manager routinely works with market experts to assess the reasonableness of key data used in the asset valuation process (such as revenue and inflation forecasts) and to reassess its valuations on a quarterly basis. In addition, to ensure the objective reasonableness of the Company’s NAV materiality threshold and the discount rates applied, a majority of the components of the portfolio valuation, (based on a NAV materiality threshold) are reviewed by an independent third party, prior to publication of the half- year and year-end reports. ↔ Delays in Grid Energisation or Commissioning The Company relies on EPC contractors for energy storage system construction, and on the relevant transmission systems and distribution systems’ owners (TSO) for timely energisation and connection of that battery storage asset to the transmission and distribution networks appropriately. There is a risk that either the EPC contractor or relevant TSO could delay the target commercialisation date of an asset under construction and negatively impact projected revenues. The Company works closely with EPC contractors to ensure timely performance of services and imposes liquidated damage payments under the EPC contracts for certain delays in delivery. The Company seeks commitments from TSOs to a target energisation date as a condition to project acquisition and provides maximum visibility on project development to TSOs to encourage collaboration towards that target energisation date. The Manager factors in delays by adjusting the valuation on an ongoing basis. ↔ Currency Exposure The Company is the principal lender of funds to Group assets (via intercompany loan arrangements) for their investments in projects, including projects outside of the UK. This means that the Company may indirectly invest in projects generating revenue and expenditure denominated in a currency other than Sterling, including in US Dollars and Euros. There is a risk that the value of such projects and the revenues projected to be received from them will be diminished as a result of fluctuations in currency exchange rates. The diminishing in value could impact a subsidiary’s ability to pay back the Company under the intercompany loan arrangements. The Company acts as guarantor under currency hedge arrangements entered into by impacted subsidiaries to mitigate its exposure to Euros and US Dollars. The Company will also guarantee future hedging arrangements as appropriate to seek to manage its exposure to foreign currency risks. ↔ Strategic Report 42 Gore Street Energy Storage Fund plc Risk Description Mitigation and Management Change Cyber-Attack and Loss of Data The Company is exposed (through the server, software, and communications systems of its primary service providers and suppliers) to the risk of cyber-attacks that may result in the loss of data, violation of privacy and resulting reputational damage. Among other measures, the Company ensures its contractors and service providers incorporate firewalls and virtual private networks for any equipment capable of remote access or control. Cybersecurity measures are incorporated for both external and internal (‘local’) access to equipment, preventing exposure to ransomware attacks or unsolicited access for any purpose. The Company engages experts to assess the adequacy of its cybersecurity measures and has implemented a requirement for annual testing to confirm and certify such adequacy for representative samples for the entire fleet. → Physical and transitional climate-related risks The Company’s assets are located in several different countries, some of which experience extreme weather, which could have a physical impact on the assets and as a result affect shareholder returns. Climate change may also affect the development of technologies, markets and regulations. The Manager’s due diligence and site design processes factor in climate change-related risks when selecting sites and assets and designing systems to operate within a range of temperatures. The Manager reports to the Board on developments in these areas regularly, including recommendations for the Company to acclimate to technological, market or regulatory change, including any driven by climate change. → RISK ASSESSMENT AND INTERNAL CONTROLS REVIEW BY THE BOARD Risk assessment includes consideration of the scope and quality of the systems of internal control operating within key service providers, and ensures regular communication of the results of monitoring by such providers to the audit committee, including the incidence of significant control failings or weaknesses that have been identified at any time and the extent to which they have resulted in unforeseen outcomes or contingencies that may have a material impact on the Company’s performance or condition. No significant control failings or weaknesses were identified from the audit committee’s ongoing risk assessment which has been in place throughout the financial year and up to the date of this report. The Board is satisfied that it has undertaken a detailed review of the risks facing the Company. A full analysis of the financial risks facing the Company is set out in note 18 to the Financial Statements on pages 80 to 82. Strategic Report Annual Report for year ended 31 March 2024 43 GOING CONCERN As at 31 March 2024, the Company had net current assets of £59 million and had cash balances of £60.7 million (excluding cash balances within investee companies), which are sufficient to meet current obligations as they fall due. The major cash outflows of the Company are the payment of dividends, costs relating to the acquisition of new assets and further investments in existing portfolio Companies, all of which are discretionary. The Company is a guarantor to GSES 1 Limited’s revolving credit facility with Santander. During the year this facility was increased from £15m to £50m, with an extended term of four years to 2027. The Company also secured $60m in debt finance at the asset level for the first time to support the 200 MW Big Rock project. The Aggregate Group Debt as at 31 March 2024 was at 6.5% of GAV with £58.6 million in debt headroom available. There is no debt held at the Company level. The completed going concern analysis considers liquidity at the start of the period and cash flow forecasts at both the Company level and project level. These forecasts take into consideration expected operating expenditure of the Company, expected cash generation by the project companies available for distribution to the Company, additional funding from the Company to project companies under construction, and continued discretionary dividend payments to Shareholders at the target annual rate. Financial assumptions also include expected inflows and outflows in relation to external debt held of the Company or its subsidiaries. The Directors have reviewed Company forecasts and projections which cover a period of 18 months from 31March 2024, and as part of the going concern assessment have modelled downside scenarios considering potential changes in investment and trading performance, which show that the Company has sufficient financial resources. The Directors consider the following scenarios: • A base case scenario considering expected Company operating expenditure and dividends, and cash inflows and outflows relating to subsidiary companies under the current planned strategy to focus on build-out of existing construction projects. This factors in expectations of available externaldebt. • Although a simultaneous reduction in project companies’ revenue across the five grids they operate is not considered likely, a plausible average reduction in base case revenue has been considered as a downside scenario. This would result in a reduction in cash flow available for distribution from subsidiaries to the Company. This analysis shows that, under both the base case and downside scenarios, the Company is expected to have sufficient financial resources available to meet current obligations and commitments as they fall due for at least 12 months until 30 September 2025. The Directors acknowledge their responsibilities in relation to the financial statements for the year ended 31 March 2024 and the preparation of the financial statement on a going concern basis remains appropriate and the Company expects to meet its obligations as and when they fall due for at least 12 months until 30 September 2025. LONG TERM VIABILITY In reviewing the Company’s viability, the Directors have assessed the prospects of the Company over a period of five years to 31March 2029. After assessing the risks, which include emerging risks like climate change and reviewing the Company’s liquidity position, together with the forecasts of performance under various scenarios, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities over the period of five years. In making this statement, the Directors have reviewed cash forecasts over this period, taking into consideration base case expectations and potential downside scenarios. The Directors have also considered the current unlevered nature of the Company and its subsidiaries and its capacity and ability to raise further debt up to 30% of Gross Asset Value per internal policy. The diversified nature of the portfolio, across five different grids, has been taken into account when assessing concentration of any prolonged downturns to the portfolio. In addition, mitigating actions under severe downside scenarios have been considered, such as the discretionary nature of dividends and ability to delay uncontracted capital expenditure on build out of construction phase projects in the portfolio. This assessment has not considered the potential for further fundraising through equitymarkets. By order of the Board Gore Street Services Limited Company Secretary 12 July 2024 Strategic Report Governance 44 Gore Street Energy Storage Fund plc Governance Annual Report for year ended 31 March 2024 45 Pat Cox Status: Independent Non-Executive Chair Length of service: six years – appointed in February 2018 Experience: Mr Cox has significant board experience and is currently a member of the Appointment Advisory Committee for the European Investment Bank, Chair of Ecocem Ltd, and holds non-executive directorships of Supernode Ltd and Gresham House Ireland Asset Management Ltd. He also sits on the Boards of various think tanks and not- for-profit organisations, including the Institute for International and European Affairs, Ireland and the Third Age Foundation Ireland. Mr Cox served as a Member of the European Parliament for Munster, Ireland, from 1989 to 2004, becoming the leader of its Liberal Democrat Group from 1998 to 2002 before holding the presidency of the European Parliament between 2002 and 2004. He has been bestowed National Honours by the Presidents of nine European countries, and is a Commander of the Legion of Honour, France. His ongoing work includes serving as European Coordinator for the Scandinavian-Mediterranean TEN-T Core Network Corridor and leading a parliamentary reform programme with Ukraine. Mr Cox is a graduate of Trinity College, Dublin and holds Honorary Doctorates from Trinity College Dublin, the National University of Ireland, the University of Limerick, the Open University, and the American College Dublin. Committee membership: audit, management engagement (chair), and remuneration and nomination committees Annual remuneration: £79,000 (with effect from 1 April 2024) Number of shares held: 246,496 Caroline Banszky Status: Senior Independent Non-Executive Director Length of service: six years – appointed in February 2018 Experience: Ms Banszky is currently a non-executive director of IntegraFin Holdings plc, where she chairs the Audit and Risk Committee and is a member of the Investment Sub-Committee of The Open University. Ms Banszky was previously a director and member of the Finance & Investment Committee of the Benefact Trust Ltd, a non-executive director and chair of the Audit and Compliance Committee of 3i Group plc and a director of the UK Stem Cell Foundation. Formerly the Chief Executive of The Law Debenture Corporation plc from 2002 to 2016, Ms Banszky was also Chief Operating Officer of SVB Holdings plc (now Novae Group plc) – then a Lloyd’s listed integrated vehicle – from 1997 to 2002 and Finance Director of N.M. Rothschild & Sons Ltd from 1995 to 1997, having joined the bank in 1981. She originally trained at what is now KPMG and is a fellow of the Institute of Charted Accounts of England and Wales. Committee membership: audit (chair), management engagement, and remuneration and nomination committees Annual remuneration: £59,000 (with effect from 1 April 2024) Number of shares held: 60,000 Max King Status: Independent Non-Executive Director Length of service: six years – appointed in February 2018 Experience: Mr King’s varied career in financial services includes over 30 years in investment management. He was responsible for the investments of seven investment trusts during his decade-long tenure as investment manager at Finsbury Asset Management before moving to J O Hambro Capital Management, where he was director and investment manager of two investment trusts and a number of other portfolios. From 2004 until 2016, Mr King worked at Investec Asset Management where he was the co-manager of various multi-asset funds invested in internal and external funds, including closed- ended funds. A Chartered Accountant trained at Peat, Marwick & Mitchell (now KPMG), he is currently a non- executive director of Ecofin Global Utilities & Infrastructure Trust plc and previously served as a non-executive director of Henderson Opportunities Trust. Mr King, an economics graduate of Trinity College, Cambridge, also writes regularly for MoneyWeek and engages in several unpaid commitments. Committee membership: audit, management engagement, and remuneration and nomination committees Annual remuneration: £49,000 (with effect from 1 April 2024) Number of shares held: 50,000 The Board of Directors Governance 46 Gore Street Energy Storage Fund plc Tom Murley Status: Independent Non-Executive Director Length of service: six years – appointed in February 2018 Experience: Mr Murley was a director at London-based private equity firm HgCapital from 2004 to 2016, where he established a renewable energy investment fund business that went on to raise and invest over $1bn in equity across more than 70 EU wind, solar, biomass and hydroelectric projects. From 2016 to 2018 Mr Murley continued to act as Chairman and Senior Advisor to the HgCapital Renewable Energy team, which spun out to become Asper Investment Management in December 2017. In 2012 Mr Murley was appointed non-executive director to the inaugural board of the UK Green Investment Bank, where he also served on the investment committee, and remained on the Board until privatisation in August 2017. In October 2016 he was appointed as an independent non-executive director of Ameresco Inc, a renewable energy and energy efficiency company listed on the New York Stock Exchange. Mr Murley also serves as an independent investment committee member for two private renewable energy investment funds based in New York and Amman, Jordan. Mr Murley was a lawyer between 1993 and 2003 and later became Managing Director of EIF Group in Boston Massachusetts, one of the first energy infrastructure funds. He has a History degree from Northwestern University in Evanston, Illinois, and a Law Degree, with honours, from Fordham University in New York. Committee membership: audit, management engagement, and remuneration and nomination (chair) committees Annual remuneration: £49,000 (with effect from 1 April 2024) Number of shares held: 75,000 Lisa Scenna Status: Independent Non-Executive Director Length of service: one year – appointed May2023 Experience: Lisa Scenna is an experienced executive and non-executive director in listed and private sector organisations across real estate, infrastructure, construction and funds management in the UK, Europe, Australia, Canada and Middle East. Shehas held sector specific executive roles in the property, infrastructure and fund management sectors with Stockland and Westfield in Australia, and Laing O’Rourke and Morgan Sindall Group in the UK. She is currently a non-executive director with Cromwell Property Group, Dexus Capital Funds Management, Genuit Group plc, Harworth Group plc and Ingenia Communities Holdings Ltd. Lisa has previously been non-executive director for the charity Hub Community Foundation and Deputy Chair for The Private Infrastructure Development Group, a platform investing in infrastructure on behalf of various government agencies, including UK and Australia. Lisa is a Fellow of Chartered Accountants Australia and New Zealand and a Member of the Australian Institute of Company Directors. Committee membership: audit, management engagement, and remuneration and nomination committees Annual remuneration: £49,000 (with effect from 1 April 2024) Number of shares held: 35,000 Governance Annual Report for year ended 31 March 2024 47 Directors’ Report The Directors submit their report and the audited financial statements of the Company for the year ended 31 March 2024. Directors and officers CHAIR The Chair is an independent non-executive Director, responsible for leadership of the Board and ensuring its effectiveness. The Chair’s other significant commitments are detailed on page 45. He has no conflicting relationships. SENIOR INDEPENDENT DIRECTOR (“SID”) Caroline Banszky is the Board’s SID and has held the position since July 2022. She acts as a sounding board for the Chair, meets with major shareholders as appropriate, provides a channel for any shareholder concerns regarding the Chair and takes the lead in the annual evaluation of the Chair. COMPANY SECRETARY Gore Street Services Limited provides company secretarial support and governance advice to the Board and Chair. The Company Secretary is responsible for regulatory compliance and supporting the Board’s continuing obligations with respect to corporate governance. The Company Secretary also manages the Company’s relationship with the Company’s service providers, except for the Investment Manager and the Commercial Manager. Shareholders are invited to contact the Company Secretary with any questions for the Board at [email protected]. Any questions relating to individual shareholdings should be directed to the Company’s Registrar at 0370 703 6253. Role and operation of the Board The Board (of five Directors, listed on pages 45 and 46) is the Company’s governing body. The Board is responsible for managing the business affairs of the Company in accordance with the Articles, the Companies Act, any direction given by the shareholders by special resolution and the investment policy. It has overall responsibility for the Company’s activities including its strategy and investment activities. The Board is collectively responsible to shareholders for the Company’s long-term success. The Board is responsible for appointing and subsequently monitoring the activities of the Manager and other service providers to ensure that the investment objective of the Company continues to be met. The Board also ensures that the Manager adheres to the investment restrictions set by the Board and acts within the parameters it sets in respect of any gearing. The Strategic Report on pages 32 to 43 sets out how the Board reviews the Company’s strategy, risk management and internal controls and also includes other information required for the Directors’ Report, and is incorporated by reference. A formal schedule of matters specifically reserved for decision by the Board has been defined and a procedure adopted for Directors, in the furtherance of their duties, to take independent professional advice at the expense of the Company. The Chair ensures that all Directors receive relevant management, regulatory and financial information in a timely manner and that they are provided, on a regular basis, with key information on the Company’s policies, regulatory requirements and internal controls. At the quarterly Board meetings Directors review investment and asset management performance, financial reporting and services provided by third parties. Additional meetings are arranged when needed. The Directors’ conflicts of interest policy requires Directors to disclose all actual and potential conflicts of interest as they arise for consideration and approval by the Board. The Board may impose restrictions or refuse to authorise such conflicts if deemed appropriate. No Directors have any connections with the Manager, shared directorships with other Directors or material interests in any contract which is significant to the Company’s business. BOARD COMMITTEES The Board has delegated certain functions to committees. The roles and responsibilities of these committees, together with details of work undertaken during the year under review, are outlined in their reports. The reports of the audit committee, management engagement committee, and remuneration and nomination committee are incorporated into and form part of the Directors’ Report. The Investment Manager Gore Street Capital Limited, the Investment Manager, acts as the Company’s authorised investment fund manager (“AIFM”) and investment manager. It is authorised and regulated by the Financial Conduct Authority. It provides the Company with investment management and risk management services as set out in the AIFM Agreement, which is governed under the laws of England and Wales. The Investment Manager is headquartered in the UK and comprises a strong team of investment professionals with significant experience in sourcing, structuring, and managing large renewable energy projects globally. The Investment Manager was the first to deploy privately-owned large-scale battery projects in Great Britain. For the year ended 31 March 2024, the Investment Manager was entitled to receive an investment management fee, an AIFM fee, and if certain conditions were met, a performance fee. Under the terms of the Management Agreement, the Investment Manager is entitled to receive from the Company an advisory fee payable quarterly in arrears calculated at the rate of a quarter of one per cent of Adjusted NAV. Adjusted NAV is NAV minus “Uncommitted Cash”, where Uncommitted Cash means all cash on the Company balance sheet that has not been allocated for repayment of a liability on the balance sheet or any earmarked capital costs of the Company or any of its subsidiaries. Inaddition, the Investment Manger receives a fee of £75,000 per annum for acting as AIFM, and receives £667 for each Annex IV report filed on behalf of the Company. The Investment Manager is also entitled to a performance fee of 10% of any outperformance of the NAV over an annual hurdle Governance 48 Gore Street Energy Storage Fund plc of 7%, provided that the closing NAV per share exceeds the high water mark NAV at the date the last performance fee was paid. The performance fee is capped at 50% of the annual management fee. The AIFM Agreement can be terminated by either party on 12 months’ notice by either party, as well as in certain other circumstances such as breaches or insolvency. The termination provisions in the AIFM Agreement provide that in the specific event of a takeover offer for the Company becoming wholly unconditional the AIFM Agreement will terminate automatically with no requirement for notice to be served and the Investment Manager will be entitled to a performance fee equal to 20 per cent. of the amount (if any) by which the offer price multiplied by the number of ordinary shares in issue exceeds the prescribed benchmark for payment of a performance fee, such fee to be capped at 3.49% of NAV in the financial year to 31March 2023 and 3.99% of NAV thereafter (the ‘Exit Performance Fee’) plus a fee equal to 1 per cent. of Adjusted NAV; or where no Exit Performance Fee is payable, the Investment Manager will instead be entitled to a fee equal to 2 per cent. of Adjusted NAV (the ‘Minimum Takeover Fee’). If the aggregate amount of any Exit Performance Fee payable plus 1 per cent. of Adjusted NAV is less than the Minimum Takeover Fee, then the Investment Manager shall instead receive the Minimum Takeover Fee. The management engagement committee reviewed the performance of the Investment Manager during the year under review and agreed that the Investment Manager continues to have the appropriate depth and quality of resource to deliver superior returns over the longer term. The Board received, and approved, the recommendation that the Investment Manager’s appointment under the terms of the AIFM agreement is in the best interests of shareholders as a whole. For details of the fees paid to the Investment Manager, please refer to note 6 on page 73. THE COMMERCIAL MANAGER Gore Street Services Limited (the Commercial Manager) has been appointed to provide various commercial services to the Company, including asset management and construction oversight, as well as administrative, accounting and company secretarial support. THE DEPOSITARY Indos Financial Limited is the Depositary to the Company. It is authorised and regulated by the Financial Conduct Authority. AsDepositary it is responsible for oversight of the Company and Investment Manager, cash-flow monitoring, and record keeping and verification of assets. THE ADMINISTRATOR Apex Group Fiduciary Services (UK) Limited (previously Sanne Group Fiduciary Services (UK) Limited) (“Apex”) is Administrator to the Company. During the year ended 31 March 2024, as Administrator, Apex on behalf of the Directors, was responsible for the maintenance of accounting records, preparation of the annual financial statements, cash management services comprising processing and making payments for the Company and the calculation, in conjunction with the Investment Manager, of the Net Asset Value of the Company. Corporate Governance Code disclosures The Board has considered the Principles and Provisions of the AIC Code of Corporate Governance (AIC Code). The AIC Code addresses the Principles and Provisions set out in the UK Corporate Governance Code (the UK Code), as well as setting out additional Provisions on issues that are of specific relevance to the Company. The Board considers that reporting against the Principles and Provisions of the AIC Code, which has been endorsed by the Financial Reporting Council provides more relevant information to shareholders. The Company has complied with the Principles and Provisions of the AIC Code. The AIC Code is available on the AIC website (www. theaic.co.uk). It includes an explanation of how the AIC Code adapts the Principles and Provisions set out in the UK Code to make them relevant for investment companies. The Financial Conduct Authority requires all UK listed companies to disclose how they have complied with the provisions of the UK Code. This statement, together with the Statement of Directors’ Responsibilities, viability statement and going concern statement set out on pages 57 and 43 respectively, indicates how the Company has complied with the principles of good governance of the AIC Code and its requirements on internal control. The Strategic Report and Directors’ Report provide further details on the Company’s internal controls (including risk management), governance and diversity policy. The Board confirms that the Company has complied with the AIC Code during the year under review. Revenue and Dividends The financial statements of the Company for the period appear from page 64. Total Comprehensive loss for the year 31 March 2024 was £5,658,539 (total comprehensive income for the year ended 31 March 2023: £63,412,295). The Directors have approved a fourth interim dividend of 1.5 pence per share be paid, bringing the total dividend in respect of the period ended 31 March 2024 to 7.5 pence per share (7.5 pence per share 31 March 2023), in line with the Dividend Policy. Dividend Policy It is the Directors’ intention to continue to pay an attractive level of dividend income to shareholders with distributions on a quarterly basis, subject to market conditions and performance, financial position and outlook, and fiscal environment. The Company will target a dividend of 7.0p for the financial year, aligning with the previous year’s target based on the current NAV. From this financial year (2024/25) however, the profile and quantum of dividend distributions will be more closely aligned with operational and other cashflows rather than NAV. Accordingly, the Company will target a dividend of 1.0 pence per Ordinary Share for each of the first three quarters of the financial year. It is intended that the amount of the final quarterly dividend (announced in June and paid in July) will make up the balance of the annual dividend target subject to cash flows at the time. Investors should note that the payment of dividends is at the discretion of the Board and the Directors may resolve to pay dividends otherwise than in accordance with the targets noted above in order to reflect the Company’s expected returns and future plans for the growth of the Company. Governance Annual Report for year ended 31 March 2024 49 Other required Directors’ Report disclosures under laws, regulations, and the AIC Code STATUS The Company was incorporated on 19 January 2018 and carries on business as an investment trust. Its shares are listed and were admitted to trading on the premium segment of the main market of the London Stock Exchange on 25 May 2018. It has been approved by HM Revenue & Customs as an investment trust in accordance with section 1158 of the Corporation Tax Act 2010, by way of a one-off application and it is intended that the Company will continue to conduct its affairs in a manner which will enable it to retain this status. The Company is domiciled in the UK and is an investment company within the meaning of section 833 of the Companies Act 2006. The Company is not a “close” company for taxation purposes. It is not intended that the Company should have a limited life but the Directors consider it desirable that the shareholders should have the opportunity to review the future of the Company at appropriate intervals. Accordingly, the articles of association contain provisions requiring the Directors to put a proposal for the continuation of the Company to shareholders every five years. At the 2023 AGM the shareholders voted in favour of the continuation of the Company. The next continuation vote will be proposed at the 2028 AGM. SHARE CAPITAL AND SUBSTANTIAL SHARE INTERESTS As at 31 March 2024, 505,099,478 Ordinary Shares were in issue (31 March 2023: 481,399,478) and no other classes of shares were in issue at the respective 2023 and 2024 year ends. No shares are held in treasury. The total number of voting rights in the Company as at 12 July is 505,099,478. Subject to company law and the Articles, the Directors are authorised to issue shares of such number of tranches and on such terms as they determine, provided that such terms are consistent with the provision of the Articles. No person holds securities in the Company carrying special rights with regards to control of the Company. Details of changes to the Company’s share capital during the year under review are given in note 20 to the accounts on page 83. All shares in issue rank equally with respect to voting, dividends and any distribution on winding up. There are no restrictions on votingrights. As at 31 March 2024, the Company had received notifications in accordance with the FCA’s Disclosure Guidance and Transparency Rule 5.1.2R of the below interests in 3% or more of the voting rights attaching to the Company’s issued share capital. Shareholder Ordinary shares Total voting rights (%) Rathbone Investment Management Limited 54,242,711 10.94 Hargreaves Lansdown Nominees Limited 22,048,703 6.39 EFG Harris Allday 18,975,028 5.50 Interactive Investor Services Nominee Limited 16,528,086 4.79 Charles Stanley 12,682,956 3.68 Momentum Global Investment Management 12,389,177 3.59 AJ Bell 11,677,367 3.38 First Avenue Capital 11,658,249 3.38 Redmayne Bentley 10,972,508 3.18 Following the year end, Rathbones Investment Management Limited notified the Company its holding of 50,484,312 shares represented 9.99% of the Company’s total voting rights. MEETINGS AND ATTENDANCE The Board meets formally on a quarterly basis. The table below details the meetings held during the financial year and Directors’ attendance. In addition, there were ten ad hoc board meetings held during the year, attended by those Directors available at the time. All Directors attended the AGM. Director Board Audit Committee Remuneration and Nomination Management Engagement Pat Cox 5/5 5/5 2/2 2/2 Caroline Banszky 5/5 5/5 2/2 2/2 Max King 5/5 5/5 2/2 2/2 Tom Murley 5/5 5/5 2/2 2/2 Lisa Scenna 4/4 5/5 1/1 1/1 appointed 1 May 2023 and so was not present for the April 2023 quarterly board, RNC and MEC meetings. The forth quarterly board meeting of the year ended 31 March 2023 was held in April2023, as were the RNC and MEC meetings, so exceptionally, there were five quarterly meetings and two scheduled RNS and MEC meetings during the year. DISCLOSURE OF INFORMATION TO AUDITOR The Directors confirm that, as at the date of this report, they have taken all the steps that they ought to have taken to make themselves aware of any information needed by the auditor for the purposes of the audit, and to establish that the auditor is aware of that information. The Directors are not aware of any relevant audit information of which the auditor is unaware. Governance 50 Gore Street Energy Storage Fund plc DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE AND INDEMNITIES Directors’ and officers’ liability insurance cover was in place for the Directors throughout the year. The Company’s articles of association provide, subject to the provisions of legislation, an indemnity for Directors in respect of costs which they may incur relating to the defence of any proceedings brought against them arising out of their positions as Directors, in which they are acquitted or judgment is given in their favour by the court. This is a qualifying third party indemnity policy and was in place throughout the year under review for each Director and to the date of this report. By order of the Board Gore Street Services Limited Company Secretary 12 July 2024 Governance Annual Report for year ended 31 March 2024 51 Audit Committee Report Scope The committee is responsible for monitoring the integrity of financial reporting, quality and effectiveness of external audit, risk management and the system of internal control. The committee reports and makes recommendations to the Board after each meeting. Its terms of reference are available on the Company’s website. All Directors are members of the committee and Caroline Banszky is its chair. The Board has satisfied itself that at least one of the committee’s members has recent and relevant financial experience and that the committee as a whole has competence relevant to the sector in which the company operates. During the year, the committee agreed that it would be meeting at least four times per year, to consider the annual and interim reports and the unaudited quarterly NAVs. During the year it met five times. Its effectiveness was assessed as part of the Board evaluation. The committee’s terms of reference were reviewed during the year. Approach FINANCIAL REPORTS AND VALUATION Monitoring the integrity of the financial statements of the Company and any formal announcements relating to the Company’s financial performance and reviewing significant financial reporting judgements contained in them. Reporting to the Board on the appropriateness of the Board’s accounting policies and practices including critical judgement areas and going concern and the viability statements. Reviewing the valuation of the Company’s investments prepared by the Investment Manager and their underlying assumptions, and review of the work of the independent valuer BDO LLP biannually prior to making a recommendation to the Board on the valuation of the Company’s investments. AUDIT Meeting regularly with the Auditor to review their proposed audit plan and the subsequent audit report, including review of any significant issues in relation to the financial statements, Assessment of the effectiveness of the audit process and the levels of fees paid in respect of both audit and non-audit work. Making recommendations to the Board in relation to the appointment, re-appointment, or removal of the Auditor, and approving their remuneration and the terms of their engagement. Monitoring and reviewing annually the Auditor’s independence, objectivity, expertise, resources, qualification, and non-auditwork. RISK AND INTERNAL CONTROLS Reviewing the effectiveness of the accounting and internal control systems of the Company and considering annually whether there is a need for the Company to have its own internal audit function. Undertaking a robust assessment of the Company’s principal and emerging risks and uncertainties, and reviewing how they are being managed and mitigated, as well as reviewing the procedures in place to identify, assess and monitor risk. The committee’s work during the year FINANCIAL REPORTS AND VALUATION Calculation of the investment management fee and performance fee Consideration of methodology used to calculate the fees, matched against the criteria set out in the AIFM agreement. Overall accuracy of the annual report and accounts Consideration of the draft annual report and accounts and the letters from the Investment Manager and Administrator in support of the letter of representation to the auditor. Assessment of the Carrying Value of Investments and quarterly NAVs The Company’s accounting policy is to designate investments at fair value. As a consequence, the Committee reviewed valuation policies processes and application. The most influential area of judgement in the financial statements relates to the valuation of these investments. The key estimates and assumptions include the useful life of the assets, revenue estimates, the discount factors utilised, the rate of inflation, and the price at which the power and associated benefits can be sold. In particular, the committee challenged the appropriateness of the discount rate used and carefully considered the impact of the macro-economic and industry related factors on income recognition and associated assumptions in relation to the valuation of the assets that have been included in the 31 March 2024 valuation. The Company engages BDO as independent valuation advisors to help the committee form a view as to the reasonableness of the valuations. The uncertainty involved in determining the fair value of investment valuations represents a significant risk in the Company’s financial statements. An inherent risk of management override is present as the Investment Manager’s fee is calculated based on NAV (as disclosed in the financial statements). The Investment Manager is responsible for calculating the NAV with the assistance of the Administrator, prior to approval by the Board. On a quarterly basis, the Investment Manager provides a detailed analysis of the NAV. This analysis highlights any movements and assumption alterations to the NAV of the previous quarter. NAV movements and the principles behind changes in assumptions are considered and challenged by committee and subsequently approved by the Board. Governance 52 Gore Street Energy Storage Fund plc The committee is satisfied that the key estimates and assumptions used within the valuation model are appropriate and that the investments have been fairly valued. Fair, balanced and understandable Reviewed the annual report and accounts to ensure that it was fair, balanced and understandable. Going concern and viability Reviewing the impact of risks on going concern and longer-term viability. Recommendations to the Board As a result of the work performed, the committee has concluded that the annual report for the year ended 31 March 2024, Taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position, performance, business model and strategy, and has reported on these findings to the Board. The Board’s conclusions in this respect are set out in the Statement of Directors’ Responsibilities on page 57. AUDIT Effectiveness of the independent audit process and auditor performance Evaluated the effectiveness of the independent audit firm and process prior to making a recommendation that it should be re-appointed at the forthcoming AGM. Evaluated the auditor’s performance against agreed criteria including: qualification; knowledge, expertise and resources; independence policies; effectiveness of audit planning; adherence to auditing standards; and overall competence was considered, alongside feedback from the Investment Manager and Administrator on the audit process. The committee noted the auditor had demonstrated its professional scepticism during the audit. The committee was satisfied with the auditor’s replies. Auditor independence Ernst & Young LLP has provided audit services to the Company since it was appointed on 19 September 2019. The auditors are required to rotate the senior statutory auditor every five years. Ahmer Huda was appointed the senior statutory auditor and conducted the audit of the Company’s financial statements. There were no contractual obligations that restricted the choice of external auditors. Audit results Met with and reviewed a comprehensive report from the auditor which detailed the results of the audit, compliance with regulatory requirements, safeguards that have been established, and on their own internal quality control procedures. Meetings with the auditor Met the auditor without representatives of the Investment Manager or Administrator present. Representatives of the auditor attended the committee meeting at which the draft annual report and accounts were considered. Provision of non-audit services by the auditor The committee has reviewed the FRC’s Guidance on Audit Committees and has formulated a policy on the provision of non-audit services by the Company’s auditor. The committee has determined that the Company’s appointed auditor will not be considered for the provision of certain non-audit services, such as accounting and preparation of the financial statements, internal audit and custody. The auditor may, if required, provide other non-audit services which will be judged on a case-by-case basis. During the year, the only non- audit service provided by EY was their review of the half year accounts/financial statements. The committee was satisfied that the provision of these non-audit services did not threaten the auditors’ independence. Consent to continue as auditor Ernst & Young LLP indicated to the committee their willingness to continue to act as auditor. Recommendations to the Board Having reviewed the performance of the auditors as described above, the committee considered it appropriate to recommend the firm’s re-appointment. Resolutions to re-appoint Ernst & YoungLLP as auditor to the Company, and to authorise the Directors to determine their remuneration will be proposed at the AGM. RISK AND INTERNAL CONTROLS Service provider controls Reviewing the operational controls maintained by the Investment Manager, Administrator, Depositary and Registrar. Internal controls and risk management Consideration of several key aspects of internal control and risk management operating within the Manager, depositary and registrar, including assurance reports. Compliance with the investment trust qualifying rules in S1158 of the Corporation Tax Act 2010 Consideration of the Administrator’s report confirming compliance. Principal risks Reviewing the principal risks faced by the Company and the risk matrix describing how they are managed or mitigated, as described in the Strategic Report. Emerging risks Reviewing the emerging risks for the Company. Recommendations to the Board The Company is an investment trust with outsourced service providers who report annually on their internal controls. The committee therefore agreed an internal audit function was not required. The committee’s assessment of internal controls and risks and recommendation to the Board is set out on page 42 in the Strategic Report. Caroline Banszky Chair of the Audit Committee 12 July 2024 Governance Annual Report for year ended 31 March 2024 53 Management Engagement Committee Report Scope The management engagement committee is responsible for (1) the monitoring and oversight of the Investment Manager’s performance and fees, and confirming the Investment Manager’s ongoing suitability, and (2) reviewing and assessing the Company’s other service providers, including reviewing their fees. All Directors are members of the committee and Pat Cox is its chair. Its terms of reference reviewed and updated and are available on the Company’s website. Approach OVERSIGHT OF THE INVESTMENT MANAGER The committee • reviews the Investment Manager’s performance, over the short and long term, against the peer group and the market. • considers the reporting it has received from the Investment Manager throughout the year, and the reporting from the Investment Manager to the shareholders. • assesses management fees on an absolute and relative basis, receiving input from the Company’s brokers, including peer group and industry figures, as well as the structure of the fees. • reviews the appropriateness of the Investment Manager’s contract, including terms such as notice period. • assesses whether the Company receives appropriate administrative, accounting, company secretarial and marketing support from the Investment Manager. OVERSIGHT OF OTHER SERVICE PROVIDERS The committee reviews the performance and competitiveness of the Company’s service providers on at least an annual basis, including the Commercial Manager, Depositary, Brokers, Registrar, Company Secretary and Administrator. The committee also receives a report from the Company Secretary on ancillary service providers and considers any recommendations. The committee notes the audit committee’s review of the auditor. The committee’s work during the year The committee undertook a detailed review of the Investment Manager’s performance and agreed that it has the appropriate depth and quality of resource to deliver superior returns over the longer term. The committee reviewed the management fees and agreed they were appropriate. The committee reviewed the other services provided by the Investment Manager and agreed they were satisfactory. The annual review of each of the service providers was satisfactory. The committee noted that the audit committee had undertaken a detailed evaluation of the Manager’s, registrar’s and depositary’s internal controls. Based on its assessment, the committee recommended, and the Board agreed that the ongoing appointment of the Investment Manager on the terms of the AIFM agreement was in the best interests of shareholders as a whole. The recommendations that the Company’s service providers’ performance remained satisfactory and that the fees paid to the Investment Manager and other service providers remained appropriate and in line with the market were both also approved by the Board. Pat Cox Chair of the Management Engagement Committee 12 July 2024 Governance 54 Gore Street Energy Storage Fund plc Scope The committee is responsible for the recruitment, selection and induction of Directors, their assessment during their tenure, and the Board’s succession. It is also responsible for reviewing Directors’ fees. Based on its review it makes recommendations to the Board. All Directors are members of the committee and Tom Murley is its chair. Its terms of reference are available on the Company’s website. Approach RECRUITMENT The committee prepares a job specification for each role, and an independent recruitment firm is appointed. For the Chair and the chairs of committees, the committee considers current Board members too. A job specification outlines the knowledge, professional skills, personal qualities and experience requirements. Potential candidates are assessed against the Company’s diversity policy. The committee discusses the long list, invites a number of candidates for interview and makes a recommendation to theBoard. The committee reviews the induction of new Directors. EVALUATION The committee assesses each Director annually, and may use an external Board evaluator every three years. The evaluation focuses on whether each Director continues to demonstrate commitment to their role and provides a valuable contribution to the Board during the year, taking into account time commitment, independence, conflicts and training needs. Following the evaluation, the committee provides a recommendation to shareholders with respect to the annual re-election of Directors at the AGM. All Directors retire at the AGM and their re-election is subject to shareholder approval. SUCCESSION The Board’s succession policy is that Directors’ tenure will be for no longer than nine years, except in exceptional circumstances and that each Director will be subject to annual re-election at theAGM. The committee reviews the Board’s current and future needs at least annually. Should any need be identified the committee will initiate the selection process. The committee oversees the handover process for retiring Directors. REMUNERATION The committee reviews Directors’ fees, taking into account comparative data and reports to shareholders. No Directors are involved in making recommendations with respect to their own remuneration. Any proposed changes to the remuneration policy for Directors is discussed and reported to shareholders. The committee’s work during the year RECRUITMENT The committee ensured that Ms Scenna received a comprehensive induction process following her appointment in May 2023. EVALUATION The board, committees, directors and chair evaluation was held in November and December 2023, by the Chair, audit committee chair and Company Secretary. The recommendations implemented included a renewed focus on strategy in light of the evolving markets the Company operated in, and agreeing the succession planning arrangements for the original directors appointed at IPO. The committee also reviewed each Director’s time commitment and independence by reviewing a complete list of appointments, including pro bono not for profit roles, to ensure that each Director remained free from conflict and had sufficient time available to discharge each of their duties effectively. AllDirectors were considered to be independent in character and judgement. The committee considered each Director’s contributions, and noted that in addition to extensive experience as professionals and non-executive Directors, each Director had valuable skills and experience, as detailed in their biographies on pages 45 and 46. Based on its assessment, the committee recommended, and the Board approved, the recommendations for each Director’s re-election. SUCCESSION The committee agreed that the succession policy remained appropriate. Noting that the four Directors appointed at IPO would need to retire by the same date, the committee agreed that it would be appropriate to stagger their retirements dates and have two directors retire earlier than the full nine-year term. Thecommittee agreed that one Director would retire at the AGMs in 2025, 2026, and 2027. The committee agreed that in the circumstances it was appropriate that the Chair stay on the Board for up to ten years. The committee also agreed that the Company should aim to appoint another Director in 2025, 2027 and 2028. The Directors remain committed to meeting Board diversity targets Remuneration and Nomination Committee Report Governance Annual Report for year ended 31 March 2024 55 as set out in the Listing Rules and the recruitment agencies being considered are provided with the Board’s diversity policy. REMUNERATION The committee reviewed Directors’ fees, using external benchmarking, and recommended an increase in Directors’ fees, as detailed in the remuneration report. Tom Murley Chair of the Remuneration and Nomination Committee 12 July 2024 Directors’ Remuneration Report Introduction The following remuneration policy is currently in force and is subject to a binding vote every three years. The next vote will take place in 2025 and the current policy provisions will apply until that date. An ordinary resolution to approve the Directors’ remuneration policy will be put to shareholders at the forthcoming AGM (no changes are proposed). The below Directors’ annual report on remuneration is subject to an annual advisory vote. An ordinary resolution to approve this report will be put to shareholders at the forthcoming AGM. At the AGM held on 20 September 2022, 99.86% of the votes cast (including votes cast at the Chairman’s discretion) in respect of approval of the remuneration policy were in favour, while 0.14% were against and 255,185 votes were withheld. At the AGM held on 21 September 2023, 99.57% of the votes cast (including votes cast at the Chairman’s discretion) in respect of approval of the report on remuneration for the year ended 31 March 2023 were in favour, while 0.43% were against and 447,815 votes were withheld. Directors’ remuneration policy The Company’s policy is to determine the level of Directors’ fees with due regard to the experience of the Board as a whole, the time commitment required, and to be fair and comparable to non-executive Directors of similar companies. The Company may also periodically choose to benchmark Directors’ fees with an independent review to ensure they remain fair and reasonable. Directors’ fees will be adjusted from time to time and will be subject to shareholder approval in the subsequent AGM. The Directors may elect to apply the cash amount equal to their annual fee to subscribe for, or to purchase, Ordinary Shares. The Directors are entitled only to their annual fee and their reasonable expenses. No element of the Directors’ remuneration is performance related, nor does any Director have any entitlement to pensions, share options or any long-term incentive plans from the Company. The Directors hold their office in accordance with the Articles of Association and their appointment letters. No Director has a service contract with the Company, nor are any such contracts proposed. The Directors’ appointments can be terminated in accordance with the Articles of Association and without compensation. Under the Company’s Articles of Association, allDirectors are entitled to remuneration determined from time to time by the Board and approved by shareholders. Application of the Directors’ remuneration policy The Board did not seek the views of shareholders in setting this remuneration policy. Any comments on the policy received from shareholders would be considered on a case-by-case basis. As the Company does not have any employees, no employee pay and employment conditions were taken into account when setting this remuneration policy and no employees were consulted in its construction. The Directors did not receive any shareholder feedback on the policy. Directors’ fees are reviewed annually and take into account research from third parties on the fee levels of Directors of peer group companies, as well as industry norms and factors affecting the time commitment expected of the Directors. New Directors are subject to the provisions set out in this remuneration policy. Directors’ annual report on remuneration This report explains how the Directors’ remuneration policy was implemented during the year ended 31 March 2024. Directors’ remuneration was last reviewed by the remuneration and nomination committee and the Board in March 2024. Themembers of the committee at the time that remuneration levels were considered were all the Directors. Although no external advice was sought in considering the levels of Directors’ fees, information on fees paid to Directors of peer group companies provided by the Secretary and Corporate Broker was taken into consideration, as was independent third-party research. Following this review, the committee recommended, and the Board agreed, that Directors’ fees should be increased by £2,000, with effect from 1 April 2024, to align with the new financial year. As a result, all non-executive Directors will be paid £49,000 per annum. The Chair receives an additional £30,000 and the audit chair an additional £10,000. Fees were last increased with effect from 1 April 2023. Governance 56 Gore Street Energy Storage Fund plc Fees paid to Directors The following amounts were paid by the Company to Directors for their services in respect of the year ended 31 March 2024 and the preceding financial year. Directors’ remuneration is all fixed; they do not receive any variable remuneration. The performance of the Company over the financial year is presented on page 1, under the heading “Key Metrics”. Directors’ Fees Change in annual fee over years ended 31 March Director 2024 £ 2023 £ 2024 % 2023 % 2022 % 2021 % Patrick Cox (Chair) 77,000 70,625 9.08 22.83 32.53 31.48 Caroline Banszky 57,000 52,500 8.57 16.67 44.92 47.86 Malcolm King 47,000 43,750 7.43 9.38 49.62 48.52 Thomas Murley 47,000 43,750 7.43 9.83 49.62 48.52 Lisa Scenna 1 43,083 – – – – – Total 271,083 210,625 – – – – 1 Appointed as a Director on 1 May 2023 The information in the table above has been audited. EXPENDITURE BY THE COMPANY ON REMUNERATION AND DISTRIBUTIONS TO SHAREHOLDERS The difference in actual spend between 31 March 2024 and 31 March 2023 on Directors’ remuneration in comparison to distributions (dividends and share buybacks) and other significant spending are set out in the table below: Payments made during the year ended 31 March 2024 Payments made during the year ended 31 March 2023 Directors’ total remuneration £271,083 £210,625 Dividends paid £36,384,962 £30,970,693 Buy back of Ordinary Shares – – SHARE PRICE AND REFERENCE INDEX PERFORMANCE SINCE IPO 0 20 40 60 80 100 120 140 Mar 2024Mar 2023Mar 2022Mar 2021Mar 2020Mar 2019Jun 2018 Reference Index Total ReturnShare Price Total Return Reference Index is FTSE All-Share. Source: London Stock Exchange. Rebased to 100 as at 29 June 2018. Definitions of terms and Alternative Performance Measures are provided on page 101. DIRECTORS’ SHARE INTERESTS The Company’s articles of association do not require Directors to own shares in the Company. The interests of Directors, including those of connected persons, at the beginning and end of the financial year under review are set out below. Ordinary Shares of 1p each held Director 31 March 2024 31 March 2023 Patrick Cox (Chair) 246,496 246,496 Caroline Banszky 60,000 50,000 Malcolm King 50,000 50,000 Thomas Murley 75,000 0 Lisa Scenna 1 35,000 - 1 Appointed as a Director on 1 May 2023. The information in the table above has been audited. Gore Street Capital Limited Directors and employees hold approximately 3.876 million shares in the Company. By order of the Board Gore Street Services Limited Company Secretary 12 July 2024 Governance Annual Report for year ended 31 March 2024 57 The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial period. Under that law the Directors are required to prepare the Company financial statements, in accordance with UK adopted international accounting standards. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss for the Company for that period. In preparing these financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and accounting estimates that are reasonable and prudent; • state whether they have been prepared in accordance with UK adopted international accounting standards, subject to any material departures disclosed and explained in the financial statements; • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and • prepare a Report of the Directors, a Strategic Report and Directors’ Remuneration Report which comply with the requirements of the Companies Act 2006. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. Financial statements are published on the Company’s website in accordance with legislation in the UK governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website www.gsenergystoragefund.com is the responsibility of the Directors. The Directors’ responsibilities also extend to the ongoing integrity of the financial statements contained therein. The Directors confirm that to the best of their knowledge: • the Annual Report, taken as a whole, is fair, balanced, and understandable and provides the information necessary for shareholders to assess the Company’s performance, business model and strategy; • the Company’s financial statements have been prepared in accordance with UK adopted international accounting standards and give a true and fair view of the assets, liabilities, financial position and net return of the Company;and • the Annual Report includes a fair review of the development and performance of the business and the financial position of the Company, together with a description of the principal and emerging risks and uncertainties that it faces. On behalf of the Board Pat Cox Chair 12 July 2024 Statement of Directors’ Responsibilities in respect of the preparation of the Annual Financial Report 58 Gore Street Energy Storage Fund plc Financial Statements Annual Report for year ended 31 March 2024 59 Independent Auditor’s Report Independent Auditor’s Report Independent Auditor’s report to the members of Gore Street Energy Storage Fund Plc Opinion We have audited the financial statements of Gore Street Energy Storage Fund Plc for the year ended 31 March 2024 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes 1 to 24, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards. In our opinion, the financial statements: • give a true and fair view of the Company’s affairs as at 31March 2024 and of its loss for the year then ended; • have been properly prepared in accordance with UK adopted international accounting standards; and • have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain independent of the Company in conducting the audit. Conclusions relating to going concern In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included the following procedures: • We confirmed our understanding of the Company’s going concern assessment process and engaged with the Company Secretary to determine if all key factors were considered in their assessment. • We inspected the Directors’ assessment of going concern, including the cash flow forecast, for the period to 30September 2025 which is at least 12 months from the date the financial statements were authorised for issue. In preparing the cash flow forecast, the Company has concluded that it is able to continue to meet its ongoing costs as they fall due. • We reviewed the factors and assumptions, including the impact of current economic environment and other significant events that could give rise to market volatility, as applied to the cash flow forecast. We considered the appropriateness of the methods used to calculate the cash flow forecast and determined, through testing of the methodology and calculations, that the methods, inputs and assumptions utilised were appropriate to be able to make an assessment for the Company. We also reviewed the Company’s assessment of the investment portfolio under stressed market conditions and determined the impact of sensitivities on the going concern assessment. • We confirmed through discussion with the Investment Manager and the Directors that there was no utilisation of debt facilities. We corroborated these statements during our audit procedures by reviewing bank statements for unrecorded liabilities and review of contracts and agreements and noted that there were no material commitments for the Company as at 31 March 2024. • We reviewed the Company’s going concern disclosures included in the annual report in order to assess whether the disclosures were appropriate and in conformity with the applicable reporting standards. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period assessed by the Directors, being the period to 30 September 2025, which is at least 12 months from when the financial statements are authorised for issue. 60 Gore Street Energy Storage Fund plc Independent Auditor’s Report In relation to the Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern. Overview of our audit approach Key audit matters • Risk of inaccurate valuation of investments Materiality • Overall materiality of £5.41m (2023: £5.56m) which represents 1% (2023: 1%) of shareholders equity. An overview of the scope of our audit TAILORING THE SCOPE Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for the Company. This enables us to form an opinion on the financial statements. We take into account size, risk profile, the organisation of the Company and effectiveness of controls, the potential impact of climate change and changes in the business environment when assessing the level of work to be performed. All audit work was performed directly by the audit engagement team which includes our valuation specialists. CLIMATE CHANGE Stakeholders are increasingly interested in how climate change will impact companies. The Company has determined that the most significant future impacts from climate change on its operations will be from how climate change could affect the Company’s investments and overall investment process. This is explained in the principal risk and uncertainties section on page40. This disclosure forms part of the “Other information,” rather than the audited financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on “Other information”. Our audit effort in considering climate change was focused on the adequacy of the Company’s disclosures in the financial statements as set out in note 2 and conclusion that climate risk does not materially impact the estimates and assumptions used in determining the fair value of the investments. We also challenged the Directors’ considerations of climate change in their assessment of viability and associated disclosures. KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters. Annual Report for year ended 31 March 2024 61 Independent Auditor’s Report Risk Our response to the risk Key observations communicated to the Audit Committee Inaccurate valuation of investments Refer to the Audit Committee Report (page 51); Accounting policies (Note 5 on page 71); and Note 12 and 17 of the Financial Statements (pages 76 and 79). The valuation of the investment portfolio as at 31 March 2024 was £481.66 million (2023: £434.76 million) consisting of the Company’s investments in battery storage assets through its wholly owned subsidiary, GSES1 Limited and its subsidiaries. The Company meets the definition of an ‘investment entity’ in accordance with IFRS 10, thus it values its investment in its subsidiary at fair value through profit orloss. The accurate valuation of investments is fundamental to the Company’s financial performance. The return generated by the investment portfolio is a key driver of the Company’s returns. Due to the nature of the investment portfolio, being unlisted investments with no directly comparable listed investments, the underlying assumptions that drive the value of the asset are subjective. As a result, the valuation of the portfolio is susceptible to misstatement through management override. The investment valuation approach requires sufficient rigour to eliminate the susceptibility of the investment valuations tobias. The valuation principles used are based on International Valuation Standards Council (“IVSC”) valuation guidelines, using a discounted cash flow (“DCF”) methodology. We performed the following procedures: Obtained an understanding of the Investment Manager and Directors’ processes and controls surrounding investment valuations, by performing walkthrough procedures to evaluate the design and implementation of controls. Obtained and reviewed the valuation models of each asset held via the Company’s investment in GSES1 Limited and its subsidiaries, to validate that the valuation methodology adopted is consistent with the requirements of UK adopted international accounting standards and IVSC guidelines. Corroborated key revenue streams and other valuation model inputs to supporting contracts and external pricing forecasts, as applicable. For a selected sample of investments, engaged EY valuation specialists to assist in challenging the appropriateness of the discount rate used and to assess the impact of macro- economic and industry related factors used in calculating the net present value of the future cash flows. For the remainder of the investments, we ensured that consistent valuation methodology was applied and challenged the key estimates used in determining the fair value of the investments. Performed back testing of model inputs by comparing prior year revenue and expense projections to current year actuals, to assess reasonableness of projections. Held discussions with the Investment Manager to understand the key drivers to the cash flow projections included in the valuation models and assessed their appropriateness based on the nature of the asset and our understanding of the relevant markets. Checked the clerical accuracy of the valuation models. Our audit procedures did not identify any material misstatements regarding the risk of incorrect valuation of investments. There have been no changes to the areas of audit focus raised in the above risk table from the prior year. Our application of materiality We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion. Materiality The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures. We determined materiality for the Company to be £5.41 million (2023: £5.56 million), which is 1% (2023: 1%) of shareholders equity. We believe that shareholders equity are the most important financial metric on which shareholders would judge the performance of the Company. Performance materiality The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality. On the basis of our risk assessments, together with our assessment of the Company’s overall control environment, our judgement was that performance materiality was 75% (2023: 75%) of our planning materiality, namely £4.06m (2023: £4.17m). We have set performance materiality at this percentage due to our past experience of the audit that indicates that a lower risk of misstatements, both corrected and uncorrected. Reporting threshold An amount below which identified misstatements are considered as being clearly trivial. We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £0.27m (2023: £0.28m), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. 62 Gore Street Energy Storage Fund plc Independent Auditor’s Report We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion the part of the Directors’ Remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: • the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the Strategic Report and Directors’ Report have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or Directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or • the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or • certain disclosures of Directors’ Remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Corporate Governance Statement We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our review by the Listing Rules Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit: • Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 43; • Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate set out on page 43; • Director’s statement on whether it has a reasonable expectation that the Company will be able to continue in operation and meets its liabilities set out on page 43; • Directors’ statement on fair, balanced and understandable set out on page 57; • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 40; • The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 42; and; • The section describing the work of the audit committee set out on page 51. Responsibilities of directors As explained more fully in the Directors’ responsibilities statement set out on page 57, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Annual Report for year ended 31 March 2024 63 Independent Auditor’s Report Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the company and management. • We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the reporting framework (UK adopted international accounting standards, the Companies Act 2006, UK Corporate Governance Code, AIC Code of Corporate Governance and The Companies (Miscellaneous Reporting) Regulations 2018) and Section 1158 of the Corporation Tax Act 2010. • We understood how the Company is complying with those frameworks by making enquiries of the Investment Manager, Company Secretary, and also the Directors including the Chair of the Audit Committee. We corroborated our understanding through our review of board minutes, papers provided to the Audit Committee and correspondence received from regulatory bodies. • We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by considering the key risks impacting the financial statement. We identified fraud risks in relation to estimation uncertainty relating to the valuation of investments. Our audit procedures stated above in the ‘Key audit matters section’ of this Auditor’s report were performed to address the fraud risk. • Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved review of the Company Secretary’s reporting to the Directors with respect to the application of the documented policies and procedures, and review of the financial statements to ensure compliance with the reporting requirements of the Company. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Other matters we are required to address • Following the recommendation from the audit committee, we were appointed by the Company on 19 September 2018 to audit the financial statements for the year ending 31March 2019 and subsequent financial periods. • The period of total uninterrupted engagement including previous renewals and reappointments is six years, covering the years ending 31 March 2019 to 31 March 2024. • The audit opinion is consistent with the additional report to the audit committee. Use of our report This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Ahmer Huda (Senior statutory auditor) for and on behalf of Ernst & Young LLP, Statutory Auditor London 12 July 2024 Financial Statements 64 Gore Street Energy Storage Fund plc Year Ended 31 March 2024 Year Ended 31 March 2023 Notes Revenue (£) Capital (£) Total (£) Revenue (£) Capital (£) Total (£) Net (loss)/gain on investments at fair value through profit and loss 7 – (30,041,779) (30,041,779) – 60,826,822 60,826,822 Investment income 8 32,298,791 – 32,298,791 12,466,909 – 12,466,909 Other income 10,355 – 10,355 – – – Total income 32,309,146 (30,041,779) 2,267,367 12,466,909 60,826,822 73,293,731 Administrative and other expenses 9 (7,925,906) – (7,925,906) (9,881,436) – (9,881,436) (Loss)/profit before tax 24,383,240 (30,041,779) (5,658,539) 2,585,473 60,826,822 63,412,295 Taxation 10 – – – – – – (Loss)/profit after tax and (loss)/profit for the year 24,383,240 (30,041,779) (5,658,539) 2,585,473 60,826,822 63,412,295 Total comprehensive (loss)/income for the year 24,383,240 (30,041,779) (5,658,539) 2,585,473 60,826,822 63,412,295 (Loss)/profit per share (basic and diluted) – pence per share 11 5.02 (6.19) (1.10) 0.55 12.76 13.31 All Revenue and Capital items in the above statement are derived from continuing operations. The Total column of this statement represents the Company’s Income Statement prepared in accordance with UK adopted IAS. The (loss)/profit after tax and (loss)/profit for the year is the total comprehensive income and therefore no additional statement of other comprehensive income is presented. The supplementary revenue and capital columns are presented for information purposes in accordance with the Statement of Recommended Practice issue by the Association of Investment Companies. The notes on pages 69 to 85 form an integral part of these financial statements. Statement of Comprehensive Income For the Year Ended 31 March 2024 Financial Statements Annual Report for year ended 31 March 2024 65 Statement of Financial Position As at 31 March 2024 Company Number 11160422 Notes 31 March 2024 (£) 31 March 2023 (£) Non – Current Assets Investments at fair value through profit or loss 12 481,659,515 434,762,146 481,659,515 434,762,146 Current assets Cash and cash equivalents 13 60,667,572 123,705,727 Trade and other receivables 14 519,853 843,825 61,187,425 124,549,552 Total assets 542,846,940 559,311,698 Current liabilities Trade and other payables 15 2,150,447 3,046,853 2,150,447 3,046,853 Total net assets 540,696,493 556,264,845 Shareholders equity Share capital 20 5,050,995 4,813,995 Share premium 20 331,302,899 315,686,634 Special reserve 20 – 349,856 Merger reserve 20 10,621,884 – Capital reduction reserve 20 75,089,894 111,125,000 Capital reserve 20 95,542,635 125,584,414 Revenue reserve 20 23,088,186 (1,295,054) Total shareholders equity 540,696,493 556,264,845 Net asset value per share 19 1.07 1.16 The annual financial statements were approved and authorised for issue by the Board of directors and are signed on its behalf by: Patrick Cox Chair 12 July 2024 The notes on pages 69 to 85 form an integral part of these financial statements. Financial Statements 66 Gore Street Energy Storage Fund plc Statement of Changes in Equity For the Year Ended 31 March 2024 Share capital (£) Share premium reserve (£) Special reserve (£) Merger reserve (£) Capital reduction reserve (£) Capital reserve (£) Revenue reserve (£) Total shareholders’ equity (£) As at 1 April 2023 4,813,995 315,686,634 349,856 – 111,125,000 125,584,414 (1,295,054) 556,264,845 Loss for the year – – – – – (30,041,779) 24,383,240 (5,658,539) Total comprehensive loss for the year – – – – – (30,041,779) 24,383,240 (5,658,539) Transactions with owners Ordinary Shares issued at a premium during the year 237,000 15,666,000 – 10,670,000 – – – 26,573,000 Share issue costs – (49,735) – (48,116) – – – (97,851) Movement in special reserve – – (349,856) – 349,856 – – – Dividends paid – – – – (36,384,962) – – (36,384,962) As at 31 March 2024 5,050,995 331,302,899 – 10,621,884 75,089,894 95,542,635 23,088,186 540,696,493 Capital reduction reserve and revenue reserves are available to the Company for distributions to Shareholders as determined by the Directors. The notes on pages 69 to 85 form an integral part of these financial statements. Financial Statements Annual Report for year ended 31 March 2024 67 Statement of Changes in Equity For the Year Ended 31 March 2023 Share capital (£) Share premium reserve (£) Special reserve (£) Capital reduction reserve (£) Capital reserve (£) Revenue reserve (£) Total shareholders equity (£) As at 1 April 2022 3,450,358 269,708,123 186,656 42,258,892 64,757,592 (3,880,527) 376,481,094 Profit for the year – – – – 60,826,822 2,585,473 63,412,295 Total comprehensive profit for the year – – – – 60,826,822 2,585,473 63,412,295 Transactions with owners Ordinary Shares issued at a premium during the year 1,363,637 148,636,363 – – – – 150,000,000 Share issue costs – (2,657,852) – – – – (2,657,852) Transfer to capital reduction reserve – (100,000,000) – 100,000,000 – – – Movement in special reserve – 163,200 (163,200) – – – Dividends paid – – – (30,970,692) – – (30,970,692) As at 31 March 2023 4,813,995 315,686,634 349,856 111,125,000 125,584,414 (1,295,054) 556,264,845 Capital reduction reserve and revenue reserves are available to the Company for distributions to Shareholders as determined by the Directors. The notes on pages 69 to 85 form an integral part of these financial statements. Financial Statements 68 Gore Street Energy Storage Fund plc Statement of Cash Flows For the Year Ended 31 March 2024 Notes Year Ended 31 March 2024 (£) Year Ended 31 March 2023 (£) Cash flows generated from operating activities (Loss)/profit for the year (5,658,539) 63,412,295 Net loss/(profit) on investments at fair value through profit and loss 30,041,779 (60,826,822) Decrease/(increase) in trade and other receivables 323,973 (797,348) (Decrease)/increase in trade and other payables (896,407) 671,610 Net cash generated from operating activities 23,810,806 2,459,735 Cash flows used in investing activities Funding of investments (69,850,873) (225,765,788) Loan principal repayment from investment 3,678,725 32,592,883 Net cash used in investing activities (66,172,148) (193,172,905) Cash flows used in financing activities Proceeds from issue of Ordinary Shares at a premium 15,806,000 150,000,000 Share issue costs (97,851) (2,657,852) Dividends paid (36,384,962) (30,970,691) Net cash (outflow)/inflow from financing activities (20,676,813) 116,371,457 Net decrease in cash and cash equivalents for the year (63,038,155) (74,341,713) Cash and cash equivalents at the beginning of the year 123,705,727 198,047,440 Cash and cash equivalents at the end of the year 60,667,572 123,705,727 During the year, interest received by the Company from investments totalled £29,155,404 (2023: £8,835,389) and interest received from bank deposits totalled £3,143,387 (2023: £3,631,520). Total repayments from subsidiaries during the year amounted to £32,834,129 (2023: £41,428,272). The notes on pages 69 to 85 form an integral part of these financial statements. Financial Statements Annual Report for year ended 31 March 2024 69 1. General information Gore Street Energy Storage Fund plc (the “Company”), a public limited company limited by shares was incorporated and registered in England and Wales on 19 January 2018 with registered number 11160422. The registered office of the Company is 16-17 Little Portland Street, First Floor, London, W1W 8BP. Its share capital is denominated in Pound Sterling (GBP) and currently consists of Ordinary Shares. The Company’s principal activity is to invest in a diversified portfolio of utility scale energy storage projects currently located in the UK, the Republic of Ireland, North America and Germany. 2. Basis of preparation STATEMENT OF COMPLIANCE The annual financial statements have been prepared in accordance with UK adopted international accounting standards. The Company has also adopted the Statement of Recommended Practice issued by the Association of Investment Companies which provides guidance on the presentation of supplementary information. The financial statements have been prepared on a historical cost basis except for financial assets and liabilities at fair value through the profit or loss. The Company is an investment entity in accordance with IFRS 10 which holds all its subsidiaries at fair value and therefore prepares unconsolidated accounts only. FUNCTIONAL AND PRESENTATION CURRENCY The currency of the primary economic environment in which the Company operates (the functional currency) is Pound Sterling (“GBPor £”) which is also the presentation currency. GOING CONCERN In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the Financial Reporting Council. After making enquiries and bearing in mind the nature of the Company’s business and assets, the Directors consider the Company to have adequate resources to continue in operational existence over the period to 30 September 2025, being at least 12 months from the date of approval of the financial statements. As such, they have adopted the going concern basis in preparing the annual report and financial statements. The going-concern analysis takes into account expected increases to Investment Adviser’s fee in line with the Company’s NAV and expected increases in operating costs, as well as continued discretionary dividend payments to shareholders at the annual target rate. Consideration has been given to the current macro-economic environment and volatility in the markets. Based on the analysis performed, the Company will continue to be operational and will have excess cash after payment of its liabilities for at least the next 12 months to 30 September 2025. As at 31 March 2024, the Company had net current assets of £59 million and had cash balances of £60.7 million (excluding cash balances within investee companies), which are sufficient to meet current obligations as they fall due. The major cash outflows of the Company are the payment of dividends, costs relating to the acquisition of new assets and further investments in existing portfolio Companies, all of which are discretionary. The Company had no contingencies and significant capital commitments as at the 31 March 2024. The Company is a guarantor to GSES1 Limited’s revolving credit facility with Santander. During the year this facility was upsized from £15 million to £50 million, with an extended term of four years to 2027. The Company had no outstanding debt as at 31 March 2024. The Directors acknowledge their responsibilities in relation to the financial statements for the year ended 31 March 2024 and have prepared the financial statement on a going concern basis. The Company expects to meet its obligations as and when they fall due for at least the next twelve months to 30 September 2025. The board has considered the impact of climate change on the investments included in Company’s financial statements and has assessed that it does not materially impact the estimates and assumptions used in determining the fair value of the investments. OPERATING SEGMENTS Under IFRS 8, particular classes of entities are required to disclose information about any of their individual operating segments. A vast majority of the Company’s portfolio is held through the Company’s direct subsidiary, GSES 1 Limited, except for two new direct investments which do not meet any of the quantitative thresholds to require separate disclosure under IFRS 8. Therefore, the Directors are of the opinion that there is only one segment and therefore no operating segment information is given. Notes to the Financial Statements For the Year Ended 31 March 2024 Financial Statements 70 Gore Street Energy Storage Fund plc 3. Significant accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. During the year the Directors considered the following significant judgements, estimates and assumptions: ASSESSMENT AS AN INVESTMENT ENTITY Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries at fair value through profit or loss rather than consolidate them unless they provided investment-related services to the Company. As such, the Directors are required to make a judgement as to whether the Company continues to meet the definition of an investment entity. To determine this, the Company is required to satisfy the following three criteria: a) the Company obtains funds from one or more investors for the purpose of providing those investors with investment management services; b) the Company commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and c) the Company measures and evaluates the performance of substantially all of its investments on a fair value basis. The Company meets the criteria as follows: • the stated strategy of the Company is to deliver stable returns to shareholders through a mix of energy storage investments; • the Company provides investment management services and has several investors who pool their funds to gain access to infrastructure related investment opportunities that they might not have had access to individually; and • the Company has elected to measure and evaluate the performance of all of its investments on a fair value basis. The fair value method is used to represent the Company’s performance in its communication to the market, including investor presentations. In addition, the Company reports fair value information internally to Directors, who use fair value as the primary measurement attribute to evaluate performance. Having assessed the criteria above and in their judgement, the Directors are of the opinion that the Company has all the typical characteristics of an investment entity and continues to meet the definition in the standard. This conclusion will be reassessed on an annual basis. VALUATION OF INVESTMENTS Significant estimates in the Company’s financial statements include the amounts recorded for the fair value of the investments. By their nature, these estimates and assumptions are subject to measurement uncertainty and the effect on the Company’s financial statements of changes in estimates in future periods could be significant. These estimates are discussed in more detail in note 17. 4. New and revised standards and interpretations NEW AND REVISED STANDARDS AND INTERPRETATIONS The accounting policies used in the preparation of the financial statements have been consistently applied during the year ended 31March 2024. In February 2021, the International Accounting Standards Board issued further amendments to IAS8: Accounting Policies, Changes in Accounting Estimates and Errors. Those amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and correction of errors. They further clarify how entities use measurement techniques and inputs to develop accounting estimates. These amendments are effective for periods beginning on or after 1 January 2023 and having reviewed the amendments, the Board is of the opinion that these amendments do not have a material impact on the Company’s financial statements. In May 2021, the IASB issued amendments to IAS 12: Income Taxes regarding deferred tax relating to Assets and Liabilities arising from a Single Transaction. The amendments introduce an exception to the ‘initial recognition exemption’ for an entity, whereby deferred tax previously did not need to be recognised when, in a transaction that is not a business combination, an entity purchased an asset that would not be deductible for tax purposes (even though there is a difference between the asset’s carrying amount and its tax base). These amendments are effective for periods beginning on or after 1 January 2023 and having reviewed the amendments, the Board is of the opinion that these amendments do not have a material impact on the Company’s financial statements. Financial Statements Annual Report for year ended 31 March 2024 71 4. New and revised standards and interpretations (continued) In February 2021, the IASB issued amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2 requiring that an entity discloses its material accounting policies, instead of its significant accounting policies. Further amendments explain how an entity can identify a material accounting policy with examples of when an accounting policy is likely to be material and also the application of the ‘four-step materiality process’ described in IFRS Practice Statement 2. These amendments are effective for periods beginning on or after 1 January 2023 and having reviewed the amendments, the Board is of the opinion that these amendments do not have a material impact on the Company’s financial statements. There have been no other new standards, amendments to current standards, or new interpretations which the directors feel have a material impact on these financial statements. NEW AND REVISED IFRS IN ISSUE BUT NOT YET EFFECTIVE In January 2020, the International Accounting Standards Board issued amendments to IAS 1: Presentation of Financial Statements to clarify how an entity classifies debt and other financial liabilities as current or non-current. The amendments specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, the amendments require a company to disclose information about these covenants in the notes to the financial statements. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and having reviewed the amendments, the Board is of the opinion that these amendments will not have a material impact on the Company’s financial statements. 5. Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below: INVESTMENT INCOME Interest income is recognised on an accrual basis in the Revenue account of the Statement of Comprehensive Income. Investment income arising from the portfolio assets is recognised on an accruals basis in totality, with amounts received in cash recognised in investment income and the unrealised portion disclosed in net gain on investments at fair value through profit and loss. EXPENSES Expenses are accounted for on an accrual basis and charged to the Statement of Comprehensive Income. Share issue costs are allocated to equity. Expenses are charged through the Revenue account except those which are capital in nature, these include those which are incidental to the acquisition, disposal or enhancement of an investment, which are accounted for through the Capital account. NET GAIN OR LOSS ON INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS Gains or losses arising from changes in the fair value of investments are recognised in the Capital account of the Statement of Comprehensive Income in the period in which they arise. The value of the investments may be increased or reduced by the assessed fair value movement. TAXATION The Company is approved as an Investment Trust Company (“ITC”) under sections 1158 and 1159 of the Corporation Taxes Act 2010 and Part 2 Chapter 1 Statutory Instrument 2011/29999 for accounting periods commencing on or after 25 May 2018. The approval is subject to the Company continuing to meet the eligibility conditions of the Corporations Tax Act 2010 and the Statutory Instrument 2011/29999. The Company intends to ensure that it complies with the ITC regulations on an ongoing basis and regularly monitors the conditions required to maintain ITC status. From 1 April 2023 the main UK corporation tax rate increased from 19% to 25%. Current Tax and movements in deferred tax asset and liability are recognised in the Statement of Comprehensive Income except to the extent that they relate to the items recognised as direct movements in equity, in which case they are similarly recognised as a direct movement in equity. Current tax is the expected tax payable on any taxable income for the period, using tax rates enacted or substantively enacted at the end of the relevant period. Any closing deferred tax balances have been calculated at 25% as this is the rate expected to apply in future periods. Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the Statement of Financial Position date where transactions or events that result in an obligation to pay more tax or a right to pay less tax in the future have occurred. Timing differences are differences between the Company’s taxable profits and its results as stated in the financial statements. Deferred taxation assets are recognised where, in the opinion of the Directors, it is more likely than not that these amounts will be realised in future periods, at the tax rate expected to be applicable at realisation. Financial Statements 72 Gore Street Energy Storage Fund plc 5. Summary of significant accounting policies (continued) INVESTMENT IN SUBSIDIARIES Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed, or has rights, to variable returns from its involvement with the subsidiary entity and has the ability to affect those returns through its power over the subsidiary entity. In accordance with the exception under IFRS 10 Consolidated financial statements, the Company is an investment entity and therefore only consolidates subsidiaries if they provide investment management services and are not themselves investment entities. All subsidiaries are investment entities and held at fair value in accordance with IFRS 9 and therefore not consolidated. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash at bank and call deposits held with the bank with original maturities of three months or less. Restricted cash comprises cash held as collateral for future contractual payment obligations and deferred payments payable from indirect subsidiaries to third parties of the Company in relation to the Big Rock project. All cash is recognised at fair value and subsequently stated at amortised cost less loss allowance, which is calculated using the provision matrix of the expected credit loss model (refer to note 13 for further information). TRADE AND OTHER RECEIVABLES Trade and other receivables are recognised initially at fair value and subsequently stated at amortised cost less loss allowance which is calculated using the provision matrix of the expected credit loss model. TRADE AND OTHER PAYABLES Trade and other payables are recognised initially at fair value and subsequently stated at amortised cost. DIVIDENDS Dividends are recognised, as a reduction in equity in the financial statements. Interim equity dividends are recognised when legally payable. Final equity dividends will be recognised when approved by the Shareholders. EQUITY Equity instruments issued by the Company are recorded at the amount of the proceeds received, net of directly attributable issue costs. Costs not directly attributable to the issue are immediately expensed in the Statement of Comprehensive Income. FINANCIAL INSTRUMENTS In accordance with IFRS 9, the Company classifies its financial assets and financial liabilities at initial recognition into the categories of amortised cost or fair value through profit or loss. FINANCIAL ASSETS The Company classifies its financial assets at amortised cost or fair value through profit or loss on the basis of both: • the entity’s business model for managing the financial assets • the contractual cash flow characteristics of the financial asset Financial assets measured at amortised cost A debt instrument is measured at amortised cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. The Company includes in this category short-term non-financing receivables including cash and cash equivalents, restricted cash, and trade and other receivables. Financial asset measured at fair value through profit or loss (FVPL) A financial asset is measured at fair value through profit or loss if: a) its contractual terms do not give rise to cash flows on specified dates that are solely payments of principal and interest (SPPI) on the principal amount outstanding; or b) it is not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell; or c) it is classified as held for trading (derivative contracts in an asset position); or d) It is classified as an equity instrument. The Company includes in this category equity instruments and loans to investments. Financial Statements Annual Report for year ended 31 March 2024 73 5. Summary of significant accounting policies (continued) FINANCIAL LIABILITIES Financial liabilities measured at fair value through profit or loss (FVPL) A financial liability is measured at FVPL if it meets the definition of held for trading of which the Company had none. Financial liabilities measured at amortised cost This category includes all financial liabilities, including short-term payables. RECOGNITION AND DERECOGNITION Financial assets and liabilities are recognised on trade date, when the Company becomes party to the contractual provisions of the instrument. A financial asset is derecognised where the rights to receive cash flows from the asset have expired, or the Company has transferred its rights to receive cash flows from the asset. The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expired. IMPAIRMENT OF FINANCIAL ASSETS The Company holds trade receivables with no financing component and which have maturities of less than 12 months at amortised cost and, as such, has chosen to apply the simplified approach for expected credit losses (ECL) under IFRS 9 to all its trade receivables. Therefore the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Company’s approach to ECLs reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions. The Company uses the provision matrix as a practical expedient to measuring ECLs on trade receivables, based on days past due for groupings of receivables with similar loss patterns. Receivables are grouped based on their nature. The provision matrix is based on historical observed loss rates over the expected life of the receivables and is adjusted for forward looking estimates. FAIR VALUE MEASUREMENT AND HIERARCHY Fair value is the price that would be received on the sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market. It is based on the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. The fair value hierarchy to be applied under IFRS 13 is as follows: Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities. Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are carried at fair value, and which will be recorded in the financial information on a recurring basis, the Company will determine whether transfers have occurred between levels in the hierarchy by reassessing categorisation at the end of each reporting period. 6. Fees and expenses ACCOUNTING, SECRETARIAL AND DIRECTORS During the year, expenses incurred with Gore Street Services Limited (formerly Gore Street Operational Management Limited) (“GSS”) for secretarial services amounted to £nil with £nil being outstanding and payable at the year end. Apex Group Fiduciary Services (UK) Limited (“Apex”) had been appointed as administrator. Through an Administration agreement, Apex is entitled to an annual fee of £50,000 for the provision of accounting and administration services based on a Company Net Asset Value of up to £30 million. An ad valorem fee based on total assets of the Company which exceed £30 million will be applied as follows: • 0.05% on a net asset value of £30 million to £75 million • 0.025% on a net asset value of £75 million to £150 million • 0.02% on a net asset value thereafter. During the year, expenses incurred with Apex for accounting and administrative services amounted to £159,714 (2023: £144,233), with £39,414 being outstanding and payable at the year end (2023: £41,829). Financial Statements 74 Gore Street Energy Storage Fund plc 6. Fees and expenses (continued) AIFM The AIFM, Gore Street Capital Limited (the “AIFM”), was entitled to receive from the Company, in respect of its services provided under the AIFM agreement, a fee of £75,000 per annum for the term of the AIFM agreement. During the year, AIFM fees amounted to £75,104 (2023: £74,793), there were no outstanding fees payable at the year end. At the year end, an amount of £18,750 paid in the year to Gore Street Capital Limited in respect of these fees, is being disclosed in prepayments as it relates to the period 1 April 2024 to 30 June 2024. INVESTMENT ADVISORY The fees relating to the Investment Advisor are disclosed within note 22 Transactions with related parties 7. Net gain on investments at fair value through profit and loss 31 March 2024 (£) 31 March 2023 (£) Net (loss)/gain on investments at fair value through profit and loss (30,041,779) 60,826,822 (30,041,779) 60,826,822 8. Investment Income 31 March 2024 (£) 31 March 2023 (£) Bank interest income 3,143,387 3,631,520 Loan interest income received from subsidiaries 29,155,404 8,835,389 32,298,791 12,466,909 The bank and loan interest income is calculated using the effective interest rate method. 9. Administrative and other expenses 31 March 2024 (£) 31 March 2023 (£) Accounting and Company Secretarial fees 171,930 191,504 Auditor’s remuneration (see below) 273,000 303,500 Bank interest and charges 9,515 7,813 Directors’ remuneration and expenses 306,556 242,313 Directors & Officers insurance 19,272 39,336 Foreign exchange loss 14 34 Investment advisory fees 5,542,596 4,914,324 Legal and professional fees 1,110,554 1,218,993 AIFM fees 75,104 74,793 Marketing fees 56,295 94,630 Performance fees – 2,457,164 Sundry expenses 361,070 337,032 7,925,906 9,881,436 Financial Statements Annual Report for year ended 31 March 2024 75 9. Administrative and other expenses (continued) During the year, the Company received the following services from its auditor, Ernst & Young LLP. 31 March 2024 (£) 31 March 2023 (£) Audit services Statutory audit: Annual accounts – current year 254,500 285,900 Non-audit services Other assurance services – Interim accounts 18,500 17,600 Total audit and non-audit services 273,000 303,500 The statutory auditor is remunerated £170,790 (2023: £171,350), in relation to audits of the subsidiaries. This amount is not included in the above. 10. Taxation The Company is recognised as an Investment Trust Company (“ITC”) for accounting periods beginning on or after 25 May 2018 and is taxed at the main rate of 25%. ITCs are exempt from UK corporation tax on their capital gains. Additionally, ITCs may designate all or part of dividends distributions to shareholders as an interest distribution, which is tax deductible, to the extent that it has “qualifying interest income” for the accounting period. Therefore, there is no corporate tax charge for the year (2023: £nil). 31 March 2024 (£) 31 March 2023 (£) (a) Tax charge in profit and loss account UK Corporation tax – – (b) Reconciliation of the tax charge for the year (Loss)/profit before tax (5,658,539) 63,412,295 Tax at UK standard rate of 25% (2023: 19%) (1,414,635) 12,048,336 Effects of: Unrealised loss/(gain) on fair value investments 7,510,445 (11,557,096) Expenses not deductible for tax purposes 42,325 12,064 Income not taxable (2,589) – Tax deductible interest distributions (7,219,157) (1,371,989) Deferred tax not recognised 1,083,611 868,685 Tax charge for the year – – The Company has an unrecognised deferred tax asset of £2,917,202 (2023: £1,833,591) based on the excess unutilised operating expenses of £11,668,809 (2023: £7,334,364) at the prospective UK corporation tax rate of 25% (2023:25%). The Company may claim deductions on future distributions or parts thereof designated as interest distributions. Therefore, a deferred tax asset has not been recognised in respect of these operating expenses and will be recoverable only to the extent that the Company has sufficient future taxable profits. 11. Earnings per share Earnings per share (EPS) amounts are calculated by dividing the profit or loss for the period attributable to ordinary equity holders of the Company by the weighted average number of Ordinary Shares in issue during the period. As there are no dilutive instruments outstanding, basic, and diluted earnings per share are identical. 31 March 2024 31 March 2023 Net (loss)/gain attributable to ordinary shareholders (£ 5,658,539) £ 63,412,295 Weighted average number of Ordinary Shares for the year 485,524,888 476,542,691 (Loss)/profit per share – Basic and diluted (pence) (1.17) 13.31 Financial Statements 76 Gore Street Energy Storage Fund plc 12. Investments Place of business Percentage ownership 31 March 2024 (£) 31 March 2023 (£) GSES1 Limited (“GSES1”) England & Wales 100% 470,570,558 434,762,146 Porterstown Battery Storage Limited (“Porterstown”) Republic of Ireland 49% 6,765,120 – Kilmannock Battery Storage Limited (“Kilmannock”) Republic of Ireland 49% 4,323,837 – Reconciliation 31 March 2024 (£) 31 March 2023 (£) Opening balance 434,762,146 180,762,419 Loans advanced during the year 69,850,873 225,765,788 Loan repayments during the year (3,678,725) (32,592,883) Loan interest received (29,155,404) (8,835,389) Loan interest accrued from GSES1 Limited 29,971,133 8,714,157 Purchase of investments in Porterstown and Kilmannock 10,767,000 - Total fair value movement on equity investment (30,857,508) 60,948,054 481,659,515 434,762,146 The Company meets the definition of an investment entity. Therefore, it does not consolidate its subsidiaries or equity method account for associates but, rather, recognises them as investments at fair value through profit or loss. The Company is not contractually obligated to provide financial support to the subsidiaries and associate, except as guarantor to the debt facility entered into by its direct subsidiary GSES1 Limited, and there are no restrictions in place in passing monies up the structure. The investment in GSES1 is financed through equity and a loan facility available to GSES1. The facility may be drawn upon, to any amount agreed by the Company as lender, and is available for a period of 20 years from 28 June 2018. The rest of the investment in GSES1 is funded through equity. The amount drawn on the facility at 31 March 2024 was £375,354,326 (2023: £309,182,178). The loan is interest bearing and attracts interest at 8.5% per annum effective from 1 April 2023. Up until that date, the interest charge was 5% per annum. Investments in the indirect subsidiaries are also structured through loan and equity investments and the ultimate investments are in energy storage facilities. The increase in interest rate is viewed as a substantial modification to the terms of the loan facility and as a result is derecognised and re-recognised from the effective date. As the loan principal and accrued interest form part of the Company’s investments at fair value through profit or loss, the effect of this change of interest rate is captured within the revaluation and remeasurement of the total investment at period end. As a result there is no accounting impact of the modification on the Statement of Financial Position or Statement of Comprehensive Income. Realisation of increases in fair value in the indirect subsidiaries will be passed up the structure as repayments of loan interest and principal. The Company holds a 100% investment in GSES1 and a 49% stake in Porterstown and Kilmannock. GSES1 in turn holds investments in various holding companies and operating assets as detailed below. Financial Statements Annual Report for year ended 31 March 2024 77 12. Investments (continued) Immediate Parent Place of business Percentage Ownership Investment GSF Albion Limited (“GSF Albion”) GSES1 England & Wales 100% NK Boulby Energy Storage Limited GSF Albion England & Wales 99.998% Boulby Ferrymuir Energy Storage Limited GSF Albion England & Wales 100% Ferrymuir Kiwi Power ES B Limited GSF Albion England & Wales 49% Cenin GSF IRE Limited (“GSF IRE”) GSES1 England & Wales 100% Mullavilly Energy Limited GSF IRE Northern Ireland 51% Mullavilly Drumkee Energy Limited GSF IRE Northern Ireland 51% Drumkee Porterstown Battery Storage Limited (2) GSF IRE (51%) / Company direct holding (49%) Republic of Ireland 100% Porterstown Kilmannock Battery Storage Limited (2) GSF IRE (51%) / Company direct holding (49%) Republic of Ireland 100% Kilmannock GSF England Limited (“GSF England”) GSES1 England & Wales 100% GS10 Energy Storage Limited (formerly Ancala Energy Storage Limited) GSF England England & Wales 100% Beeches, Blue House Farm, Brookhall, Fell View, Grimsargh, Hermitage, Heywood Grange, High Meadow, Hungerford, Low Burntoft Breach Farm Energy Storage Limited GSF England England & Wales 100% Breach Farm Hulley Road Energy Storage Limited GSF England England & Wales 100% Hulley Road Larport Energy Storage Limited GSF England England & Wales 100% Larport Lascar Battery Storage Limited GSF England England & Wales 100% Lascar OSSPV Limited GSF England England & Wales 100% Lower Road, Port of Tilbury Stony Energy Storage Limited GSF England England & Wales 100% Stony Enderby Battery Storage Limited GSF England England & Wales 100% Enderby Middleton Energy Storage Limited GSF England England & Wales 100% Middleton GSF Atlantic Limited GSES1 England & Wales 100% GSF Americas Inc. GSF Atlantic Delaware 100% GSF Cremzow GmbH & Co KG GSF Atlantic Germany 90% Cremzow LP GSF Cremzow Verwaltungs GmbH GSF Atlantic Germany 90% Cremzow GP Snyder ESS Assets, LLC GSF Americas Delaware 100% Snyder Sweetwater ESS Assets, LLC GSF Americas Delaware 100% Sweetwater Westover ESS Assets, LLC GSF Americas Delaware 100% Westover Cedar Hill ESS Assets, LLC GSF Americas Delaware 100% Cedar Hill Mineral Wells ESS Assets, LLC GSF Americas Delaware 100% Mineral Wells Wichita Falls ESS Assets, LLC GSF Americas Delaware 100% Wichita Falls Mesquite ESS Assets, LLC GSF Americas Delaware 100% Mesquite Dogfish ESS Assets, LLC GSF Americas Delaware 100% Dogfish Big Rock ESS Assets, LLC GSF Americas Delaware 100% Big Rock Mucklagh Battery Storage Facility Limited (1) GSF IRE Republic of Ireland 51% Mucklagh (1) The acquisition of Mucklagh Battery Storage Facility Limited was completed on 14 March 2024. (2) On 25 March 2024, the Company directly acquired the remaining 49% of both Porterstown Battery Storage Limited and Kilmannock Battery Storage Limited through an issuance of shares in the Company on 26 March 2024 (see note 20). This acquisition, along with the existing 51% stake of Porterstown and Kilmannock held by GSF IRE Limited, takes total ownership for the Company and its subsidiaries to 100%. Post year end, this 49% stake was transferred down to GSF IRE Limited by way of an intercompany loan through GSES 1 Limited. Financial Statements 78 Gore Street Energy Storage Fund plc 13. Cash and cash equivalents 31 March 2024 (£) 31 March 2023 (£) Cash at bank 55,306,092 99,199,093 Restricted cash 5,361,480 24,506,634 60,667,572 123,705,727 Restricted cash comprises cash held as collateral for future contractual payment obligations and deferred payments payable from indirect subsidiaries of the Company to third party suppliers in relation to the Big Rock project. Collateral will be released to the Company upon settlement of the contractual payments, to be made in accordance with the applicable contracts. The final payment to the supplier under the contractual agreement was made in April 2024 and subsequently the remaining £5,361,480 plus interest earned post year end was released from the collateral account in June 2024. 14. Trade and other receivables 31 March 2024 (£) 31 March 2023 (£) VAT recoverable 185,712 213,360 Prepaid Director’s and Officer’s insurance 2,111 4,085 Other Prepayments 118,218 36,746 Other Debtors – 280,560 Bank interest receivable 213,812 309,074 519,853 843,825 15. Trade and other payables 31 March 2024 (£) 31 March 2023 (£) Administration fees 39,414 73,509 Audit fees 276,500 283,100 Directors remuneration 9,824 8,222 Professional fees 1,823,031 2,554,634 Other creditors 1,678 127,388 2,150,447 3,046,853 16. Categories of financial instruments 31 March 2024 (£) 31 March 2023 (£) Financial assets Financial assets at amortised cost Cash and cash equivalents 60,667,572 123,705,727 Trade and other receivables 519,853 843,825 Fair value through profit and loss Investment 481,659,515 434,762,146 Total financial assets 542,846,940 559,311,698 Financial liabilities Financial liabilities at amortised cost Trade and other payables 2,150,447 3,046,853 Total financial liabilities 2,150,447 3,046,853 At the balance sheet date, all financial assets and liabilities were measured at amortised cost except for the investment in equity and loans to subsidiaries which are measured at fair value. Financial Statements Annual Report for year ended 31 March 2024 79 17. Fair Value measurement VALUATION APPROACH AND METHODOLOGY There are three traditional valuation approaches that are generally accepted and typically used to establish the value of a business; the income approach, the market approach, and the net assets (or cost based) approach. Within these three approaches, several methods are generally accepted and typically used to estimate the value of a business. The Company has chosen to utilise the income approach, which indicates value based on the sum of the economic income that an asset, or group of assets, is anticipated to produce in the future. Therefore, the income approach is typically applied to an asset that is expected to generate future economic income, such as a business that is considered a going concern. Free cash flow to total invested capital is typically the appropriate measure of economic income. The income approach is the Discounted Cash Flow (“DCF”) approach and the method discounts free cash flows using an estimated discount rate (Weighted Average Cost of Capital (“WACC”)). VALUATION PROCESS The Company’s portfolio of lithium-ion energy storage investments has a total capacity of 1.25GW (2023: 1.17GW). As at 31 March 2024, 371.5 MW of the Company’s total portfolio was operational (2023: 291.6 MW) and 873.5 MW pre-operational (2023: 881.6 MW) (the “Investments”). The Investments comprise projects, based in the UK, the Republic of Ireland, mainland Europe and North America. The Directors review and approve these valuations following appropriate challenge and examination. The current portfolio consists of non-market traded investments and valuations are analysed using forecasted cash flows of the assets and used the discounted cash flow approach as the primary approach for the valuation. The Investment Manager prepares financial models utilising revenue forecasts from external parties to determine the fair value of the Company’s investments and the Company engages external, independent, and qualified valuers to verify the valuations. As at 31 March 2024, the fair value of the portfolio of investments has been determined by the Investment Manager and reviewed by BDO UK LLP. The below table summarises the significant unobservable inputs to the valuation of investments. Significant Inputs Fair Value Investment Portfolio Valuation technique Description (Range) 31 March 2024 (£) 31 March 2023 (£) Great Britain DCF Discount Rate 7.25% – 11% 197,453,898 180,714,570 (excluding Northern Ireland) Revenue / MW / hr £7 – £12 Northern Ireland DCF Discount Rate 8% – 9.25% 44,381,239 55,049,170 Revenue / MW / hr €9 – €27 Republic of Ireland DCF Discount Rate 8.25% – 11% 54,445,455 28,515,507 Revenue / MW / hr €8 – €13 Other OECD DCF Discount Rate 9.25% – 10.75% 196,268,784 171,008,958 Revenue / MW / hr €9 – €12 / $8 – $29 Holding Companies NAV (10,889,861) (526,059) Total Investments 481,659,515 434,762,146 The fair value of the holding companies represents the net assets together with any cash held within those companies in order to settle any operational costs. Financial Statements 80 Gore Street Energy Storage Fund plc • Sensitivity Analysis The below table reflects the range of sensitivities in respect of the fair value movements of the Company’s investments and via GSES1. Significant Inputs Estimated effect on Fair Value Investment Portfolio Valuation technique Description Sensitivity 31 March 2024 (£) 31 March 2023 (£) Great Britain (excluding Northern Ireland) DCF Revenue +10% 40,018,900 39,163,849 -10% (40,636,523) (39,402,771) Discount rate +1% (29,165,634) (25,103,594) -1% 34,203,482 29,658,404 Northern Ireland DCF Revenue +10% 4,773,587 5,360,179 -10% (4,776,693) (5,357,401) Discount rate +1% (2,657,793) (3,239,801) -1% 3,066,071 3,741,944 Exchange rate +3% (1,222,696) (896,254) -3% 1,298,082 952,017 Republic of Ireland DCF Revenue +10% 7,892,427 5,631,626 -10% (9,622,279) (6,434,752) Discount rate +1% (8,951,937) (5,936,555) -1% 10,423,597 6,914,698 Exchange rate +3% (1,202,234) (101,466) -3% 1,276,599 107,516 Other OECD DCF Revenue +10% 29,656,856 24,849,092 -10% (30,077,236) (25,153,598) Discount rate +1% (16,265,625) (14,401,398) -1% 18,675,891 16,472,024 Exchange rate +3% (5,675,505) (4,689,659) -3% 6,026,567 4,981,974 High case (+10%) and low case (-10%) revenue information used to determine sensitivities are provided by third party pricing sources. • Valuation of financial instruments The investments at fair value through profit or loss are Level 3 in the fair value hierarchy. No transfers between levels took place during the year. The fair value of other financial instruments held during the year approximates their carrying amount. 18. Financial risk management The Company is exposed to certain risks through the ordinary course of business and the Company’s financial risk management objective is to minimise the effect of these risks. The management of risks is performed by the Directors of the Company and the exposure to each financial risk is considered potentially material to the Company, how it arises and the policy for managing it is summarised below: • Capital risk management The capital structure of the Company at year end consists of equity attributable to equity holders of the Company, comprising issued capital, reserves and accumulated gains. The Board continues to monitor the balance of the overall capital structure so as to maintain investor and market confidence. The Company is not subject to any external capital requirements. • Counterparty risk The Company is exposed to third party credit risk in several instances, including the possibility that counterparties with which the Company and its subsidiaries, together the Group, contract with, may default or fail to perform their obligations in the manner anticipated by the Group. Such counterparties may include (but are not limited to) manufacturers who have provided warranties in relation to the supply of any equipment or plant, EPC contractors who have constructed the Company’s projects, who may then be engaged to operate assets held by the Company, property owners or tenants who are leasing ground space and/or grid connection to the Company for the location of the assets, contractual counterparties who acquire services from the Company underpinning revenue generated by each project or the energy suppliers, or demand aggregators, insurance companies who may provide coverage against various risks applicable to the Company’s assets (including the risk of terrorism or natural disasters affecting the assets) and other third parties who may owe sums to the Company. In the event that such credit risk crystallises, in one or more instances, and the Company is, for example, unable to recover sums owed to it, make claims in relation to any contractual agreements or performance of obligations (e.g. warranty claims) or require the Company to seek alternative counterparties, this may materially adversely impact the investment returns. 17. Fair Value measurement (continued) Financial Statements Annual Report for year ended 31 March 2024 81 18. Financial risk management (continued) Further the projects in which the Company may invest will not always benefit from a turnkey contract with a single contractor and so will be reliant on the performance of several suppliers. Therefore, the key risks during battery installation in connection with such projects are the counterparty risk of the suppliers and successful project integration. The Company accounts for its exposure to counterparty risk through the fair value of its investments by using appropriate discount rates which adequately reflects its risk exposure. The Company regularly assesses the creditworthiness of its counterparties and enters into counterparty arrangements which are financially sound and ensures, where necessary, the sourcing of alternative arrangements in the event of changes in the creditworthiness of its present counterparties. • Concentration risk The Company’s investment policy is limited to investment in energy storage infrastructure in the UK, Republic of Ireland, North America, Western Europe, Australia, Japan, and South Korea. The value of investments outside of the UK is not intended to exceed 60% of Gross Asset Value of the Company. As at 31 March 2024, investments outside of the UK were at 42% (2023: 36%) of the Gross Asset Value. Significant concentration of investments in any one sector and location may result in greater volatility in the value of the Group’s investments and consequently the Net Asset Value and may materially and adversely affect the performance of the Group and returns to Shareholders. The Company currently has investments located across 5 different grids in the UK, Republic of Ireland, North America (ERCOT and CAISO), and Germany. This diversification reduces exposure to any single grid. The investment policy also limits the exposure to any single asset within the portfolio to 25% of the Gross Asset Value of the Company. • Credit risk The Company regularly assesses its credit exposure and considers the creditworthiness of its customers and counterparties. Cash and bank deposits are held with Barclays plc, Santander UK plc and JPMorgan Chase and Co., all reputable financial institutions with Moody’s credit ratings of Baa1, A1 and A1 respectively. • Liquidity risk The objective of liquidity management is to ensure that all commitments which are required to be funded can be met out of readily available and secure sources of funding. The Company may, where the Board deems it appropriate, use short-term leverage to acquire assets but with the intention that such leverage be repaid with funds raised through a new issue of equity or cash flow from the Company’s portfolio. Such leverage will not exceed 30 per cent. at the time of borrowing of Gross Asset Value without Shareholder approval. The Company intends to prudently introduce a conservative amount of debt throughout the portfolio. The Company’s only financial liabilities as at 31 March 2024 are trade and other payables. The Company has sufficient cash reserves to cover these in the short-medium term. The Company’s cash flow forecasts are monitored regularly to ensure the Company is able to meet its obligations when they fall due. The Company’s investments are level 3 and thus illiquid and this is taken into assessment of liquidity analysis. The following table reflects the maturity analysis of financial assets and liabilities. 31 March 2024 < 1 year 1 to 2 years 2 to 5 years > 5 years Total Financial assets Cash at bank 55,306,092 – – – 55,306,092 Restricted cash 5,361,480 – – – 5,361,480 Trade and other receivables 519,853 – – – 519,853 Fair value through profit and loss Investments – – – 481,659,515 481,659,515 Total financial assets 61,187,425 – – 481,659,515 542,846,940 Financial liabilities Financial liabilities at amortised cost Trade and other payables 2,150,447 – – – 2,150,447 Total financial liabilities 2,150,447 – – – 2,150,447 31 March 2023 < 1 year 1 to 2 years 2 to 5 years > 5 years Total Financial assets Cash at bank 99,199,093 - - - 99,199,093 Restricted cash 19,610,119 4,896,515 - - 24,506,634 Trade and other receivables 843,825 - - - 843,825 Fair value through profit and loss Investments – – – 434,762,146 434,762,146 Total financial assets 119,653,037 4,896,515 – 434,762,146 559,311,698 Financial liabilities Financial liabilities at amortised cost Trade and other payables 3,046,853 – – – 3,046,853 Total financial liabilities 3,046,853 – – – 3,046,853 Financial Statements 82 Gore Street Energy Storage Fund plc 18. Financial risk management (continued) Investments include both equity and debt instruments. As the equity instruments have no contractual maturity date, they have been included with the >5-year category. Additionally, the debt instruments have an original maturity of 20 years. • Market risk Market risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk reflects currency risk, interest rate risk and other price risks. The objective is to minimise market risk through managing and controlling these risks to acceptable parameters, while optimising returns. The Company uses financial instruments in the ordinary course of business, and also incurs financial liabilities, in order to manage market risks. i) Currency risk The majority of investments, together with the majority of all transactions during the current period were denominated in Pounds Sterling. The Company, via GSES 1 and its direct subsidiaries (and also directly for 49% of Porterstown and Kilmannock), holds three investments (Kilmannock, Porterstown and Mucklagh) in the Republic of Ireland, an investment in Germany (Cremzow), and several investments in North America, creating an exposure to currency risk. These investments have been translated into Pounds Sterling at year end and represent 50% (2023: 46%) of the Company’s fair valued investment portfolio. The Company regularly monitors its exposure to foreign currency and executes appropriate hedging arrangements in the form of forward contracts with reputable financial institutions to reduce this risk. These derivatives are held by the Company’s subsidiaries. ii) Interest rate risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The Company is exposed to interest rate risk on its cash balances held with counterparties, bank deposits, advances to counterparties and through loans to related parties. Loans to related parties carry a fixed rate of interest for an initial period of 20years. The Company may be exposed to changes in variable market rates of interest and this could impact the discount rate used in the investment valuations and therefore the valuation of the projects as well as the fair value of the loan receivables. Refer to Note 17 for the sensitivity of valuations to changes in the discount rate. The Company currently has no external debt. The Company continuously monitors its exposure to interest rate risk and where necessary will assess and execute hedging arrangements to mitigate interest rate risk. iii) Price risk Price risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in market prices. If the market prices of the investments were to increase by 10%, there will be a resulting increase in net assets attributable to ordinary shareholders for the period of £48,165,952 (2023: £43,476,217). Similarly, a decrease in the value of the investment would result in an equal but opposite movement in the net assets attributable to ordinary shareholders. The Company relies on the market knowledge of the experienced Investment Advisor, the valuation expertise of the third-party valuer BDO and the use of third-party market forecast information to provide comfort with regard to fair market values of investments reflected in the financial statements. 19. Net asset value per share Basic NAV per share is calculated by dividing the Company’s net assets as shown in the Statement of Financial Position that are attributable to the ordinary equity holders of the Company by the number of Ordinary Shares outstanding at the end of the period. As there are no dilutive instruments outstanding, basic, and diluted NAV per share are identical. 31 March 2024 31 March 2023 Net assets per Statement of Financial Position £ 540,696,493 £ 556,264,845 Ordinary Shares in issue as at 31 March 505,099,478 481,399,478 NAV per share – Basic and diluted (pence) 107.05 115.55 Financial Statements Annual Report for year ended 31 March 2024 83 20. Share capital and reserves Share capital (£) Share premium reserve (£) Special reserve (£) Merger reserve (£) Capital reduction reserve (£) Capital reserve (£) Revenue reserve (£) Total (£) At 1 April 2023 4,813,995 315,686,634 349,856 – 111,125,000 125,584,414 (1,295,054) 556,264,845 Issue of ordinary £0.01 shares: 20 December 2023 140,000 15,666,000 – – – – – 15,806,000 Issue of ordinary £0.01 shares: 25 March 2024 97,000 – – 10,670,000 – – – 10,767,000 Share issue costs – (49,735) – (48,116) – – – (97,851) Movement in special reserve – – (349,856) – 349,856 – – – Dividends paid – – – – (36,384,962) – – (36,384,962) Loss for the year – – – – – (30,041,779) 24,383,240 (5,658,539) At 31 March 2024 5,050,995 331,302,899 - 10,621,884 75,089,894 95,542,635 23,088,186 540,696,493 Share capital (£) Share premium reserve (£) Special reserve (£) Capital reduction reserve (£) Capital reserve (£) Revenue reserve (£) Total (£) At 1 April 2022 3,450,358 269,708,123 186,656 42,258,892 64,757,592 (3,880,527) 376,481,094 Issue of ordinary £0.01 shares: 14 April 2022 1,363,637 148,636,363 – – – – 150,000,000 Transfer to capital reduction reserve – (100,000,000) – 100,000,000 – – – Share issue costs – (2,657,852) – – – – (2,657,852) Movement in special reserve – – 163,200 (163,200) – – – Dividends paid – – – (30,970,692) – – (30,970,692) Profit for the year – – – – 60,826,822 2,585,473 63,412,295 At 31 March 2023 4,813,995 315,686,634 349,856 111,125,000 125,584,414 (1,295,054) 556,264,845 SHARE ISSUES On 20 December 2023, the Company issued 14,000,000 ordinary shares at a price of 112.9 pence per share, raising gross proceeds from the Placing of £15,806,000. On 26 March 2024, the Company issued 9,700,000 ordinary shares at a price of 111 pence per share, as consideration for the acquisition of the remaining 49% stake in Porterstown Battery Storage Limited and Kilmannock Battery Storage Limited (see note 12). Because this acquisition has increased the Company’s indirect ownership of the two investments above 90% (from 51% to 100%), merger relief has been applied to the share issuance. As such, any premium issued on these shares has been recognised as part of the merger reserve. Ordinary shareholders are entitled to all dividends declared by the Company and to all the Company’s assets after repayment of its borrowings and ordinary creditors. Ordinary shareholders have the right to vote at meetings of the Company. All ordinary Shares carry equal voting rights. The nature and purpose of each of the reserves included within equity at 31 March 2024 are as follows: • Share premium reserve: represents the surplus of the gross proceeds of share issues over the nominal value of the shares, net of the direct costs of equity issues and net of conversion amount. • Special reserve: represents a non-distributable reserve totalling the amount of outstanding creditors at the date of the Company’s approved reduction in capital. During the year, these creditors were paid off and the remaining special reserve has been written off back against the capital reduction reserve. • Merger reserve: represents a non-distributable reserve comprising any premium on a share issuance used as consideration for the purpose of obtaining at least 90% equity stake in another company. • Capital reduction reserve: represents a distributable reserve created following a Court approved reduction in capital. Financial Statements 84 Gore Street Energy Storage Fund plc 20. Share capital and reserves (continued) • Capital reserve: represents a non-distributable reserve of unrealised gains and losses from changes in the fair values of investments as recognised in the Capital account of the Statement of Comprehensive Income. • Revenue reserve: represents a distributable reserve of cumulative gains and losses recognised in the Revenue account of the Statement of Comprehensive Income. The only movements in these reserves during the period are disclosed in the Statement of Changes in Equity. 21. Dividends Dividend per share 31 March 2024 (£) 31 March 2023 (£) Dividends paid during the year For the 3 month period ended 31 December 2021 2 pence – 6,900,718 For the 3 month period ended 31 March 2022 1 pence – 4,813,995 For the 3 month period ended 30 June 2022 2 pence – 9,627,990 For the 3 month period ended 30 September 2022 2 pence – 9,627,990 For the 3 month period ended 31 December 2022 2 Pence 9,627,990 – For the 3 month period ended 31 March 2023 1.5 pence 7,220,992 – For the 3 month period ended 30 June 2023 2 pence 9,627,990 – For the 3 month period ended 30 September 2023 2 pence 9,907,990 – 36,384,962 30,970,693 The table below sets out the proposed final dividend, together with the interim dividends declared, in respect of the financial year, which is the basis on which the requirements of Section 1158 of the Corporation Tax Act 2010 are considered. Dividend per share 31 March 2024 (£) 31 March 2023 (£) Dividends declared for the year For the 3 month period ended 30 June 2022 2 pence – 9,627,990 For the 3 month period ended 30 September 2022 2 pence – 9,627,990 For the 3 month period ended 31 December 2022 2 pence – 9,627,990 For the 3 month period ended 31 March 2023 1.5 pence – 7,220,992 For the 3 month period ended 30 June 2023 2 pence 9,627,990 – For the 3 month period ended 30 September 2023 2 pence 9,907,990 – For the 3 month period ended 31 December 2023 2 pence 9,907,990 – For the 3 month period ended 31 March 2024 1.5 pence 7,576,492 – 37,020,462 36,104,962 22. Transactions with related parties Following admission of the Ordinary Shares (refer to note 20), the Company and the Directors are not aware of any person who, directly or indirectly, jointly, or severally, exercises or could exercise control over the Company. The Company does not have an ultimate controlling party. Details of related parties are set out below: DIRECTORS On 1 May 2023, Lisa Scenna was appointed as a Director. Patrick Cox, Chair of the Board of Directors of the Company, is paid a director’s remuneration of £77,000 per annum, (2023: £70,625), Caroline Banszky is paid a director’s remuneration of £57,000 per annum, (2023: £52,500), with the remaining directors’ remuneration of £47,000 each per annum, (2023: £43,750). Total director’s remuneration, associated employment costs and expenses of £306,556 were incurred in respect of the year with £9,824 being outstanding and payable at the year end. INVESTMENT ADVISOR The Investment Advisor, Gore Street Capital Limited (the “Investment Advisor”), is entitled to advisory fees under the terms of the Investment Advisory Agreement amounting to 1% of Adjusted Net Asset Value. The advisory fee will be calculated as at each NAV calculation date and payable quarterly in arrears. Financial Statements Annual Report for year ended 31 March 2024 85 22. Transactions with related parties (continued) For the avoidance of doubt, where there are C Shares in issue, the advisory fee will be charged on the Net Asset Value attributable to the Ordinary Shares and C Shares respectively. For the purposes of the quarterly advisory fee, Adjusted Net Asset Value means Net Asset Value, minus Uncommitted Cash. Uncommitted Cash means all cash on the Company balance sheet that has not been allocated for repayment of a liability on the balance sheet or any earmarked capital costs of any member of the Group. At 31 March there was no uncommitted cash. Investment advisory fees of £5,542,596 (2023: £4,914,324) were incurred during the year, of which £1,387,354 was outstanding as at 31 March 2024, (2023: £nil outstanding). In addition to the advisory fee, the Advisor may be entitled to a performance fee by reference to the movement in the Net Asset Value of Company (before subtracting any accrued performance fee) over the Benchmark from the date of admission on the London Stock Exchange. The Benchmark is equal to (a) the gross proceeds of the Issue at the date of admission increased by 7 per cent. per annum (annually compounding), adjusted for: (i) any increases or decreases in the Net Asset Value arising from issues or repurchases of Ordinary Shares during the relevant calculation period; (ii) the amount of any dividends or distributions (for which no adjustment has already been made under (i)) made by the Company in respect of the Ordinary Shares at any time from date of admission; and (b) where a performance fee is subsequently paid, the Net Asset Value (after subtracting performance fees arising from the calculation period) at the end of the calculation period from which the latest performance fee becomes payable increased by 7 per cent. per annum (annually compounded). The calculation period will be the 12 month period starting 1 April and ending 31 March in each calendar year with the first year commencing on the date of admission on the London Stock Exchange. The performance fee payable to the Investment Advisor by the Company will be a sum equal to 10 per cent. of such amount (if positive) by which Net Asset Value (before subtracting any accrued performance fee) at the end of a calculation period exceeds the Benchmark provided always that in respect of any financial period of the Company (being 1 April to 31 March each year) the performance fee payable to the Investment Advisor shall never exceed an amount equal to 50 per cent of the Advisory Fee paid to the Investment Advisor in respect of that period. Performance fees are payable within 30 days from the end of the relevant calculation period. No performance fees were accrued as at 31 March 2024, (2023: £2,457,164). GSS, a direct subsidiary to the Investment Adviser, provided commercial management services to the Company resulting in charges in the amount of £672,351 being paid by the Company (2023: £855,692). During 2023, recharges related to staff under the commercial management agreement (CMA) was changed from a cash basis to an accruals basis. Historically, all staff costs were recharged under the CMA only when paid, resulting in volatility in the corporate services recharges. They are now recharged quarterly in line with the accrued expenditure throughout the year. As a result of the change in recognition during the year, a “catch- up” adjustment was posted to recognise accrued staff-related expenses in 2023. The catch-up adjustment effectively recognises costs associated with two years (2022 and 2023). In subsequent periods, all staff costs will continue to be recharged on an accrual basis - ensuring only 1 years’ expenses are recognised in each reporting period. INVESTMENTS The Company holds 100% interest in GSES 1 Limited through equity and a loan facility. Transactions and balances held with GSES 1 for the year are all detailed within note 12. On 25 March 2024, the Company directly acquired the remaining 49% of both Porterstown Battery Storage Limited and Kilmannock Battery Storage Limited through an issuance of shares in the Company on 26 March 2024 (see note 20). This acquisition, along with the existing 51% stake of Porterstown and Kilmannock held by GSF IRE Limited, takes total ownership for the Company and its subsidiaries to 100%. Post year end, this 49% stake was transferred down to GSF IRE Limited by way of an intercompany loan through GSES 1 Limited. Refer to Note 12 for further details. 23. Guarantees and Capital commitments The Company together with its direct subsidiary, GSES1 Limited entered into Facility and Security Agreements with Santander UK PLC in May 2021 for £15 million. The Facility was increased to £50 million in June 2023. Under these agreements, the Company acts as chargor and guarantor to the amounts borrowed under the Agreements by GSES1 Limited. As at 31 March 2024, an amount of £5,535,292 has been drawn on this facility (2023: £nil). The Company had no contingencies and significant capital commitments as at the 31 March 2024. 24. Post balance sheet events The Directors have evaluated the need for disclosures and / or adjustments resulting from post balance sheet events through to 12July 2024, the date the financial statements were available to be issued. Post year end, further to the direct acquisition of the remaining 49% of both Porterstown Battery Storage Limited and Kilmannock Battery Storage Limited, the Company transferred these new equity stakes down to GSF IRE Limited by way of an intercompany loan through GSES 1 Limited. The Board approved on the 11 March 2024, the issuance of an interim dividend of 2 pence per share. This dividend totalling £9,907,990 was paid to investors on 12 April 2024. There were no adjusting post balance sheet events and as such no adjustments have been made to the valuation of assets and liabilities as at 31 March 2024. Annual General Meeting – Recommendations 86 Gore Street Energy Storage Fund plc Annual General Meeting – Recommendations The Annual General Meeting (“AGM”) of the Company will be held on Wednesday, 18 September 2024 at 10.00 am. Theformal Notice of Meeting is set out on page88. Thefollowing information is important and requires your immediate attention. If you are in any doubt about the action you should take, you should consult an independent financial adviser, authorised under the Financial Services and Markets Act 2000. Ordinary business Resolutions 1 to 12 are all ordinary resolutions. Resolution 1 is a required resolution. Resolution 2 invites shareholders to approve the Company’s dividend payment frequency policy. Resolution 3 concerns the Directors’ Remuneration Report, on pages 55 to 56. Resolutions 4 to 8 invite shareholders to re-elect each of the Directors for another year, following the recommendations of the Remuneration and Nomination Committee, set out on pages 54 and 55 (their biographies are set out on pages 45 and 46). Resolutions 9 and 10 concern the re-appointment and remuneration of the Company’s auditor, discussed in the Audit Committee Report on pages 51 and 52. Special business Resolutions 11 and 12: Directors’ authority to allot shares (ordinary resolutions) These resolutions deal with the Directors’ authority to allot ordinary Shares of one penny each in the capital of the Company (“Shares”) in accordance with section 551 of the Companies Act 2006 (the “Act”). If passed, resolution 11 will authorise the Directors to allot Shares up to a maximum nominal amount of £505,099, which represents approximately 10% of the Company’s issued Shares (excluding Shares held in treasury) as at the date of this report). If passed, resolution 12 will authorise the Directors to allot further Shares, in addition to those which may be allotted under resolution 11, up to a maximum nominal amount of £505,099, which represents approximately 10% of the Company’s issued Shares (excluding Shares held in treasury) as at the date of thisreport). If both resolution 11 and resolution 12 are passed, authority will be granted to the Directors to allot Shares up to a maximum nominal amount of £1,010,198, which is a total of up to 20% of the existing issued ordinary share capital of the Company (excluding Shares held in treasury) as at the date of this report). The Board recognises that this authority is beyond the standard 10% authority typically sought by investment companies, but believes that the passing of both resolution 11 and resolution 12 is in shareholders’ interests given that: • the authorities would provide greater flexibility to allow the Company to take advantage of potential investment opportunities sourced by the Company’s Investment Manager; and • any Shares issued under these authorities will not be issued at prices less than the last published net asset value (“NAV”) per Share (adjusted for dividends) at the time of issue plus a premium to cover the costs of such issuance. If resolution 11 is passed but resolution 12 is not passed, the Directors will only be authorised to allot up to 10% of the existing issued ordinary share capital of the Company. Resolution 12 is conditional on resolution 11, so if resolution 11 is not passed resolution 12 will not be passed either. Each of the authorities granted pursuant to resolution 11 and 12 will expire at the conclusion of next year’s annual general meeting (unless previously renewed, varied or revoked by the Company at a general meeting). The Directors have no present intention to exercise the authorities conferred by resolution 11 and resolution 12. Resolutions 13 and 14: power to disapply pre-emption rights (special resolutions) Under the Act, when new Shares are allotted or treasury Shares are sold for cash, they must first be offered to existing shareholders pro rata to their holdings. Each of resolutions 13 and 14 will, if passed, give the Directors power, pursuant to the authorities to allot granted by resolutions 11 and 12 respectively, to allot Shares or sell Shares from treasury for cash without first offering them to existing shareholders in proportion to their existing holdings, up to a maximum nominal amount of £505,099 which represents approximately 10% of the issued ordinary share capital (excluding Shares held in treasury) as at the date of this report), which in aggregate amounts to £1,010,198, which represents approximately no more than 20% of the Company’s issued ordinary share capital (excluding Shares held in treasury) as at the date of this report). The powers granted by these resolutions will expire at the conclusion of the annual general meeting to be held in 2025 (unless previously renewed, varied or revoked by the Company at a general meeting). The Directors have no present intention to exercise the authorities conferred by resolution 13 and resolution 14. Any Shares will only be allotted or sold out of treasury without pre-emption rights applying, at a price that is not less than the latest published NAV (adjusted for dividends) together with an amount to cover the costs of any such issuance. Annual General Meeting – Recommendations Annual Report for year ended 31 March 2024 87 Resolution 15: Authority to make market purchases of the Company’s own shares (special resolution) At the AGM held on 21 September 2023, the Company was granted authority to make market purchases of up to 72,161,781 Shares for cancellation or holding in treasury. No shares have been bought back under this authority and the Company therefore has remaining authority to purchase up to 72,161,781 Shares. Thisauthority will expire at the forthcoming AGM. This resolution seeks authority for the Company to make market purchases of its own ordinary shares and is proposed as a special resolution. If passed, the resolution gives authority for the Company to purchase up to 75,714,411 of its ordinary shares, representing 14.99% of the Company’s issued ordinary share capital (excluding treasury shares) as at the date of this Notice of AGM. The resolution specifies the minimum and maximum prices which may be paid for any ordinary shares purchased under this authority. The authority will expire at the conclusion of the Company’s next annual general meeting. The Directors do not currently have any intention of exercising the authority granted by this resolution. The Directors will only exercise the authority to purchase ordinary shares where they consider that such purchases will be in the best interests of shareholders generally and when they are trading at a discount to the underlying net asset value per Share. The Company may either cancel any Shares it purchases under this authority or transfer them into treasury (and subsequently sell or transfer them out of treasury or cancel them). The Company does not have any options or outstanding share warrants. Resolution 16: Notice period for general meetings Resolution 16 is to be proposed as a special resolution to allow the Company to hold general meetings (other than annual general meetings) on at least 14 clear days’ notice. If approved, the resolution will be effective until the end of the Company’s next annual general meeting. The Board will consider on a case by case basis whether the use of the flexibility offered by the shorter notice period is merited, taking into account the circumstances, including whether the business of the meeting is time sensitive. Recommendations The Board considers that the resolutions relating to the above items of business are in the best interests of shareholders as a whole. Accordingly, the Board unanimously recommends to shareholders that they vote in favour of all of the resolutions to be proposed at the forthcoming AGM, as they intend to do in respect of their own beneficial holdings. 88 Gore Street Energy Storage Fund plc Notice of Annual General Meeting Notice is hereby given that the Annual General Meeting of Gore Street Energy Storage Fund plc will be held at the offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M 7SH on Wednesday, 18 September 2024 at10.00 am to consider the following resolutions of which resolutions 1 to 12 will be proposed as ordinary resolutions and resolutions 13 to 16 will be proposed as special resolutions: 1. To receive the Company’s annual financial statements for the financial period ended 31 March 2024 with the Directors’ report and auditor’s report on those financial statements. 2. To approve the Company’s policy to pay four interim dividends per year. 3. To approve the Directors’ Remuneration Report for the year ended 31 March 2024. 4. To re-elect Patrick Cox as a Director of the Company. 5. To re-elect Caroline Banszky as a Director of the Company. 6. To re-elect Malcolm King as a Director of the Company. 7. To re-elect Thomas Murley as a Director of the Company. 8. To re-elect Lisa Scenna as a Director of the Company. 9. To appoint EY LLP as the Company’s auditor to hold office from the conclusion of this meeting until the conclusion of the next annual general meeting at which accounts are laid before the Company. 10. To authorise the Directors to determine the auditor’s remuneration. 11. That the Directors be generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the “Act”) to exercise all the powers of the Company to allot ordinary shares in the Company up to an aggregate nominal amount of £505,099 (being 10% of the issued ordinary share capital at the date of this Notice) for a period expiring (unless previously renewed, varied or revoked by the Company in general meeting) at the conclusion of the next annual general meeting of the Company, save that the Company may, before such expiry, make offers or agreements which would or might require ordinary shares to be allotted and the Directors may allot ordinary shares in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired. 12. That, subject to the passing of resolution 11, and in addition to the authority granted pursuant to resolution 11 above, the Directors be generally and unconditionally authorised pursuant to section 551 of the Act to exercise all the powers of the Company to allot ordinary shares up to an aggregate nominal amount of £505,099 (which represents approximately 10% of the issued ordinary share capital at the date of this Notice) for a period expiring (unless previously renewed, varied or revoked by the Company in general meeting) at the conclusion of the next annual general meeting of the Company, save that the Company may, before such expiry, make offers or agreements which would or might require ordinary shares to be allotted and the Directors may allot ordinary shares in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired. 13. That, subject to the passing of resolution 11 above, the Directors be and are hereby empowered, pursuant to sections570 to 573 of the Act, to allot equity securities (asdefined in section 560(1) of the Act) and/or sell ordinary shares held by the Company as treasury shares for cash as if section 561(1) of the Act did not apply to any such allotment or sale, provided that this power shall be limited to the allotment or sale of equity securities up to an aggregate nominal amount of £505,099 (which represents approximately 10% of the issued ordinary share capital at the date of this Notice); and provided that this power shall expire at the conclusion of the next annual general meeting of the Company, save that the Company may, at any time prior to the expiry of such power, make an offer or enter into an agreement which would or might require equity securities to be allotted or sold after the expiry of such power, and the Directors may allot or sell equity securities in pursuance of such an offer or agreement as if such power had not expired. 14. That, subject to the passing of resolution 12 set out above, and in addition to the authority granted pursuant to resolution 13 above, the Directors be and are hereby empowered, pursuant to sections 570 to 573 of the Act, to allot equity securities (as defined in section 560(1) of the Act) and/or sell ordinary shares held by the Company as treasury shares for cash as if Section 561(1) of the Act did not apply to any such allotment or sale, provided that this power shall be limited to the allotment or sale of equity securities up to an aggregate nominal amount of £505,099 (which represents approximately 10% of the issued ordinary share capital at the date of this Notice); and provided that this power shall expire at the conclusion of the next annual general meeting of the Company save that the Company may, before such expiry, make offers or agreements which would or might require ordinary shares to be allotted and the Directors may allot ordinary shares in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired. Notice of Annual General Meeting Annual Report for year ended 31 March 2024 89 15. That the Company be and is hereby generally and unconditionally authorised for the purposes of section 701 of the Act to make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares of £0.01 each in the capital of the Company, to be cancelled or held in treasury for potential reissue, provided that: (a) the maximum aggregate number of ordinary shares that may be purchased is 75,714,411; (b) the minimum price (excluding expenses) which may be paid for each ordinary share is £0.01; (c) the maximum price (excluding expenses) which may be paid for each ordinary share is an amount equal to the higher of: (i) 105 per cent. of the average of the mid-market value of an ordinary share in the Company for the five business days prior to the day the purchase is made; and (ii) the higher of: a. the price of the last independent trade of an ordinary share; and b. the highest current independent bid for an ordinary share; and (d) the authority conferred by this resolution shall expire at the conclusion of the Company’s next annual general meeting save that the Company may, before the expiry of the authority granted by this resolution, enter into a contract to purchase ordinary shares which will or may be executed wholly or partly after the expiry of such authority. 16. That a general meeting, other than an annual general meeting, may be called on not less than 14 clear days’ notice provided that this authority shall expire at the conclusion of the Company’s next annual general meeting. By order of the Board Registered Office: First Floor, 16-17 Little Portland Street, London W1W 8BP Registered Number: 11160422 12 July 2024 Notice of Annual General Meeting 90 Gore Street Energy Storage Fund plc Explanatory Notes to the Notice of Meeting 1. Only those shareholders registered in the Company’s register of members at: 5.00 p.m. on 16 September 2024; or, ifthis meeting is adjourned, 5.00 p.m. on the day two days before the adjourned meeting, shall be entitled to attend, speak and vote at the meeting. Changes to the register of members after the relevant deadline shall be disregarded in determining the rights of any person to attend, speak and vote at the meeting. 2. Information regarding the meeting, including the information required by section 311A of the Companies Act, can be found at www.gsenergystoragefund.com 3. If you wish to attend the meeting in person, please bring your attendance card with you to the AGM. We recommend that you arrive by 9.45 am to enable us to carry out all the registration formalities to ensure a prompt start at 10.00am. If you have any special needs or require wheelchair access to the venue, please contact the Company Secretary at [email protected] in advance of the meeting. Mobile phones may not be used in the meeting and cameras and recording equipment are not allowed in the meeting. A member entitled to attend and vote at the meeting convened by the above Notice is entitled to appoint one or more proxies to exercise all or any of the rights of the member to attend and speak and vote in his/her place at the AGM. A proxy need not be a member of the Company. To be valid the forms of proxy, together with the power of attorney or other authority (ifany) under which it is signed or a notarially certified or office copy of the same, must be completed and returned in accordance with the instructions printed thereon to the office of the Company’s Registrar or delivered by hand (during office hours) to the same address as soon as possible and in any event so as to arrive by not later than 10.00 am on 16September2024. 4. If you are not a member of the Company but you have been nominated by a member of the Company to enjoy information rights, you do not have a right to appoint any proxies under the procedures set out in note 3. Please note11 below. You may appoint more than one proxy provided each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. To appoint more than one proxy, you may photocopy the form of proxy enclosed with this Notice of Annual General Meeting or alternatively, please contact the Company’s Registrar Computershare Investor Services PLC on 0370 707 1741 with a view to obtaining a duplicate form. You will need to state clearly on each proxy form the number of shares in relation to which the proxy is appointed. Failure to specify the number of shares to which each proxy appointment relates or specifying a number in excess of those held by the shareholder will result in the proxy appointment being invalid. If you wish your proxy to speak on your behalf at the meeting you will need to appoint your own choice of proxy (not the chairman) and give your instructions directly to them. All forms must be signed and should be returned together in the same envelope. shareholders can: Appoint a proxy or proxies and give proxy instructions by returning the enclosed proxy form by post or, alternatively, register their proxy appointment electronically. 5. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote. In the case of a shareholder which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form. If you have not received a proxy form and believe that you should have one, or if you require additional proxy forms, please contact Computershare Investor Services PLC on 0370 707 1741. 6. As an alternative to completing the hard-copy proxy form, you can appoint a proxy electronically by visiting www.investorcentre.co.uk/eproxy. You will be asked to enter the Control Number, the shareholder Reference Number (SRN) and PIN and agree to certain terms and conditions. These details can be found on the form of proxy. For an electronic proxy appointment to be valid, your appointment must be received by Computershare Investor Services PLC no later than 10.00 am on 16 September 2024. To appoint one or more proxies or to give an instruction to a proxy (whether previously appointed or otherwise) via the CREST system, CREST messages must be received by the issuer’s agent (ID Number 3RA50) not later than 48 hours before the time appointed for holding the meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp generated by the CREST system) from which the issuer’s agent is able to retrieve the message. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. 7. In the case of joint holders, where more than one of the joint holders completes a proxy appointment, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior). 8. Shareholders may change proxy instructions by submitting a new proxy appointment using the methods set out above. Note that the cut-off time for receipt of proxy appointments also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Computershare Investor Services PLC on Notice of Annual General Meeting Annual Report for year ended 31 March 2024 91 0370 7071741. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. 9. Appointment of a proxy does not preclude you from attending the meeting and voting in person. If you have appointed a proxy and attend the AGM in person, your proxy appointment will automatically be terminated. 10. A corporation which is a shareholder can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a shareholder provided that no more than one corporate representative exercises powers over the same share. 11. If you are a person who has been nominated under section146 of the Companies Act to enjoy information rights: You may have a right under an agreement between you and the shareholder of the Company who has nominated you to have information rights (the “Relevant shareholder”) to be appointed or to have someone else appointed as a proxy for the meeting. If you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a right under an agreement between you and the Relevant shareholder to give instructions to the Relevant shareholder as to the exercise of voting rights. Your main point of contact in terms of your investment in the Company remains the Relevant shareholder (or, perhaps, your custodian or broker) and you should continue to contact them (and not the Company) regarding any changes or queries relating to your personal details and your interest in the Company (including any administrative matters). The only exception to this is where the Company expressly requests a response from you. The rights relating to proxies set out above do not apply directly to nominated persons. 12. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution if no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting. 13. As at 5 pm on 11 July 2024, which is the latest practicable date before publication of this notice, the Company’s issued share capital comprised 505,099,478 ordinary shares of £0.01 each. Each ordinary share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights on that date is505,099,478. No shares are held in treasury. The Company’s website will include information on the number of shares and votingrights. 14. Any member attending the meeting has the right to ask questions. The Company must answer any question you ask relating to the business being dealt with at the meeting unless: answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information. The answer has already been given on a website in the form of an answer to a question. Itis undesirable in the interests of the Company or the good order of the meeting that the question be answered. 15. Under section 527 of the Companies Act, shareholders meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to theaudit of the Company’s accounts (including the auditor’s report and the conduct of the audit) that are to be laid before the AGM. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with the request. Where the Company is required to place a statement on a website under section527 of the Companies Act, it must forward the statement to the Company’s auditor not later than the time when it makes the statement available on the website. 16. Under section 338 of the Companies Act 2006, Shareholders meeting the threshold requirements set out in that section, may, subject to conditions, require the Company to give to shareholders notice of a resolution which may properly be moved and is intended to be moved at that meeting. The conditions are that: The resolution must not, if passed, be ineffective (whether by reason of inconsistency with any enactment or the Company’s constitution or otherwise). The resolution must not be defamatory of any person, frivolous or vexatious. The request: may be in hard copy form or in electronic form; must identify the resolution of which notice is to be given by either setting out the resolution in full or, ifsupporting a resolution sent by another shareholder, clearly identifying the resolution which is being supported; must be authenticated by the person or persons making it; and must be received by the Company not later than 6 August 2024, which is at least six weeks before the meeting. 17. Under section 338A of the Companies Act 2006, shareholders meeting the threshold requirements set out in that section may, subject to conditions, require the Company to include in the business to be dealt with at the meeting a matter (other than a proposed resolution) which may properly be included in the business (a matter of business). The conditions are that: The matter of business must not be defamatory of any person, frivolous or vexatious. The request: – may be in hard copy form or in electronic form; – must identify the matter to be included in the business by either setting it out in full or, if supporting a statement sent by another shareholder, clearly identifying the matter which is being supported; – must be accompanied by a statement setting out the grounds for the request; – must be authenticated by the person or persons making it; and – must be received by the Company not later than 6August2024, which is at least six weeks before the meeting. 18. Copies of the letters of appointment of the non-executive Directors are available for inspection at the Company’s registered office during normal business hours and at the place of the meeting from at least 15 minutes prior to the meeting until the end of the meeting. Notice of Annual General Meeting 92 Gore Street Energy Storage Fund plc 19. Voting on all resolutions will be conducted by way of a poll. As soon as practicable following the meeting, the results of the voting will be announced via a regulatory information service and also placed on the Company’s website. 20. Except as provided above, shareholders who have general queries about the meeting should telephone Computershare Investor Services PLC on 0370 703 6253. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. We are open between 09:00– 17:30, Monday to Friday excluding public holidays in England and Wales. No other methods of communication will be accepted. You may not use any electronic address provided in this notice of Annual General Meeting, or in any related documents for communicating with the Company for the purposes other than those expressly stated. Notice of Annual General Meeting Annual Report for year ended 31 March 2024 93 SFDR ANNEX IV Sustainable investment means an investment in an economic activity that contributes to an environmental or social objective, provided that the investment does not significantly harm any environmental or social objective and that the investee companies follow good governance practices. SFDR ANNEX IV Periodic Disclosure for the Financial Products Referred to in Article 8 of Regulation (EU) 2019/2088 (Annex IV) Product name: Gore Street Energy Storage Fund PLC Legal entity identifier: 213800GPUNVGG81G4O21 Environmental and/or social characteristics The EU Taxonomy is a classification system laid down in Regulation (EU) 2020/852, establishing a list of environmentally sustainable economic activities. That Regulation does not include a list of socially sustainable economic activities. Sustainable investments with an environmental objective might be aligned with the Taxonomy or not. Did this financial product have a sustainable investment objective? l l Yes l l ✖ No It made sustainable investments with an environmental objective:___ % in economic activities that qualify as environmentally sustainable under the EU Taxonomy in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy It promoted Environmental/Social (E/S) characteristics and while it did not have as its objective a sustainable investment, it had a proportion of ___ % of sustainable investments with an environmental objective in economic activities that qualify as environmentally sustainable under the EU Taxonomy with an environmental objective in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy with a social objective It made sustainable investments with a social objective: ___ % ✖ It promoted E/S characteristics, but did not make any sustainable investments Sustainability indicators measure how the environmental or social characteristics promoted by the financial product are attained. To what extent were the environmental and/or social characteristics promoted by this financial product met? Gore Street Energy Storage Fund invests in utility-scale energy storage systems. These assets support the transition to a low-carbon, sustainable economy through: • Enabling the integration of renewable energy sources into the power grid; • Avoiding carbon emissions from the power sector. 94 Gore Street Energy Storage Fund plc SFDR ANNEX IV Principal adverse impacts are the most significant negative impacts of investment decisions on sustainability factors relating to environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. How did the sustainability indicators perform? • Total renewable electricity stored: 26,232 MWh • Net CO 2 emissions avoided: 15,178 tCO 2 e …and compared to previous periods? Indicator FY 2022/23 FY 2023/24 Total renewable electricity stored 9,055 MWh 26,232 MWh Net CO 2 emissions avoided 3,580 tCO 2 e 15,178 tCO 2 e Previously stated as 3,590 tCO 2 e. The metric was recalculated using an improved methodology. More information will be provided in the fund’s upcoming ESG & Sustainability Report 2023/24. What were the objectives of the sustainable investments that the financial product partially made and how did the sustainable investment contribute to such objectives? N/A. The fund does not qualify as a sustainable investment. How did the sustainable investments that the financial product partially made not cause significant harm to any environmental or social sustainable investment objective? N/A. The fund does not qualify as a sustainable investment. How were the indicators for adverse impacts on sustainability factors taken into account? N/A Were sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights? Details: N/A The EU Taxonomy sets out a “do not significant harm” principle by which Taxonomy-aligned investments should not significantly harm EU Taxonomy objectives and is accompanied by specific Union criteria. The “do no significant harm” principle applies only to those investments underlying the financial product that take into account the EU criteria for environmentally sustainable economic activities. The investments underlying the remaining portion of this financial product do not take into account the EU criteria for environmentally sustainable economic activities. Any other sustainable investments must also not significantly harm any environmental or social objectives. Annual Report for year ended 31 March 2024 95 SFDR ANNEX IV How did this financial product consider principal adverse impacts on sustainability factors? The fund assesses and monitors the principal adverse impacts on sustainability factors as follows: Greenhouse gas emissions The fund excludes any investments in fossil fuels. Biodiversity The Investment Manager assesses the fund’s assets’ impact on biodiversity during the investment and construction process and takes appropriate action to avoid or remediate impacts to ensure compliance with local planning regulations. Pollution and waste The Investment Manager works closely with its partners during the construction process and over the lifecycle of the fund’s assets to avoid pollution and waste where possible. Human rights, social and employee matters The fund supports the UN Global Compact Principles and OECD Guidelines for Multinational Enterprises and does not tolerate any form of forced labour, child labour or severe human rights abuses in its supply chains. As part of the due diligence process, suppliers operating in ‘high risk’ sectors are required to provide details of their supply chain management approach and to confirm, on an annual basis, compliance with the principles outlined in the Investment Manager’s supplier code of conduct. The Investment Manager also has processes in place to ensure health & safety standards are met on-site. Monitoring of PAIs Although the fund anticipates fully monitoring and reporting on all relevant principal adverse impacts, data may not be fully, or in part, available on one or more of the fund’s investments. In instances where data is not fully available, the Investment Manager may make reasonable estimates as to the impact or rely on third party providers’ data to do so. In situations where data is not appropriate to rely available either in full or in part and where the Investment Manager deems it on estimates, the Investment Manager will explain in the fund’s reporting the rationale for such estimation. The table below summarises the fund’s performance as reported against the Principal Adverse Impact (PAI) mandatory and additional sustainability disclosures. The assessment included all assets in operation and under construction held by investee companies of the fund during the period of 1 April 2023 – 31 March 2024. 96 Gore Street Energy Storage Fund plc SFDR ANNEX IV Topic # Indicators Performance April 2023 – March 2024 Methodology SFDR mandatory disclosures: Due diligence on Principal Adverse Impacts (PAI) Climate and other environment-related indicators Greenhouse gas emissions 1 Total greenhouse gas (GHG) emissions (Scope 1, 2 and 3) 32,879 tCO 2 e Framework by the Greenhouse Gas Protocol 2 Carbon footprint 83.52 tCO 2 e / £M Formula prescribed by SFDR 3 GHG intensity of investee companies 1,661 tCO 2 e / £M Formula prescribed by SFDR 4 Exposure to companies active in the fossil fuel sector No exposure Review of relevant documentation 5 Share of non-renewable energy consumption and production 57.7 % Based on asset activity data, grid mix data 6 Energy consumption intensity per high impact climate sector 0.52 GWh / £M Based on energy consumption, financial data Biodiversity 7 Activities negatively affecting biodiversity- sensitive areas None identified Review of relevant documentation Emissions to water 8 Emissions to water 0 t / £M Review of site activities Waste 9 Hazardous waste ratio 0 t / £M Review of site activities Social and employee matters UNGC principles or OECD Guidelines for Multinational Enterprises 10 Violations of principles/guidelines None identified Review of relevant documentation 11 Lack of processes and mechanisms to monitor compliance No formal processes or mechanisms Review of relevant documentation Gender equality 12 Unadjusted gender pay gap N/A N/A Gender diversity 13 Board gender diversity 30% (weighted average ratio of female to male board members at investee company level) Based on board composition, financial data Controversial weapons 14 Exposure to controversial weapons (anti- personnel mines, cluster munitions, chemical and biological weapons) No exposure Review of relevant documentation Additional sustainability disclosures Air emissions 15 Emissions of air pollutants 0 t / £M Review of site activities Additional water and waste, and material emissions 16 Water usage and recycling 0 m 3 / £M Review of site activities 17 Non-recycled waste ratio 0 t / £M Review of site activities Human rights 18 Operations and suppliers at significant risk of incidents of child labour No exposure from activities directly under GSF’s control Review of relevant documentation 19 Operations and suppliers at significant risk of incidents of forced or compulsory labour No exposure from activities directly under GSF’s control Review of relevant documentation 20 Number of identified cases of severe human rights issues and incidents None identified Review of relevant documentation Sustainability indicators 21 Net CO 2 emissions avoided 15,178 tCO 2 e Based on battery charging data, grid carbon emissions factors 22 Total renewable electricity stored 26,232 MWh Based on import energy data, grid mix data Annual Report for year ended 31 March 2024 97 SFDR ANNEX IV Asset allocation describes the share of investments in specific assets. What were the top investments of this financial product? Largest investments Sector % of assets Country/region Cash Energy 11 N/A Infrastructure project 1 Energy 24 United States Infrastructure project 2 Energy 10 Great Britain Infrastructure project 3 Energy 8 Northern Ireland Further information is available upon request. What was the proportion of sustainability-related investments? 100% of the investments were sustainability-related. What was the asset allocation? #1 Aligned with E/S characteristics includes the investments of the financial product used to attain the environmental or social characteristics promoted by the financial product. #2 Other includes the remaining investments of the financial product which are neither aligned with the environmental or social characteristics, nor are qualified as sustainable investments. The category #1 Aligned with E/S characteristics covers: - The sub-category #1A Sustainable covers environmentally and socially sustainable investments. - The sub-category #1B Other E/S characteristics covers investments aligned with the environmental or social characteristics that do not qualify as sustainable investments. Investments #1 Aligned with E/S characteristics The list includes the investments constituting the greatest proportion of investments of the financial product during the reference period which is: April 2023 – March 2024 98 Gore Street Energy Storage Fund plc SFDR ANNEX IV Taxonomy-aligned activities are expressed as a share of: – turnover reflecting the share of revenue from green activities of investee companies. – capital expenditure (CapEx) showing the green investments made by investee companies, e.g. for a transition to a green economy. – operational expenditure (OpEx) reflecting green operational activities of investee companies. • Investments: 100% of the investments were allocated to battery energy storage systems and used to meet the environmental characteristics promoted by the fund. • Cash: Where the fund has raised capital, upon receipt of such capital and prior to its deployment into investment projects in accordance with the fund’s investment strategy, such new capital will comprise cash and cash equivalents. The fund’s cash balance as of 31 March 2024 was £60.7m, representing 11% of the fund. In which economic sectors were the investments made? All investments were made in the energy sector, specifically the battery energy storage sub-sector. No investments were made in sectors or sub-sectors of the economy that derive revenues from exploration, mining, extraction, production, processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels as defined in Article 2, point (62), of Regulation (EU) 2018/1999 of the European Parliament and of the Council. To what extent were the sustainable investments with an environmental objective aligned with the EU Taxonomy 1 ? N/A. The fund does not qualify as a sustainable investment. Did the financial product invest in fossil gas and/or nuclear energy related activities complying with the EU Taxonomy 1 ? Yes In fossil gas In nuclear energy X No The graphs below show in green the percentage of investments that were aligned with the EU Taxonomy. As there is no appropriate methodology to determine the taxonomy- alignment of sovereign bonds, the first graph shows the Taxonomy alignment in relation to all the investments of the financial product including sovereign bonds, while the second graph shows the Taxonomy alignment only in relation to the investments of the financial product other than sovereign bonds 1 Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they contribute to limiting climate change (“climate change mitigation”) and do not significantly harm any EU Taxonomy objective - see explanatory note in the left hand margin. The full criteria for fossil gas and nuclear energy economic activities that comply with the EU Taxonomy are laid down in Commission Delegated Regulation (EU) 2022/1214. To comply with the EU Taxonomy, the criteria for fossil gas include limitations on emissions and switching to fully renewable power or low-carbon fuels by the end of 2035. For nuclear energy, the criteria include comprehensive safety and waste management rules. Enabling activities directly enable other activities to make a substantial contribution to an environmental objective. Transitional activities are activities for which low-carbon alternatives are not yet available and among others have greenhouse gas emission levels corresponding to the best performance. Annual Report for year ended 31 March 2024 99 SFDR ANNEX IV are able investments with an environmental objective that do not take into account the criteria for environmentally sustainable economic activities under Regulation (EU) 2020/852. * For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures OpEx CapEx Turnover 0% 50% 100% 1. Taxonomy-alignment of investments including sovereign bonds Non Taxonomy-aligned OpEx CapEx Turnover 0% 50% 100% 2. Taxonomy-alignment of investments excluding sovereign bonds Non Taxonomy-aligned What was the share of investments made in transitional and enabling activities? N/A How did the percentage of investments that were aligned with the EU Taxonomy compare with previous reference periods? N/A What was the share of sustainable investments with an environmental objective not aligned with the EU Taxonomy? N/A What was the share of socially sustainable investments? N/A What investments were included under “other”, what was their purpose and were there any minimum environmental or social safeguards? N/A. All investments were allocated to battery energy storage systems. 100 Gore Street Energy Storage Fund plc SFDR ANNEX IV What actions have been taken to meet the environmental and/or social characteristics during the reference period? During the reporting period, the fund’s portfolio continued to support the global energy transition by increasing its operational capacity by 27% from 291.6 MW to 371.5 MW. The fund also strengthened its market position in the Republic of Ireland through the acquisition of the 75 MW Mucklagh project. Additionally, the Investment Manager managed the operational assets on behalf of the fund to ensure they remain functional and continue to provide a range of services to the grid, achieving over 93% availability over the reporting period. These services enable a higher penetration of renewable energy sources and help to balance demand and supply, thereby avoiding carbon emissions from fossil fuel-fired peaker plants. How did this financial product perform compared to the reference benchmark? N/A. Due to the bespoke nature of Gore Street Energy Storage Fund’s activities, the fund believes that there is no relevant sustainable designated reference benchmark to utilise. How does the reference benchmark differ from a broad market index? N/A How did this financial product perform with regard to the sustainability indicators to determine the alignment of the reference benchmark with the environmental or social characteristics promoted? N/A How did this financial product perform compared with the reference benchmark? N/A How did this financial product perform compared with the broad market index?` N/A ! Reference benchmarks are indexes to measure whether the financial product attains the environmental or social characteristics that they promote. Annual Report for year ended 31 March 2024 101 Alternative Performance Measures and Glossary In reporting financial information, the Company presents alternative performance measures, (“APMs”), which are not defined under the requirements of IFRS. The Company believes that these APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful information on the performance of the Company. The APMs presented in this report are shown below: 1. NAV TOTAL RETURN FOR THE YEAR INCLUDING DIVIDEND REINVESTMENT A measure of NAV performance for the financial year, considering both capital returns and dividends paid to shareholders. This factors in return on reinvestment of dividends. 31 March 2024 31 March 2023 NAV per ordinary share at end of year 107.05p 115.55p Dividends paid during the year 7.50p 7.00p Dividend reinvestment impact -0.44p 0.30p NAV per ordinary share at end of year including dividend reinvestment 114.11p 122.85p NAV per ordinary share at beginning of year 115.55p 109.11p NAV Total Return for the year -1.44p 13.74p NAV per ordinary share Total return for the year -1.2% 12.6% 2. NAV TOTAL RETURN SINCE IPO INCLUDING DIVIDEND REINVESTMENT A measure of NAV performance since IPO, considering both capital returns and dividends paid to shareholders during the period. This factors in return on reinvestment of dividends. 31 March 2024 31 March 2023 NAV per ordinary share at end of year 107.05p 115.55p Dividends paid since inception 36.50p 29.00p Dividend reinvestment impact 1.40p 4.29p NAV per ordinary share at end of year including dividend reinvestment 144.95p 148.84p NAV per ordinary share at IPO 97.67p 97.67p NAV Total Return since IPO 47.28p 51.17p NAV per ordinary share Total Return since IPO 48.4% 52.4% 3. SHARE PRICE TOTAL RETURN FOR THE YEAR INCLUDING DIVIDEND REINVESTMENT A measure of return to a shareholder holding a share for the financial year. Dividends per share reflect dividends declared during the period with ex-dividend date prior to year end. This factors in return on assumed reinvestment of dividends at ex-dividend date based on the spot share price at ex-dividend date. 31 March 2024 31 March 2023 Share price per ordinary share at end of year 64.50p 100.80p Dividends per share during the year 7.50p 7.00p Dividend reinvestment impact -1.41p -0.56p Share price per ordinary share at end of year including dividend reinvestment 70.59p 107.24p Share price per ordinary share at beginning of year 100.80p 113.00p Share price Total Return for the year -30.21p -5.76p Share price per ordinary share Total Return for the year -30.0% -5.1% Alternative Performance Measures 102 Gore Street Energy Storage Fund plc Alternative Performance Measures and Glossary 4. SHARE PRICE TOTAL RETURN SINCE IPO INCLUDING DIVIDEND REINVESTMENT A measure of return to a shareholder holding a share since IPO. Dividends per share reflect dividends declared during the period with ex-dividend date prior to year end. This factors in return on assumed reinvestment of dividends. 31 March 2024 31 March 2023 Share price per ordinary share at end of year 64.50p 100.80p Dividends per share since inception 38.50p 31.00p Dividend reinvestment impact -13.17p -0.94p Share price per ordinary share at end of year including dividend reinvestment 89.83p 130.86p Share price per ordinary share at IPO 100.00p 100.00p Share price Total Return since IPO -10.17p 30.86p Share price per ordinary share Total Return since IPO -10.2% 30.9% 5. SHARE DISCOUNT 31 March 2024 31 March 2023 Share price at year end 64.50p 100.80p NAV per ordinary share at year end 107.05p 115.55p Discount to NAV -42.55p -14.75p Discount to NAV % -39.7% -12.8% 6. OPERATIONAL DIVIDEND COVER A measure to demonstrate the Company’s ability to pay dividends to shareholders from the earnings generated by underlying operational investments. 31 March 2024 31 March 2023 Operational EBITDA £28.41m £27.77m Dividend paid during the year £36.38m £30.97m Operational dividend cover 0.78x 0.90x 7. TOTAL FUND DIVIDEND COVER FOR THE YEAR A measure to demonstrate the Company’s ability to pay dividends to shareholders from the earnings generated by underlying operational investments after accounting for expenses of the Company and its underlying intermediate holding companies, external interest costs and facility commitment fees. 31 March 2024 31 March 2023 Operational EBITDA £28.41m £27.77m Costs of the Company and intermediate holding companies -£10.64m -£14.27m Bank interest income in the Company £3.15m £3.63m Facility arrangement & commitment fees in GSES 1 -£0.62m -£0.29m External interest costs in GSES 1 -£0.07m £0.00m Total Fund EBITDA £20.24m £16.84m Dividend paid during the year (£) £36.38m £30.97m Total Fund dividend cover 0.56x 0.54x Total Fund EBITDA £20.24m £16.84m One off transaction costs and debt arrangement costs £1.45m £2.95m Total Fund EBITDA excluding one off costs £21.68m £19.79m Total Fund dividend cover excluding one off costs 0.60x 0.64x Annual Report for year ended 31 March 2024 103 Alternative Performance Measures and Glossary 8. DIVIDEND YIELD 31 March 2024 31 March 2023 Dividends per ordinary share paid during the year 7.5p 7.0p Share price at year end 64.5p 100.8p Dividend yield 11.6% 6.9% 9. ONGOING CHARGES FIGURE A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running the Company. This has been calculated and disclosed in accordance with the AIC methodology. 31 March 2024 31 March 2023 Total administrative and other expenses 7,925,906 9,881,402 Performance fee and non-recurring expenses -156,513 -2,501,163 Total ongoing expenses 7,769,393 7,380,240 Average NAV for the year 548,038,818 540,090,679 Ongoing charges figure 1.42% 1.37% 10. GEARING 31 March 2024 31 March 2023 Net asset value of the Company £540.70m £556.26m Aggregate group debt (A) £37.34m £0.00 Gross asset value (B) £578.04m £556.26m Gearing (A/B) 6.5% 0.0% 104 Gore Street Energy Storage Fund plc Alternative Performance Measures and Glossary • 50Hertz: One of the four transmission system operators in Germany responsible for operating and managing the electricity grid. • Ancillary services: Support services necessary for maintaining the stability, reliability, and quality of electricity supply. These services encompass activities such as frequency regulation, voltage control, reactive power support, and black start capability. • Automatic Frequency Restoration Reserve (aFFR): This service is designed to support FCR should it fail to deliver the flexibility needed to maintain the grid by maintaining a reserve in the power grid that helps to keep the grid frequency stable. • Balancing Mechanism: A market mechanism enabling grid operators to balance electricity supply and demand in real- time, ensuring system stability and reliability. • CAISO: California Independent System Operator. It functions as the ISO for the majority of California’s electric grid, overseeing the transmission and distribution of electricity within the state. • California Public Utilities Commission (CPUC): A regulatory agency that regulates privately owned public utilities in California. • Capacity Market: A market mechanism designed to ensure sufficient electricity generation capacity is available to meet the demand. Generators are compensated for their capacity to be available rather than solely for the electricity they generate. • Commercial Manager: Gore Street Operational Management Limited. • Commercial Operations Date (COD): The official date when an energy storage system begins its commercial operations and starts consuming and supplying electricity to the grid. • Contingency Reserve Service (ECRS): An ancillary service to ensure the availability of reserves in case of contingencies or emergencies, thereby assisting in maintaining grid stability. • Discounted Cash Flow (DCF): A financial valuation method. • DS3: Delivering a Secure, Sustainable Electricity System. The program implemented by both Transmission System Operator (TSO) for the single Irish grid with the aim of increasing the renewable penetration level in a safe and secure manner. • D-suite: A term collectively referring to Dynamic Regulation (DR), Dynamic Containment (DC), and Dynamic Moderation (DM) services. • Dynamic Containment (DC): A service offered by electricity grid operators to address sudden imbalances in supply and demand, usually in response to significant disturbances or faults. • Dynamic Moderation (DM): A service provided by electricity grid operators to manage smaller imbalances in supply and demand, often in response to minor fluctuations or disturbances. • Dynamic Regulation (DR): A real-time service to actively manage and regulate grid frequency, ensuring a stable and balanced power system. • EirGrid: The TSO in Republic of Ireland. Responsible for the operation and management of the electricity transmission system in the Republic of Ireland as part of the All-Ireland power system. • Enduring Auction Capability platform (EAC): A platform provided by the National Grid, the ESO in GB, that enables market participants to bid on opportunities to deliver multiple frequency response services simultaneously. • Energisation: The process of supplying electricity to an energy storage system after construction. • Electricity Forward Agreement (EFA): Refers to load profiles when trading on an electricity market. • EPC: Engineering, Procurement, and Construction. Refers to a project delivery approach in which a single entity (EPC contractor) is responsible for the design, procurement, and construction of a project, providing a comprehensive and integrated solution. • ERCOT: Electric Reliability Council of Texas. It serves as the independent system operator (ISO) for the electric grid in Texas, responsible for ensuring the flow of electricity and maintaining grid reliability. • Fast/Firm Frequency Response (FFR): A rapid and automated response to changes in grid frequency, aiding in the stabilisation of the grid within milliseconds or seconds. • Frequency Control Reserve (FCR): A mechanism to regulate and control grid frequency within an acceptable range. • Investment Manager: Gore Street Capital Limited. • ISO: ISO stands for Independent System Operator an entity responsible for the operation of a power grid or electrical transmission system. • Manager: Refers to both the Investment Manager and the Commercial Manager. • Mega Watt (MW): Refers to a unit of power equal to one million watts. It is used to describe the output of electricity. • Mega Watt Hour (MWh): Refers to a unit of energy. It represents the amount of energy generated or consumed over one hour at a rate of one megawatt. • National Grid ESO: National Grid Electricity System Operator. It is responsible for the operation and management of the electricity transmission system in Great Britain. Glossary Annual Report for year ended 31 March 2024 105 Alternative Performance Measures and Glossary • O&M: Operations and Maintenance. Refers to the activities and tasks involved in operating and maintaining an operational energy storage system. • Regulation Up: A grid balancing mechanism used during periods when frequency drops, a battery can either discharge or reduce its charging schedule in order to provide this service. • Regulation Down: A grid balancing mechanism used during periods when frequency rises, a battery can either charge or increase its charging schedule in order to provide this service. • Responsive Reserve Service (RRS): This is a type of Ancillary Service that ERCOT procures to arrest frequency deviations in the grid. RRS can be further split into Primary Frequency Response, Under Frequency Response, and Fast Frequency Response. • Soni: Is the TSO for Northern Ireland. Responsible for the operation and management of the electricity transmission system in Northern Ireland as part of the All-Ireland power system. • System Non- Synchronous Penetration (SNSP): Is an expression of the level of non-synchronous generation (e.g. solar/wind) and interconnector imports compared to the system demand and interconnector exports. • TNUoS: Transmission Network Use of System charges. These charges are imposed on users of the electricity transmission system for accessing and utilising the transmission infrastructure. Annual General Meeting – Recommendations 106 Gore Street Energy Storage Fund plc Shareholder Information Webpage The Company’s website has copies of all Company documents, as well as links to the Company’s Regulated Information Service announcements. Association of Investment Companies The Company is a member of the Association of Investment Companies: www.theaic.co.uk. Alternative Investment Fund Managers Directors (“AIFMD”) disclosures The Company is required to make certain disclosures to comply with the FCA Handbook and other regulations. These are included in this report or are made available on the Company’s website. Leverage The Company’s leverage exposures as at 31 March 2024 were: Gross method: 88.93% Commitment method: 89.12% Dividends Dividends are paid quarterly, usually in January, April, July and October. Share liquidity Average weekly share volumes for the twelve months ended 31 March 2024 was 5,360,912. Annual General Meeting – Recommendations Annual Report for year ended 31 March 2024 107 Directors and Advisors Directors Pat Cox – Chair Caroline Banszky Max King Tom Murley Lisa Scenna Registered office 16-17 Little Portland Street First Floor London W1W 8BP AIFM Gore Street Capital Limited 16-17 Little Portland Street First Floor London W1W 8BP Investment Manager Gore Street Capital Limited 16-17 Little Portland Street First Floor London W1W 8BP Commercial Manager Gore Street Services Limited 16-17 Little Portland Street London W1W 8BP Joint Corporate Broker J.P. Morgan Cazenove Floor 29 25, Bank Street London E14 5JP Administrator Apex Fiduciary Services (UK) Limited 6th Floor 125 London Wall London EC2Y 5AS Company Secretary Gore Street Services Limited 16-17 Little Portland Street First Floor London W1W 8BP Registrar and Receiving Agent Computershare Investor Services Plc The Pavilions Bridgewater Road Bristol BS13 8AE Sponsor and Joint Corporate Broker Shore Capital Limited Cassini House 57 St James Street London SW1A 1LD Depositary The Scalpel 18th Floor 52 Lime Street London EC3M 7AF Independent Valuer BDO LLP 55 Baker Street London W1U 7EU Independent Auditor Ernst & Young LLP 25 Churchill Place Canary Wharf London E14 5EY Legal Advisor Stephenson Harwood LLP 1 Finsbury Circus London EC2M 7SH Dealing Codes ISIN: GB00BG0P0V73 SEDOL: BG0P0V7 Ticker: GSF Global Intermediary Identification Number (GIIN) ZAX2MB.99999.SL.826 Legal Entity Identifier (LEI ) 213800GPUNVGG81G4O21 www.gsenergystoragefund.com The paper stock used in this report is manufactured at a mill that is FSC accredited. The manufacture of the paper in this report has been Carbon Balanced. The print factory is FSC accredited and has the Environmental ISO 14001 accreditation.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.