Annual Report • Apr 23, 2025
Annual Report
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Gresham House Energy Storage Fund plc (GRID) Annual Report and Financial Statements for the year ended 31 December 2024 Strategic Report Overview Highlights 4 Fund summary 8 Chair’s statement 9 Contents Portfolio Governance Accounts Independent auditor’s report 87 Statement of Comprehensive Income 95 Statement of Financial Position 96 Statement of Changes in Equity 97 Statement of Cash Flows 99 Notes to the Financial Statements 100 Alternative Performance Measures 121 Other information Company information 126 Glossary 127 Sustainable Finance Disclosure Regulation (SFDR) 130 Investment Manager’s review see page 12 Investment Portfolio see page 18 Board of Directors see page 60 Sustainability report see page 39 Three-year Plan 15 Market and nancial review Market overview 2024 27 Financial review 31 Sustainability The Manager’s team 62 Corporate governance report 65 Nomination Committee report 70 Audit Committee report 71 Management Engagement Committee report 74 Remuneration Committee report 75 Directors’ remuneration report 76 Additional statutory and corporate governance information 81 Task Force on Climate-related FinancialDisclosures (TCFD) 41 Risk and S.172reporting Principal risks and uncertainties 51 S.172 reporting 56 Gresham House GRID Annual Report 2024 2 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Strategic Report Overview Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 2. Unaudited. Operational MW and MWh here are the monthly-weighted average capacities over the year 1. Unaudited. Refers to revenues generated by the assets in the portfolio. Alternative Performance pages 121 to 124 NAV £622.2mn -15.9% Dec 23 £740.1m n Dec 24 £622.2mn Highlights NAV per share 109.35p -15.3% Dec 23 129.07p Dec 24 109.35p Operational portfolio size 2 945MW +37.0% Dec 22 550MW / 598MWh 1 Avg. 22 441MW / 490MWh Dec 23 690MW / 788MWh Avg. 23 607MW / 672MWh Dec 24 845MW / 1,207MWh Avg. 24 778MW / 988MWh Apr 25 945MW / 1,447MWh Progress with completion of 1,072MW portfolio +88% Dec 23 64% Dec 24 79% Apr 25 88% Revenues of underlying investment portfolio 1 £46.5mn +20.1% Dec 23 £38.7mn Dec 24 £46.5mn Gresham House GRID Annual Report 2024 4 Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review and calculated on pages 121 to 124 4. Sum of debt and cash at the Company and its investments excluding shareholder loans, unaudited. Debt excludes shareholder loans Underlying investment portfolio revenues per operational MW and MWh 3 59,800 / 47,100 £ per MW per annum / £ per MWh per annum Dec 23 63,800 / 57,600 Dec 24 59,800 / 47,100 EBITDA of underlying investment portfolio 3 £29.1mn +12.7% 2023 £25.8mn 2024 £29.1mn Assets under tolling arrangement MW under tolling arrangements, out of the total 568MW contracted under the two-year tolling arrangement with Octopus Energy 360MW Dec 23 0MW Dec 24 310MW Apr 25 360MW Portfolio combined balance sheet metrics 4 Debt Dec 23 £110 mn Dec 24 £150mn Cash Dec 23 £43.7mn Dec 24 £39.5mn Net debt Dec 23 £66.3mn Dec 24 £110.5 mn Net debt to NAV 2023 9% 2024 18% Gresham House GRID Annual Report 2024 5 Highlights Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review Tolling arrangement with Octopus Energy: The Company chose to reduce down-side merchant exposure due to the low revenue environment caused by high skip rates in NESO’s BM, leading to our landmark tolling arrangement with Octopus Energy which closed in June 2024 and contracted 568MW of capacity for two years. 310MW had started their tolling agreements as of Asset disposals: The Manager has engaged with a number of counterparties to progress a transaction to validate NAV and to improve liquidity. This activity is ongoing; a deal with initial terms agreed is in the late stages of due diligence. Manager’s fee: Renegotiation of fees began in 2024 and concluded in Q1 2025, changing the basis of the fee calculation to an average of NAV and Market Cap, from NAV and reducing fees by 28% 11 . Capital Markets Day and Three-year Plan announcement: In November, we hosted a Capital Markets Day and announced a Three-year Plan which targets a £150mn annual EBITDA run-rate by the end of 2027. It involves adding 1,500MWh of battery capacity projects totalling 694MW in grid capacity, and the sourcing of additional alternative revenues. Progress is reported on in the Three-year Plan section. 2025 of 41.05p and current NAV per share of 109.35p BESS utilisation in NESO’s Balancing Mechanism (BM) in H1 2024: In Q1 2024, the BESS sector saw very low utilisation of roughly 6.7% 8 in the BM operated by NESO’s 9 control room. This trough contributed to unexpectedly low revenues. BESS utilisation in NESO’s BM in H2 2024: The improvement in revenues higher utilisation in the BM as well as increased electricity demand, higher renewable penetration, less baseload supply (decommissioning of last coal plant) and NESO’s launch of other BESS-centric services such as Quick Reserve in December. Borrowings: As of 31 December 2024, total portfolio external borrowings were £150mn and cash in the Company and the portfolio stood at £39.5mn 10 , leaving overall net debt of £110.5mn debt to GAV was 14% and net debt to NAV was 18%, also remaining below the investment policy restriction to keep total external debt below 50% of NAV. Our total available facilities were £195mn, down from £335mn as of 31 December 2023, following the cancellation of £140mn of the facilities during the year. 8. Balancing Mechanism: How to calculate in-merit dispatch rates for BESS – Research | Modo Energy 9. NESO is the National Electricity System Operator, responsible for ensuring the supply of electricity in Great Britain matches demand. It was previously National Grid ESO but is now government owned 10. Unaudited Energy storage capacity in megawatt-hours (MWh) 6 MWh increased 53% to 1,207MWh 226MWh via new projects and 193MWh existing projects. Operational portfolio average battery duration (the ratio of portfolio MWh to portfolio MW) Duration rose 25.1% to 1.43h from 1.14h. Underlying portfolio revenues 7 £38.7mn), despite being down at the half-year stage, as second half revenues rose 58.1% year over year to £28.6mn the decline in H1. Underlying portfolio EBITDA 7 increased 12.4% to £29.1mn, EBITDA margin of 62%. Buybacks: 4,380,555 shares repurchased (0.8% of shares outstanding) at an average price of 45.6p. 6. Megawatt-hours (MWh) are a measure of energy and in this context are a measure of the energy that can be stored in the Company’s portfolio of battery energy storage systems (BESS) 7. Alternative Performance Measures, including calculated on pages 121 to 124 Operational highlights (as of 31 December 2024) Net Asset Value (NAV) NAV declined 15.9% to £622.2mn compared with a year ago (31 December NAV per share declined 15.3% to 109.35p compared with a year ago The decline was primarily driven by lower third-party forecast revenue curves. NAV per share declined a little less than NAV due to share buybacks in H1 2024. The Financial review section provides a full analysis. Grid connection capacity in megawatts (MW) 5 MW rose 22% to 845MW year over with the following projects energising – York (50MW) in January – Penwortham (50MW) in May – Nevendon extension (5MW) in October – Elland (50MW) in November 5. Megawatts (MW) are a measure of the rate of Gresham House GRID Annual Report 2024 6 Highlights Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review Falling battery prices further improve cost eectiveness and capital eciency: Battery pack prices fell c.20% in 2024 according to BNEF 17 with innovation expected to drive further falls. Coupled with the CP30 Action Plan, this most likely cements batteries as technology for both short and long- Batteries are the optimal technology for Long-Duration Energy Storage (LDES) in GB: LDES provides energy electricity generation for longer periods, with the government targeting 4GW to 6GW of LDES by 2030. The Manager and other GB battery project owners commissioned LCP Delta to report on the suitability of BESS for LDES. LCP Delta published its report 18 in April 2025, highlighting BESS of durations up to solution when compared with alternative technologies such as pumped storage, Liquid Air Energy Storage (LAES) or Compressed Air Energy Storage (CAES). GRID is the largest owner and operator of BESS in GB, with the operational portfolio representing 17% of the market by MW. The next largest owner holds 8% of operational projects 19 . about.bnef.com/ blog/lithium-ion-battery-pack-prices-see- largest-drop-since-2017-falling-to-115-per- kilowatt-hour-bloombergnef/ 18. LCP Delta report on BESS suitability for LDES https://greshamhouse.com/ wp-content/uploads/2025/04/Value-of-long- duration-BESS.pdf 19. As of the end of Q4 2024 according to Market highlights Progress on skip rates in NESO’s BM. In a breakthrough for the BESS sector, NESO released a statement in October committing to improve BESS utilisation in the BM 12 . It also admitted, via a report it commissioned 13 , that BM skip rates 14 are far too high. Change of government in 2024 is positive for BESS: The current Labour government is committed to decarbonising the UK’s electricity by 2030. It coined the term Clean Power 2030 or CP30 and released a CP30 Action Plan 15 report detailing its ambitions. A key change to prior policy renewable generation deployment was already on track to meet CP30, intermittency associated with renewable generation was not. The focus on 2030 means less mature technologies 16 are no longer the priority and a political realism about the commercial viability of alternatives to BESS in the near term underscores Li-Ion BESS as the preferred technology solution. 12. neso.energy/news/our-commitment-improve- battery-dispatch-rates-balancing-mechanism BM Skip Rates Phase 2 Report 14. The skip rate is known as 1 - utilisation rate gov.uk/ government/publications/clean-power- 2030-action-plan 16. Alternatives included unproven, expensive and/or slow-to-build technologies that could at best emerge in the later 2030s, including nuclear small modular with carbon capture utilisation and storage, and even other forms of storage such as compressed or Gresham House GRID Annual Report 2024 7 Highlights Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review Summary of portfolio today Our Investment Portfolio and Pipeline consists of 35 BESS projects across GB, of which 27 are operational today. The portfolio’s current operational capacity is 945MW / 1,447MWh and is set to reach 1,072MW / 1,701MWh after the release of West Bradford (87MW / 174MWh) and Shilton Lane (40MW / 80MWh) expected in Q2 2025. As part of the Three-year Plan we are planning to drive further capacity growth with duration extensions on existing assets alongside the build-out of new pipeline assets through 2025-2027. The further construction plans are subject to the completion of the ongoing debt Investment Portfolio for full details on the Investment Portfolio and Pipeline. Fund summary Investment objective Our Investment objectives aim Income from an attractive and sustainable dividend over the long term, from projects located in Great Britain, and overseas. Capital growth through the re-investment of net cash generated in excess of dividends paid. Investment Manager (the “Manager”) Gresham House Asset Management Limited (GHAM) is the Manager and is wholly owned by Gresham House Limited (formerly Gresham House plc), a specialist alternative asset manager focused on sustainability (GHAM website). The Company’s assets are consistently amongst the top-performing BESS. The Manager has achieved this by working all emerging revenue opportunities to drive wider earnings opportunities for the Company’s assets. In addition to running our business, the Manager engages with regulators, leading sector participants and the media to promote the sector and its vital importance for energy security, resilience and net zero targets. Gresham House GRID Annual Report 2024 8 Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review In parallel, we are encouraged that the subject of skip rates is now recognised as a problem at the highest levels of government and that NESO has publicly admitted skip rates have been too high, committed to improving its performance and proactively engaged with BESS sector leaders. Our work is not done, however. The pace of change in the grid control room and underpinning systems remains very slow and the Board and Manager will continue to highlight the skip rate issue until it is fully resolved. Nonetheless, it is encouraging to see a positive trend during 2024 and evidence of real progress. The tolling arrangement with Octopus Energy announced during the year provides greater earnings diversity, away from NESO, and downside protection should a low revenue period return in future. We have spoken on several occasions about the regulatory risk that has manifested, which relates to the national control room owned and operated by NESO, whose task is to balance supply and demand in real time via the BM. NESO did not, and seemingly could not, utilise batteries properly due to a lack of appropriate systems and technical infrastructure, leading to the very low utilisation (or “skipping”) of batteries. The Board and the Manager have had to work very hard to get this issue noticed and addressed, working with peers and trade associations, NESO, government policy makers, Ofgem and the media, as this issue was not well understood beyond the BESS industry. It is therefore encouraging to revisit things now, at the start of 2025, in the context of an improving revenue backdrop and greater government and regulatory support for our sector. Labour’s current focus on Clean Power by 2030 (CP30) has woken everyone up to the fact that batteries are the only near-term available and economically viable form of storage to balance renewable supply with demand. We have articulated an income and growth strategy since the Company’s IPO which we delivered on through 2023. of 2024 meant that the Board had to suspend its dividend policy to navigate a low revenue environment. This allowed us to preserve capital to manage our debt obligations, complete construction on projects in progress and complete the upgrade of some existing sites to accelerate near-term revenues. While we have consistently achieved strong growth in operational capacity, revenues per unit of installed capacity have been much more volatile than anticipated. In the last four years, we have achieved compound operational capacity growth of 39% p.a., rising from an average of 207MW in 2020 to 778MW in 2024. We expect further growth of 25-30% in 2025, as capacity heads above 1,000MW. In contrast, revenues per MW (or per with highs and lows in 2024 of £91k/MW/yr (December) and £34k/MW/yr (February) respectively in terms of revenues per MW expressed on an annualised basis. In reality, our revenues were impacted by counterparty concentration risks NESO, failing to move quickly enough with the modernisation programme of its control room to be able to properly utilise batteries in its BM. On behalf of the Board, I am pleased to present the Annual Report and Accounts of Gresham House Energy Storage Fund plc (“GRID”, the “Fund” or the “Company”) for the year ended 31 December 2024. A challenging year with an improving strategic context This was a particularly challenging year for the Company, shareholders and the wider GB BESS sector. The continued share price discount to NAV has been are thankful for the continued support of and belief in the long-term strategy. Despite the challenges in the year, we the second quarter and closed the year at a high, posting over 50% growth in operational battery capacity (MWh) in 2024 and enjoying revenues in December which, if annualised, would set a record for the portfolio. Chair’s statement Gresham House GRID Annual Report 2024 9 Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review At our Capital Markets Day on 27 November 2024, the Manager presented our plans for the three years from 2025 to 2027. The plan has three elements. Two augmentations and new pipeline. These represent the majority of the targeted increase in EBITDA from c.£50mn in 2025 to the £150mn run-rate target announced for the end of 2027, without the need for opportunities which the Manager has and EBITDA. Full details of the key elements of the plan are provided in the Three-year Plan section on pages 15 to 16. To make the Three-year Plan possible, we are in the process of sourcing debt existing debt and provide additional capital for augmentations and the new pipeline. Allocation of incremental capital to extend the duration of our existing portfolio is highly accretive to both earnings and NAV per share. As mentioned above, long-term revenue contracts are integral to unlocking new investment. This debt is expected to be at lower margins than existing debt which, combined with substantially lower battery prices, makes our new investments highly accretive to shareholder returns. The Company’s repositioning is being achieved by securing long-term contracted revenues with investment portion of the Company’s operational if, as it did earlier in the year, the trading backdrop weakens. The contracts revenue base whilst still ensuring some merchant upside. Improving portfolio performance through the year Our portfolio of assets generated net revenue of £46.5mn and £29.1mn of EBITDA in 2024. Throughout 2024, each quarter outperformed those preceding it, culminating in December 2024 being the best month in two years for the whole sector. The revenue mix has increasingly shifted to trading, as the long-expected saturation of the Frequency Response market began at the end of 2022. While revenues were under pressure for large parts of the year, the portfolio has meaningfully and consistently outperformed the rest of the market, as discussed in the Financial review section. A Three-year Plan to drive signicant accretive value mentioned above will, once concluded, unlock our Three-year Plan. As we announced with our interim results, we now share additional valuation metrics such as enterprise value 20 (EV) to sales, EV to EBITDA and EV to MW, alongside NAV and NAV per share, to help investors value our shares in more traditional ways. These metrics are presented in the Financial review section. The Board is encouraged that the transaction announced on 25 March 2025 under which Drax Power plc intend to purchase HEIT for £199.9mn, Foresight Group LLP, demonstrates the underlying value of BESS. Factoring their higher proportion of debt and slightly this transaction strongly supports the valuations in the Company’s accounts for 31 December 2024. Increased contracted revenues will fundamentally reposition the business Our focus on increasing contracted revenues will allow us to fundamentally reposition the business, supporting sustainable dividends which remains a debt facilities during Q2 2025 will be the catalyst for this. 20. Enterprise value is the sum of the market capitalisation and total net debt Lower forecast revenue curves impacted asset valuations The Company’s NAV and NAV per share fell to £622.2mn and 109.35p per share respectively, from £740.1mn and 129.07p at the end of 2023. The movement in the valuation was driven by a downward revision to forecast revenue curves provided by the independent consultants. This impact was increased by the replacement of one of the forecasters used at the start of 2024 with a consultant with a more conservative set of forecasts at the half-year stage. The resulting reduction in NAV therefore revenue assumptions, including a shaving that have become apparent in the BM, and their expected resolution over time. Valuations are discussed in more detail in the Investment Manager’s report. Existing discount rates for merchant revenues and Capacity Market revenues were unchanged in 2024 and a discount rate of 8.5% was applied to the newly introduced tolling revenues. This has had average discount rate, reducing it to 10.73% from 10.87% as of 31 December 2023. Gresham House GRID Annual Report 2024 10 Chair’s statement Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review Delivering our plan has positive implications for shareholders In the last year, investors across the BESS and renewables sectors have been through a torrid time. We have taken steps to address our downside revenue vulnerabilities while than currently contracted to be able to continue to grow. This should unlock growth in distributable income and in our NAV. The Board and Manager are wholly focused on delivering the Three-year Plan, with very positive implications for shareholders. We look forward to reporting progress on the Three-year Plan and on further improvements in battery utilisation in the BM as promised by NESO. The Board, the Manager and policy makers are clear that the BESS agenda is key to the UK’s critical national infrastructure and is becoming an accepted cornerstone of the UK energy transition ecosystem, and GRID retains its position as leader in the BESS sector. John Leggate CBE, FREng Chair 22 April 2025 Capital allocation post-renancing operations for distributions. expect to have meaningful and growing dividends and/or share buybacks as the Three-year Plan unfolds. The Board looks forward to announcing the details once the Increasing the Manager’s alignment with shareholders To improve alignment between the Manager, the Company and investors, the Board initiated a full review of the Manager’s fee, being cognisant of the need to protect short, medium and long-term value for investors. Those discussions were concluded in early Q1 2025 and will realise savings of 28% p.a. from the management fee. 21 21. Assumes the closing share price of 41.05p on 31 January 2025 and the current NAV per share of 109.35p Gresham House GRID Annual Report 2024 11 Chair’s statement Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review In the Company’s interim results announcement on 30 September 2024, we indicated that annualised operational portfolio EBITDA could reach c.£45mn, once all projects under construction had been commissioned 24 . We based this calculation on merchant revenues of £45,000 per MW per annum from uncontracted assets (i.e. those not under tolling agreements). The better trading conditions in fact resulted in annualised operational portfolio revenues per MW exceeding £66,000 per MW in the second half of 2024. While rising installed capacity supported growth, improved operational portfolio revenues and EBITDA have also been driven by a recovery in the wholesale market backdrop and better dispatching of batteries in the BM, with December being the strongest month of 2024. This improved trading has continued so far into 2025. If this is sustained, GRID is likely to be well placed to exceed the £45mn EBITDA referred to above. 24. As referenced most recently in the will be two-thirds contracted once all tolling agreements are in place and assuming a merchant revenue rate on 504MW of uncontracted assets of £45k/MW/yr To address the revenue challenges faced at the start of the year, we agreed a landmark tolling arrangement with Octopus Energy, which was signed in June 2024 and priced above prevailing market levels. The tolling arrangement was the with more visibility, while diversifying the Company’s revenues away from sole reliance on the national wholesale market and the BM. The tolling agreement with Octopus contracted 568MW / 920MWh of our capacity, representing a little over half of the Company’s portfolio, to maintain a balance between contracted and merchant revenues and allow us to also participate in a market recovery. We were therefore pleased to see improvements in merchant revenues as the year progressed. Improving merchant revenues could also underpin better terms in any further tolling arrangements, so this recovery is also encouraging for future contracting opportunities. Revenues for the year from the underlying portfolio were £46.5mn, driving year-on- year underlying portfolio EBITDA growth of 23 , with by growth in second-half revenues. This growth was also supported by the increase in operational capacity mentioned above. 23. Alternative Performance Measures, including calculated on page 121 to 124 The start of the year presented a challenging revenue backdrop, with BESS BM, which is operated by NESO’s 22 control room. The 2023 Annual Report (published in April 2024) outlined the Company’s strategic plan, which highlighted our focus out more duration extensions instead of only new project connections, as this minimised capital requirements and mitigated delays, at a time that new project connections were proving challenging due to construction programme extensions often caused by network operators. In parallel, we amended the Company’s debt facilities in April 2024 to provide greater protection against any further worsening of the revenue backdrop which, in the outturn, troughed in Q1 2024. The decision to suspend dividends. The combination of these actions has enabled us to progress the completion of the current construction programme at lower leverage levels. 22. NESO is the National Energy System Operator (ex. National Grid ESO prior to being nationalised during 2024) 2024 was a year of signicant activity, as we continued to grow capacity and worked to set the Company up for success as the market recovered following an especially weak rst quarter. We added 155MW and 419MWh of connection and battery capacity respectively during the year, through a combination of new project connections and battery duration extensions and took operational battery capacity to over Further project completions have followed since the year end. The Company now 1,447MWh today, representing 84% growth in operational battery capacity (expressed in MWh) since the end of 2023. Further details on the portfolio, including case studies, can be found in other sections of this report. Investment Manager’s review Gresham House GRID Annual Report 2024 12 Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review Electricity prices can turn negative during periods of excess renewables generation, as curtailment of generation is needed to reduce supply to the level of demand prevalence of negative prices increased prices 25 turning negative for 176 hours and intraday system prices being negative for 536 hours, representing a 25% year- negative system prices). This BESS opportunity will only increase with greater renewable penetration. Indeed, the consultancy Modo Energy is forecasting up to 1,000 hours a year in 2027 26 . The volume of storage needed on the system just to catch up with the increase in renewable generation is 25. https://modoenergy.com/research/gb- battery-energy-storage-markets-2024-year- in-review-great-britain-wholesale-balancing- mechanism-frequency-response-reserve 26. Negative Prices – why do they happen and why will they continue to grow Research | Modo Energy Outlook: the investment case remains strong and market fundamentals arepromising The investment case for BESS remains strong, with rapidly rising renewable energy penetration continuing. As renewable electricity generation tends to range from 0% to 200% (i.e. twice the level) of demand, this is causing increasing challenges for NESO’s control room to balance supply and demand via its BM framework, which BESS are very well placed to address and earn from. The team continues to make progress on the next phase of the pipeline. Subject to are expecting to begin works on further duration extensions on existing assets and to build out new two-hour projects, the full details of which will be provided at the time Progressing a transaction to underpin NAV In the course of 2024, we engaged with a number of counterparties to progress a transaction to validate NAV and improve liquidity, including project-level equity injection at NAV or a disposal at NAV. during the Capital Markets Day presentation relating to the raising of new equity into the Glassenbury project company to augment the project’s duration, at the valuation at which this project is held in the books, continues to progress and, if successful, should underpin the valuation that the projects are held at. We note that recent industry transactions, such as the HEIT, provide further third-party support for the value of BESS and our current investment valuations. Three-year Plan to drive shareholder returns through portfolio growth and economies of scale At the Capital Markets Day on Company’s new Three-year Plan, and this is described in depth in the Three- year Plan section. The work done during the year has put the Company on a surer footing going into 2025, so we can capture the opportunity as the market improves. This new plan sets out our aims for the next three years and how we aim to achieve them. So far in 2025, our team has focused on securing additional contracted revenues to support leverage while working to debt facilities. Both elements have progressed well and we expect to make an announcement shortly about this cornerstone of the Three-year Plan. Gresham House GRID Annual Report 2024 13 Investment Manager’s review Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review In the Manager’s view, this has pushed up costs to consumers, as this country has stations to back up renewable generation. Thus, the CP30 plan will allow Great Britain to shift away from, and allow the decommissioning of, a substantial portion that a zero carbon system would achieve £10bn in savings to consumers in real 2012 terms 27 , which is only achievable the entire electricity market today is worth c.£75bn (wholesale and non-commodity is set to be unlocked. 27. assets.publishing.service.gov.uk/ media/60f575cd8fa8f50c7f08aecd/smart- systems-and-exibility-plan-2021.pdf It is very encouraging to see the Department for Energy Security and Net Zero (DESNZ), under a Labour government, calling for 22GW of BESS by 2030, compared with 5GW today, as it focuses on the execution of Labour’s Clean Power 2030 (CP30) Action Plan. CP30 has fundamentally shifted attitudes in favour of batteries, putting them centre stage. The previous administration’s focus on 2050 put too much store in as-yet unproven technologies (such as hydrogen) to address renewable intermittency, and overlooked the immediate potential of BESS. From a regulatory perspective, reducing the under-utilisation of batteries in the BM operated by NESO remains a top priority and must also be for DESNZ if the £10bn in savings mentioned above are to be realised. In this context, our dialogue with NESO has improved. NESO’s leadership team now holds a quarterly roundtable with BESS industry leaders and is committed to improving utilisation of BESS. Under the CP30 Action Plan, DESNZ is also targeting the installation of between 4GW and 6GW of Long Duration Energy Storage (LDES) to address longer lulls in the ability to discharge for at least eight hours. While several technologies compete in this area, Li-Ion BESS represents the most requirements of twelve hours in duration and potentially longer. This is highlighted in a recent report published by LCP Delta, a leading technical consultancy. BESS, up to at least a 12-hour duration, have the lowest upfront capital and running costs, lowest environmental impact, are most technologically mature and are deliverable by 2030. This presents new and our pipeline. Our immediate focus is on delivering that unlocks the capital expected to conclude in Q2 2025. We are excited by the Company’s next phase of growth which we expect to be NAV per share and the move to a more longer-term contracted revenue base. Gresham House GRID Annual Report 2024 14 Investment Manager’s review Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review At the Capital Markets Day (CMD) on 27 November 2024, the Manager unveiled a Three-year Plan to the market, outlining our aims for continued growth in our GB portfolio and improving returns for shareholders through three key prongs, with each contributing to the growth in EBITDA up to £150mn p.a. Three-year Plan 1 Teeing up the Three-year Plan Prior to the start of the three elements of Three-year Plan, the Manager will complete the current construction programme, which will take operational grid capacity to 1,072MW and installed battery capacity to 1,701MWh. As of had reached 845MW and 1,207MWh. Since the year end, Melksham (100MW / 200MWh) has become fully operational and the augmentation of Coupar Angus to a two-hour duration has also been completed. Therefore, only the 40MW / 80MWh Shilton Lane project and the 87MW / 174MWh West Bradford project are outstanding and we expect them to come online in Q2 2025. is operational it could achieve c.£59.4mn in annualised EBITDA during the tolling arrangement, assuming non-contracted assets perform at the recent merchant net revenue levels of £75,000 per MW (based on the Modo BESS index from December 2024 to February 2025) 28 . 28. Calculation of possible EBITDA under revenue scenarios as part of the alternate valuation tables on pages 35 to 37 2 Unlocking contracted revenues to underpin current and future debt arrangements The tolling arrangements secured with 455MWh to tolling. We are onboarding the remaining capacity through Q1 and Q2 2025, with total capacity onboarded the end of Q2 2025. We have learned a lot from the tolling arrangements and the Manager is leveraging this to unlock additional multi-year contracted revenues, to support existing and incremental debt capital being sought to execute the Three-year Plan, as described below. 3 Renancing and new nancing Since November 2024, the Manager has been working with an expert independent facilities and adding incremental debt. We expect to conclude the process in Q2 2025 and will announce full details at that time. The new facilities are expected to provide a longer term and reduced margins compared to our existing facilities; these new facilities are expected to unlock additional duration extensions additional pipeline. Manager will proceed with the main stages of the Three-year Plan, as described on the following pages. Gresham House GRID Annual Report 2024 15 Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review 4 Augmentation of the existing portfolio During the Capital Markets Day, we duration increases across the portfolio, to extend assets to durations of at least two hours. This was in addition to the 330MWh of duration increases we added through 2024 and the start of 2025. have been identifying an initial list of augmentations to add battery capacity to anticipated from these augmentations have not been included in the NAV; they been concluded. Further augmentations, described in our Three-year Plan presentation at our Capital Markets Day in November 2024 (which would take total augmentation of the current portfolio to c.1,500MWh) will be decided in the future, with the decision being taken as a function of the prevailing battery technology and battery prices, among other factors. 5 New investment pipeline The Manager has shortlisted 694MW of projects for construction. The projects described at our Capital Markets Day have not changed, however Monet’s Garden and Lister Drive are now in at 57MW each, instead of 50MW. expected to be announced at the time of listed below may be amended, for example if other opportunities arise. We expect to begin works on the pipeline in the second half of 2025. Pipeline projects Location Grid connection capacity (MW) Battery capacity (MWh) Battery duration (c. hours) Cockenzie A Scotland 240 480 2 Monet’s Garden North Yorkshire 57 114 2 Lister Drive Merseyside 57 114 2 Elland 2 West Yorkshire 100 200 2 Ocker Hill Midlands 240 480 2 Total pipeline 694 1,388 2 6 Additional revenues – an increased revenue stack In addition to the established sources trading (through the BM and wholesale) and now tolling, the Manager continues to work on additional revenue opportunities. Due to commercial sensitivity we are not providing further details today but the the EBITDA growth levels set out during the Capital Markets Day. Summary: a plan to deliver signicant growth and catalyse increasing shareholder value The Three-year Plan aims to deliver and EBITDA. We aim to further increase operational capacity over the next three years and increase average duration to around two hours. This growth is set to be funded by well-priced debt, supported by contracted revenues. Successful execution of the plan is expected generate Gresham House GRID Annual Report 2024 16 Three-year Plan Overview Portfolio Sustainability Accounts Other information Governance Market and nancial review Portfolio Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Portfolio Our Investment Portfolio and Pipeline consist of 35 BESS projects across GB, of which 27 are operational today. Current operational capacity is 945MW / 1,447MWh and is set to reach 1,072MW / 1,701MWh shortly after the release of this Lane (40MW / 80MWh) and West Bradford (87MW / 174MWh) expected in Q2 2025. As part of the Three-year Plan, we are targeting the construction of further duration extensions on existing assets, alongside new two-hour projects through 2026 and 2027. The pipeline of available projects extends beyond these but is subject to securing further funding and capital allocation considerations. The alongside the announcement of the Investment Portfolio Portfolio and pipeline construction updates The chart below summarises the increases in capacity through 2024 in terms of both MW and MWh. The duration of a BESS is the ratio of MWh to MW. In the year, we commissioned three new projects (York, Penwortham and capacity and completed augmentations (Arbroath, West Didsbury, Enderby, Nevendon and Penwortham), adding a Post year end, we completed Melksham (100MW / 100MWh) in January before completing the duration extensions at Melksham (100MWh) and Coupar Angus (40MWh). In total, we have added 330MWh to our operational capacity since the start of 2024, by augmenting existing sites. The Manager will apply the expertise developed through these projects to future augmentations and to site design of new projects, as part of the next phase of construction. GRID portfolio growth since December 2023 (MW/MWh) 200MW 400MW 600MW 800MW 1 ,000MW 1 ,200MW 1 ,400MW 1 ,600MW 1,800MW 200MWh 400MWh 600MWh 800MWh 1,000MW h 1,200MW h 1,400MW h 1,600MW h 1,800MWh 690MW 945MW 1,072 MW 50MW 50MW 50MW 100MW 40MW 87MW 5MW 788MWh 1,447 MWh 1,701 MWh 76MWh 50MWh 100MWh 100MWh 80MWh 174MWh 17MWh 50MWh 50MWh 50MWh 26MWh 40MWh 100MWh Capacity (MW) New project additions (MW) Capacity at 31-Dec-23 Arbroath (Mar-24) York (Apr-24) Penwortham (Apr-24) West Didsbury (Jul-24) Enderby (Jul-24) Elland (Oct-24) Penwortham (Oct-24) Nevendon (Nov-24) Melksham (Jan-25) Coupar Angus (Apr-25) Melksham (Apr-25) Capacity today Shilton Lane (May-25) West Bradford (Jun-25) Capacity at 30-Jun-25 Augmentation additions (MW) Capacity (MWh) New project additions (MWh) Augmentation additions (MWh) Gresham House GRID Annual Report 2024 18 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Augmentations case study Rapid, low-risk duration extensions increase operational battery capacity, andearnings potential Through 2024 and into the start of 2025 we have prioritised augmenting existing sites over building new capacity. Extending the duration of existing a faster way to increase the portfolio’s earnings capacity, since we have typically completed augmentations in around three months, whereas new projects can take multiple years from project acquisition to completion. Enderby Enderby was one of the sites we augmented in 2024 and was the location for our investor site visit in October 2024. Enderby was built in 2023 at 50MW / 50MWh and was designed with augmentation in mind, with foundation works put in place during the original build. This enabled us to add capacity relatively quickly in July 2024, once we had decided to increase duration. The works consisted of doubling up existing containers behind inverters, to free up half of the inverter capacity at the site. We then placed new containers next to the free inverters and connected them to the site. This approach required no changes to grid connection equipment and no new inverters, and the cost was therefore limited to the new batteries and some electrical works. The images show the site before augmentation (top) and after (bottom). added alongside existing inverters, while half the existing battery containers (green) have been moved to new positions alongside other existing containers. Using can present challenges. The approach we took at Enderby avoids these challenges The controller system then runs over both technology types, balancing to the inverter level. The Enderby site has more land available for further duration increases, revenue opportunities. Enderby post augmentation – 50MW / 100MWh Enderby pre augmentation – 50MW / 50MWh Gresham House GRID Annual Report 2024 19 Investment Portfolio Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Penwortham At Penwortham, we left the containers in place and instead moved half of the inverters to the available space on the site. The top image shows the original green containers pre-upgrade, with the bottom image showing the new white battery containers we added during the augmentation, with the green inverter boxes moved into their new positions. at Enderby, where containers are paired together behind inverters and the site is subdivided by battery type. As with Enderby, Penwortham was planned for a duration increase at the time of the original build, allowing us to quickly deliver the augmentation once the initial site was connected in 2024. As battery prices fall, the duration a site can go to and still hit our return targets increases. We are now seeing the opportunity to hit our return targets in some instances at a four-hour duration, whilst two-hour durations remain the focus we are monitoring for opportunities to install longer duration assets. Penwortham pre augmentation – 50MW / 50MWh Penwortham post augmentation – 50MW / 100MWh Gresham House GRID Annual Report 2024 20 Investment Portfolio Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Chart numbers correspond to the Company portfolio table on pages 22 and 23 Map In construction Pipeline Operational Key 18 21 17 8 9 23 1 6 10 19 20 11 2 32 31 33 34 35 16 13 28 26 29 24 25 22 12 15 4 7/14 3 5 27 30 Next phase of construction under the Three-year Plan presents an opportunity to increase leverage with more contracted earnings. This should enable us to build out duration increases at existing assets and also build new projects across GB in an initial next phase. The likely projects are listed in the Three-year Plan section but are subject to Gresham House GRID Annual Report 2024 21 Investment Portfolio Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Company portfolio (operational, in-construction and pre-construction projects) and exclusive pipeline Existing assets Location Capacity (MW) Battery size (MWh) Battery duration (c. hours) Operational status at 31 Dec 2024 1. Staunch 20 3 0.20 Operational 2. Nottinghamshire 7 9 1.35 Operational 3. Lockleaze Bristol 15 22 1.45 Operational 4. Littlebrook Kent 8 6 0.80 Operational 5. Roundponds Wiltshire 20 26 1.30 Operational 6. Wolves West Midlands 5 8 1.55 Operational 7. Glassenbury Kent 40 28 0.70 Operational 8. Cleator Cumbria 10 7 0.70 Operational 9. Red Scar Lancashire 49 74 1.50 Operational 10. Bloxwich West Midlands 41 47 1.15 Operational 11. Thurcroft South Yorkshire 50 75 1.50 Operational 12. Wickham 50 74 1.50 Operational 13. Tynemouth Tyne and Wear 25 17 0.70 Operational 14. Glassenbury Extension Kent 10 10 1.00 Operational 15. Nevendon Basildon 15 33 2.20 Operational 16. South Shields Tyne and Wear 35 28 0.80 Operational 17. Byers Brae West Lothian 30 30 1.00 Operational 18. Arbroath Scotland 35 52 1.49 Operational 19. Enderby Leicester 50 100 2.00 Operational 20. Stairfoot North Yorkshire 40 40 1.00 Operational 21. Coupar Angus Scotland 40 80 2.00 Operational 22. Grendon 1 Northampton 50 100 2.00 Operational 23. West Didsbury Manchester 50 100 2.00 * Rounded to nearest MW/MWh Gresham House GRID Annual Report 2024 22 Investment Portfolio Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Existing assets Location Capacity (MW) Battery size (MWh) Battery duration (c. hours) Operational status at 31 Dec 2024 24. York York 50 76 1.50 Operational 25. Penwortham Preston 50 100 1.00 Operational 26. Elland 1 West Yorkshire 50 100 2.00 27. Melksham Wiltshire 100 200 2.00 Total operational 945 1,447 1.53 28. Shilton Lane Scotland 40 80 2.00 29. Bradford West West Yorkshire 87 174 2.00 Total operational or under construction 1,072 1,701 1.59 30. Walpole Cambridgeshire 100 200 2.00 Total portfolio owned by the Company 1,172 1,901 1.62 Pipeline projects Location Capacity (MW) Battery size (MWh) 31. Cockenzie Scotland 240 480 32. Monet's Garden North Yorkshire 57 114 33. Lister Drive Merseyside 57 114 34. Elland 2 West Yorkshire 100 200 35. Ocker Hill Midlands 240 480 Total pipeline not owned by the Company 694 1,388 Total portfolio and pipeline 1,866 3,289 Gresham House GRID Annual Report 2024 23 Investment Portfolio Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Site information 5. Roundponds 20MW/ 26MWh Operational IPO Seed asset at augmentations 6. Wolves 5MW/ 8MWh Operational 2019 after the seed portfolio 7./14. Glassenbury including extension 50MW/ 38MWh Acquired in 2019 One of the original EFR assets acquired, was extended by 10MW in 2020 8. Cleator 10MW/ 7MWh Acquired in 2019 One of the original EFR assets acquired 1. Staunch 20MW/ 3MWh Operational IPO Part of the initial seed portfolio at IPO 2. Ruord 7MW/ 9MWh Operational IPO Seed asset at augmentations 3. Lockleaze 15MW/ 22MWh Operational IPO Seed asset at augmentations 4. Littlebrook 8MW/ 6MWh Operational IPO Part of the initial seed portfolio at IPO 13. Tynemouth 25MW/ 17MWh Acquired in 2020 One of the original EFR assets acquired 15. Nevendon 15MW/ 33MWh Acquired in 2020 Acquired as an EFR asset - has been through a major upgrade in 2024 16. South Shields 35MW/ 28MWh Acquired in 2020 One of the original EFR assets acquired 17. Byers Brae 30MW/ 30MWh Operational 2021 First asset 9. Red Scar 49MW/ 74MWh Operational 2019 First c.50MW project and largest in the portfolio when acquired 10. Bloxwich 41MW/ 47MWh Acquired in 2020 Our only site situated inside a warehouse building 11. Thurcroft 50MW/ 75MWh Operational 2020 and largest assets to enter Dynamic Containment 12. Wickham 50MW/ 74MWh Operational 2020 and largest assets to enter Dynamic Containment Gresham House GRID Annual Report 2024 24 Investment Portfolio Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 22. Grendon 1 50MW/ 100MWh Operational 2023 First two-hour site 23. West Didsbury 50MW/ 100MWh Operational 2024 Site extended from one hour to two 24. York 50MW/ 76MWh Operational 2024 Initially built at for extra duration 25. Penwortham 50MW/ 100MWh Operational 2024 Site extended from one hour to two 18. Arbroath 35MW/ 52MWh Operational 2022 Scottish asset from constraint management at 19. Enderby 50MW/ 100MWh Operational 2023 First site to be augmented to 20. Stairfoot 40MW/ 40MWh Operational 2022 Site originally built to one hour with plans 21. Coupar Angus 40MW/ 80MWh Operational 2023 Site built at one hour and extended to 28. Shilton Lane 40MW/ 80MWh Operational 2025 Two-hour project situated in Scotland connecting in 2025 29. Bradford West 87MW/ 174MWh Operational 2025 Largest single site in the portfolio, due to complete in 2025 26. Elland 1 50MW/ 100MWh Operational 2024 Built as a two-hour project 27. Melksham 100MW/ 200MWh Operational 2025 Largest project in the portfolio, split into two 50MW sites initially and extended to Gresham House GRID Annual Report 2024 25 Investment Portfolio Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Market and nancial review Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Dispatch rates of BESS in NESO’s BM are increasing An improvement in the dispatching of BESS has contributed to increased revenues. Modo Energy’s modelling of the in-merit dispatch rate 29 shows it has risen to 16% in December 2024, up from low single digits at the start of 2024. 29. The in-merit dispatch rate is a measure of battery utilisation in the Balancing Mechanism. It is the total dispatched battery volume divided by battery availability that was priced cheaper than the most expensive balancing action in that half-hour This still implies a very high skip rate of 84%, however the trajectory and recent improvements on the back of dispatch algorithm improvements and the inclusion of BESS in reserve services are encouraging, as are ongoing comments from NESO about further improvements planned during 2025. Revenues increased further in January 2025, as days when renewable generation was low drove greater upside volatility. Increased reserve energy procurement after the launch of Quick Reserve in November has given BESS assets a further opportunity for utilisation. Quick Reserve is a faster response time reserve product designed with BESS in mind. While our portfolio has followed the national trend, we have consistently outperformed the market, as discussed further in the Financial review. The following sections break down some of the key drivers and trends impacting current market conditions. Improving revenue outlook The revenue environment for BESS assets in GB evolved throughout 2024. The year started with BESS assets being severely under-utilised at the national level, resulting in exceptionally low revenues in January and February 2024. Since then, various improvements to reduce skip rates in the BM, the launch of additional services which BESS can compete in and the continued rollout of renewable generation have all improved the revenue picture for GB BESS assets, such that BESS revenues reached their highest level in two years during December 2024, according to Modo Energy. Market overview 2024 Evolution of the Modo dispatch rate of batteries in the BM 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Jan-25Dec-24Nov-24Oct-24Sep-24Aug-24Jul-24Jun-24May-24Apr-24Mar-24Feb-24Jan-24 Capacity Market Frequency Response January 2025 revenues at over 2.4x the revenue level of January 2024 Wholesale Balancing Mechanism Reserve Imbalance DecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFebJan Bid – Energy Bid – System-agged Oer – Energy 20242023 Oer – System-agged Modo dispatch rate – 15-min. rule Modo dispatch rate – 30-min. rule 0 20 40 60 80 100 120 140 Total dispatched volume (GWh) In-merit dispatch rate (%) 0% 2% 4% 6% 8% 10% 12% 14% 16% Modo Index – Revenues £/MW/Yr including Capacity Market Gresham House GRID Annual Report 2024 27 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Recently, there has been a misconception that BESS revenues are linked only to gas prices, because of the high trading opportunities that coincided with high gas prices during 2020-2022. However, the correlation between BESS revenues and high gas prices is actually the result with gas being used for the majority of results in additional costs to the system and therefore to consumers. This is made worse by several arrangements for pre-contracting thermal assets, which result in a large proportion of the cost of running those assets, such as reserving and start up, being excluded from the a stronger correlation to the gas price in recent years. much greater use of storage. This would lead to more gas actions moving to real time in the BM, rather than being started up ahead of time. As a result, the full cost of gas assets would be included in the system price calculation, including the cost of start-up and minimum non-zero times. Shifting away from gas will also move the system back towards relying on renewable generation where it is available, leading to excess renewables driving low or negative prices and a shortfall of renewable generation driving high prices for starting up marginal units. It is pleasing that as BESS utilisation has improved during the year and renewable penetration continues to rise, we have started to see the correlation of BESS revenues to renewable generation as predicted. The chart below from Modo Energy shows the correlation between wind generation and BESS revenues in the year. The key milestones for improvements Launch of the Bulk Dispatch Optimiser (BDO) in January 2024. The BDO enables the control room to aggregate BESS units and dispatch them simultaneously. While the launch resulted in limited improvement at the time, BDO will allow for automated instructions across a large portfolio of assets in future. Switch from a 15-minute rule to a 30-minute “rule” (read maximum dispatch duration) in March 2024. are now for 30 minutes and increasing the duration for which batteries can be dispatched increases their revenue potential. Launch of Balancing Reserve (BR) in April 2024. Reserve services contract BESS to ensure they are available when needed during the typical one- day contract period. Although limited volumes of BESS were procured initially, growth in services such as these ensures more volume is procured in advance and should improve BESS utilisation rates. Quarterly BESS sector CEO roundtables in December 2024 and April 2025) allow BESS sector leaders to monitor progress against commitments made at each session. Launch of Quick Reserve in December 2024 is driving additional reserve In addition to these changes, there is a positive background with Labour’s CP30 Action Plan moving the focus on mature technologies such as BESS and the inclusion of BESS in the LDES cap is working on calculating and releasing a cost analysis of BM skips. The fact that NESO is reviewing skip decisions more transparently is encouraging for the sector. Crucially in 2025 we should see a grid code update, to allow BESS assets to show the length of time they can be run for, rather than assuming an arbitrary control room with the ability to use BESS to their full potential. BESS revenues are increasingly correlated with rising renewable generation The investment thesis for BESS has always been underpinned by the rollout of renewable generation. As an electricity system relies increasingly on renewables, its storage requirements also increase. This is because storage is needed to avoid costly curtailment of generation during periods when excess renewable power is being produced, and to avoid expensive alternative generation in times of low renewable power. Battery revenues and wind generation trends in 2024 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Revenues Wind generation Revenue (£k/MW/year) Wind generation (GW) 0 20 40 60 80 100 120 140 160 180 0 2 4 6 8 10 12 14 16 18 Gresham House GRID Annual Report 2024 28 Market overview 2024 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review The greater reliance on renewable generation in the electricity system creates larger peaks and troughs in power relative to demand. This means we should see more negative price periods and more high price periods, as renewable penetration grows. Above, we can see the ongoing growth in renewable penetration in the UK, with this level of penetration already providing challenges to the system and opportunities to BESS assets. In 2024, there were a record number of negative day-ahead wholesale prices 30 ) and negative half hourly system prices (1,072 half hours, see on renewable generation. Modo Energy forecasts 200 hours of negative day- ahead wholesale prices in 2025 29 and for further growth beyond that. 30. modoenergy.com/research/gb-battery-energy-storage-markets-2024-year-in-review-great- britain-wholesale-balancing-mechanism-frequency-response-reserve We should see the trend of BESS revenues being driven by renewable generation continue, as BESS are better utilised in the BM and able to compete against thermal generation in areas such as Reserve services. Summers are likely to be dominated by negative prices and the need to remove excess renewable power, while winter revenues will be driven by lulls in renewable generation needing to be covered by stored energy, with the opportunity to discharge for large prices. These imbalances will become much greater as renewable generation builds out and may drive greater spikes in pricing for BESS to capture. This is now the investment thesis beginning to play out in the trading markets. Prior to April 2024, we saw almost no utilisation of BESS at the national level and limited correlation with wind output. However, after the 30-minute rule was implemented in March, followed by the launch of the Balancing Reserve and dispatch algorithm changes from April, we see a pattern emerging. Summer months where demand was lower and solar output was higher saw more frequent excess renewable generation and hence more regular negative prices. BESS was able to capture the negative prices and enhance earnings, driving a direct correlation. In the winter the and trading opportunities emerged during periods of low renewable generation, with fewer hours of negative prices during this time. This leads to higher revenue opportunities during low renewable generation in the winter. 0% 5% 10% 15% 20% 25% 30% 35% 40% Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Sep-24 Solar and wind as percentage of total UK electricity generation Quantity of negative half hour system prices by year 01-Jan 15-Jan 29-Jan 12-Feb 26-Feb 11-Mar 25-Mar 08-Apr 22-Apr 06-May 20-May 03-Jun 17-Jun 01-Jul 15-Jul 29-Jul 12-Aug 26-Aug 09-Sep 23-Sep 07-Oct 21-Oct 04-Nov 18-Nov 02-Dec 16-Dec 30-Dec Record number of negative prices in 2024 Increasing number of negative system prices each year since 2021 2019 20212020 2022 2023 2024 0 200 400 600 800 1,000 1,200 Gresham House GRID Annual Report 2024 29 Market overview 2024 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review In addition, during 2024 we have implemented duration extensions across several portfolio assets, positioning our portfolio to capture the revenue opportunity available in the alongside accomplished trading and asset management, have enabled us to continue to outperform versus industry benchmarks and remain the leader in the space. We are well positioned to capitalise on the improving revenue environment and able to leverage our scale to drive further capacity growth in a cost- power, expertise and support from Our scale and expertise put us at the forefront of the market As we see signs of improvement in GB and the trading story beginning to take shape as we had anticipated, it is worth noting that we remain the largest player in this space by some distance. The Company and the Manager have vital expertise and continue to drive the market forward. The announcement of our landmark Energy was another example of moving contractual alternative to trading against market headwinds. Gresham House Harmony Energy Income Trust Statera SMS EDF Zenobe Gore Street Capital TagEnergy Harmony Energy-FRV Conrad Energy Sembcorp Pulse Clean Energy Huaneng Tag Energy/Harmony Energy Sosteneo Fund HoldCo S.à.r.l. Eelpower SSDC Opium Power Field Warrington Borough Council SSE SUSI/Eelpower Downing LLP Amber Infrastructure Group EIG NextEnergy/Eelpower Scottish Power Econergy Nippon Koei Centrica Foresight Vattenfall Eku Energy Infragreen IV Voltalia Atlantic Green KX Power/Blackrock Schroders Greencoat Equinor Orsted TRIG Thrive Renewables RGREEN INVEST Greenspan Energy Capbal Ecotricity Forepower E.On ESB Gresham House's capacity is more than double the size of nearest competitor Prior buildout 2024 Capacity (MW) 0 100 200 300 400 500 600 700 800 900 Operational capacity by owner Gresham House GRID Annual Report 2024 30 Market overview 2024 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Fund performance NAV per share fell by 15.3% from 129.07p on 31 December 2023 to 109.35p on a decline in third-party revenue forecast assumptions, which is discussed in the Valuation section below. performance of the portfolio revenues and EBITDA improved compared with 2023. Revenues were up 20.1% from £38.7mn in 2023 to £46.5mn in 2024. This translates MW in 2024. Likewise, EBITDA grew 12.4% from £25.8mn in 2023 to £29.1mn in 2024. The graph below illustrates the expansion in portfolio operational capacity and improvement in revenues per MW achieved on the underlying portfolio through the year, which have resulted in the overall increase in revenues. The Market Overview section on pages 27 to 30 discusses the market backdrop in more detail. Company metrics table 31 December 2024 31 December 2023 Company metrics NAV £622.2mn £740.1m n Underlying portfolio asset valuation £758.0mn £840.2mn NAV per share 109.35p 129.07p Cash in the Company and subsidiaries 31 £39.5mn £43.7mn Total external debt drawn at Company £150.0mn £110.0mn Resulting net debt 32 £110.5m n £66.3mn Underlying portfolio performance Revenues 33 £46.5mn £38.7mn EBITDA 34 £29.1mn £25.8mn EBITDA margin 62.5% 66.7% MW 845 690 MW weighted average 778 607 MWh 1,207 788 MWh weighted average 998 672 Revenue per weighted average MW £59,800 £63,800 Revenue per weighted average MWh £47,10 0 £57,60 0 31. Unaudited 32. Unaudited 33. Unaudited 34. Unaudited Financial review 0 200 400 600 800 1,000 1,200 1,400 0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 Capacity (MW) Annualised Monthly Revenues (£) Projected Capacity (MW) RHS Historical Capacity (MW) RHS Annualised Actual Monthly Revenue (£) £30,000/MW per year revenue level £120,000/MW per year revenue level £210,000/MW per year revenue level Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 May-24 Jul-24 Sep-24 Nov-24 Jan-25 Mar-25 May-25 Gresham House GRID Annual Report 2024 31 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Revenue mix FY 2024 versus FY 2023 20242023 22.7% 25.2% 52.1% 17.6% 8.0% 50.2% 24.2% Frequency Response Trading CM Tolling The portfolio has also performed well relative to the peer group and consistently outperformed the Modo Energy BESS Index, as shown in the chart below. This was despite the average duration of the Modo BESS Index throughout the year being higher (1.36hr) than the GRID portfolio (1.26hr). Grid portfolio versus market index Feb-2024 Mar-2024 Apr-2024 May-2024 Jun-2024 Jul-2024 Aug-2024 Sep-2024 Oct-2024 Nov-2024 Dec-2024Jan-2024 £/MW (annualised) GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index GRID Portfolio Modo Index Frequency ResponseCapacity Market Trading TRIADs Tolling 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Underlying portfolio earnings The revenue mix evolved over the course tolling emerged as a new revenue stream. Frequency Response markets continued to saturate and the opportunities available in the trading market expanded, with the Trading, including a small amount of TRIAD 35 income, generated the largest share of portfolio revenues at 50.2%, up from 25.2% in 2023 as the market continued to shift away from ancillary services. Frequency Response remained 52.1%), while Capacity Market revenues remainder of the portfolio revenues increased. Tolling revenues amounted to 8.0% of the mix. We expect this to increase as we onboard the remaining assets agreement in 2025. 35. TRIADs are the three half-hour settlement periods of highest demand on the GB electricity transmission system between November and February each year, separated by at least ten clear days, and are part of a charge-setting process This improved revenue environment may signal that third-party forecasts may stabilise or improve. Indeed, in December 2024 the portfolio achieved an average annualised revenue rate of £91k per MW which, with a portfolio average duration of 1.4 hours, was well above the third-party revenue forecast for 2025. The third-party forecasts are an important element of the NAV calculation, as they are a key input to each project’s net present value. Financing The Company has a £195mn debt facility via its wholly owned subsidiary, Gresham House Energy Storage Holdings Limited September 2021 (with committed lines of £180mn), amended and restated in November 2022 (to a level of £335mn) and April 2024 (back down to the current revenue backdrop). £150mn was drawn as of 31 December 2024 and total gross debt drawn under this facility is expected to peak at £175mn. In Q4 2024 the Manager started a which is well progressed and expected to conclude in Q2 2025. In addition to is expected to provide additional capital for augmentations of the current portfolio and for the acquisition and build of the growth as described in the Three-year Plan section and elsewhere in this report. Gresham House GRID Annual Report 2024 32 Financial review Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Portfolio asset valuations Revenue forecasts The end of 2023 and start of 2024 saw some of the lowest revenue periods for GB BESS UK grid. This was a dramatic change given that just 18 months prior, the second half of 2022, saw the highest £/MW revenue achieved by the Fund. This backdrop meant that by mid-2023, BESS revenue forecasts upcoming decline in market revenues. At year end 2023, the Company applied its own short-term reduction in revenue forecasts, to by the industry. Over time, the independent forecasters followed suit and lowered their long-term outlooks for BESS assets. During 2024, the Company also changed one of its curve providers from Cornwall Insight to Modo Energy, as it recognised that Modo Energy were seen to provide current market conditions. The graph below shows the results of these changes on the blend of the curves from the two providers, illustrating the precipitous drop in independent forecasts which resulted in a -22.86p reduction in our NAV over the year. If trading conditions continue to improve the Manager expects to see an uptick in revenue forecasts. Valuation NAV bridge As of 31 December 2024, NAV per share was 109.35p, down 15.3% from 129.07p as of 31 December 2023. The change to the -22.86p impact from changes to revenue forecasts from independent third-party forecasters; -2.30p due to debt costs; -2.14p due to the reduction in assumed -1.88p impact from contracted revenues, which is explained below; +0.53p increase from a favourable move in interest rate swaps; +0.64p gain resulting from the impact of share buybacks made during the +1.54p from valuation gains on new investments, as they moved from to in-commissioning or operational assets, resulting in a lower discount rate being applied; +2.58p from model roll forward and modelling adjustments; and +4.17p increase in NAV from the portfolio Further information on the changes in the year and assumptions used are provided in the portfolio asset valuations section below. EBITDA £mn 129.07 0.64 2.58 1.54 (2.14) (22.86) 4.17 (2.30) 0.53 109.35 (1.88) 31 December 2023 NAV Share buybacks Rollforward and modelling adjustments New investments to FV New contracted revenues Revenue forecasts Change in ination rates Net fund and SPV working capital Debt costs Interest rate swap 31 December 2024 NAV 100 105 110 115 120 125 130 135 140 NAV/share Increase Decrease NAV (p/share) bridge from 31 December 2023 to 31 December 2024 Q4 2023 vs Q4 2024 curve comparison 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Q4 2024 Blend 0.5hr Q4 2024 Blend 1.5hrQ4 2024 Blend 1hr Q4 2024 Blend 2hr Q4 2023 0.5hr (rebased) Q4 2023 1.5hr (rebased)Q4 2023 1hr (rebased) Q4 2023 2hr (rebased) 40,000 50,000 60,000 70,000 80,000 90,000 100,000 110,000 120,000 130,000 140,000 £/MW/Yr Gresham House GRID Annual Report 2024 33 Financial review Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review The weighted average discount rate for the portfolio is 10.73%, which is the highest amongst our industry peers. This is a small decrease from the weighted average discount rate as at 31 December rate applied for tolling revenues and on those projects moving from construction to operations. The tolling discount rate does not have a material impact on the weighted average discount rate, due to the short duration of the tolling period (two years) versus the merchant revenues over the remaining asset life, and because only half of the assets are included in the tolling agreement during that period. Valuation basis Discount rate approach applied: MW (31 December 2024) MW (31 December 2023) Operational DCF rate (6.5% at FY2023) Merchant/ (FY2023: 10.85%) (FY2023: n/a) 795 640 Commissioning DCF (energised) we apply a 50bps premium to Operational discount rates (50bps at FY2023) 50 – Construction DCF (energised) phase – energised project but not achieved Provisional Acceptance construction premium to Operational discount rates (75bps at FY2023) – 50 Total MW in operational portfolio 845 690 Construction DCF to Operational discount rates (75bps at FY2023) 227 377 Cost incurred to date Assets held at cost as valuation thresholds not met 100 100 Total portfolio MW included in valuations 1,172 1,167 Contracted revenues Two areas of contracted revenues were Capacity Market (CM) contracts and tolling revenues. Updated CM contracts CM contracts awarded in February 2024. These T-1 contracts are for delivery for one year from October 2024. Tolling revenues from the Octopus agreement were included at the interims stage. A discount rate of 8.5% is used for these revenues, set at 200 basis points above the rate used for CM revenues and at the top of the range guided by the Company’s independent valuer. Whilst tolled rates are in line with the valuation model revenue curves in 2025, they are lower than the merchant revenues forecast for 2026. Whilst the contracting of revenues may limit upside on part of the portfolio, this provides helpful protection against weaker revenue environments should they return. The net impact of these two changes was to reduce NAV by -1.88p. Despite the negative NAV impact of the tolling agreement, this was an important step for the fund to take to secure a base level of revenues for the portfolio during a time of extreme revenue uncertainty. New investments to fair value West Didsbury, York and Penwortham are now all operational and passed a 30-day proving period by the year end. As such, the 0.75% discount rate premium during construction was removed during the period. Elland was in commissioning at the year end and the discount rate premium this. The result of these changes is a total NAV increase of 1.54p per share. Ination rates from 4.5% to 2.75% for RPI and from 4% to than expected in 2024. This is in line with others in the market. The impact of this change is a -2.14p reduction to NAV. Only the 2024 assumption has been changed levels of 2.5% for RPI and 2.25% for CPI have not been changed. These apply from 2026 onwards. Discount rates The Manager has made no changes to the discount rates used, except for the introduction of the new 8.5% rate used for tolling revenues, as discussed above. Gresham House GRID Annual Report 2024 34 Financial review Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Financial information FY2022 FY2023 FY2024 All gures are in £mn unless otherwise stated. Underlying portfolio revenue in each year 38 62.7 38.7 46.5 Underlying portfolio EBITDA in each year 39 48.8 25.8 29.1 Total portfolio external debt at each year end 60.0 110.0 150.0 Total cash 40 at each year end 78.9 43.7 39.5 Operational capacity at each year end (MW) 550 690 845 Historic valuation metrics FY2022 FY2023 FY2024 Enterprise value (EV) 41 based on: Market capitalisation at 45.9p share price 42 229.6 329.5 371.7 Using NAV prevailing at each year end 822.8 806.4 732.8 EV per operational MW (£k/MW) 43 based on: Market capitalisation at 45.9p share price 417.4 477.6 439.9 Using NAV prevailing at each year end 1,496.1 1,168.8 867.2 EV to EBITDA 44 based on: Market capitalisation at 45.9p share price 4.7 12.8 12.8 Using NAV prevailing at each year end 16.9 31.3 25.2 EV to sales 45 based on: Market capitalisation at 45.9p share price 3.7 8.5 8.0 Using NAV prevailing at each year end 13.1 20.8 15.8 Market capitalisation as a percentage of NAV: Using a 45.9p share price 30% 36% 42% 38. Unaudited 39. Unaudited 40. Total cash includes cash in the Company and in the underlying operational portfolio 41. Market capitalisation or NAV minus cash plus total external debt time of writing) 43. EV/total operational capacity in MWs 44. EV/total underlying portfolio EBITDA 45. EV/total underlying portfolio revenues Operational assets were valued at £684k/ MW as of 31 December 2024. Adjusting for working capital, which means the valuation only includes the NPV of future cash Working capital includes cash, batteries and other equipment held for upgrades across the portfolio. None of the new pipeline assets proposed under the Three-year Plan are currently included in the valuation. 36. Shares outstanding net of shares held in treasury by the Company time of writing) Alternative valuation metrics As discussed in the Fund performance section, we believe the alternative valuation metrics below provide useful additional information for shareholders showing performance and aligns with typical valuation metrics used for companies. These are provided in addition to the Alternative Performance Measures set out on pages 121 to 124. Valuations based on historical performance The table below shows valuation metrics based on the operational portfolio’s using the NAV prevailing at each year end and then using the current share price at valuation metrics therefore do not take into account the increase in operational capacity so far in 2025. Company valuation FY2022 FY2023 FY2024 All gures are in £mn unless otherwise stated. Shares in issue (no. shares) 36 541 573 569 Market capitalisation at 45.9p share price 37 248 263 261 NAV per share at each year end (pence/share) 156 129 109 NAV prevailing at each year end 842 74 0 622 Gresham House GRID Annual Report 2024 35 Financial review Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Forward valuation metrics based on dierent merchant revenue assumptions on 1,072MW capacity Merchant net revenue assumptions (£k/ MW/ Yr) 60,000 75,000 90,000 All gures are in £mn unless otherwise stated. Assumed merchant revenue on merchant portfolio 30.2 37.8 45.4 Average contracted revenue during tolling 43.0 43.0 43.0 Assumed underlying portfolio revenue 73.2 80.8 88.4 Potential underlying portfolio EBITDA 51.8 59.4 66.9 EV to EBITDA 49 based on: Market capitalisation at 45.9p share price 8.2 7.2 6.4 NAV at 31 December 2024 15.2 13.3 11.8 EV to sales 50 based on: Market capitalisation at 45.9p share price 5.8 5.3 4.8 NAV at 31 December 2024 10.8 9.7 8.9 49. EV/total underlying portfolio EBITDA 50. EV/total underlying portfolio revenues Given the portfolio’s increased capacity since the start of 2024 and the changing a much smaller earnings base than we expect looking forward. time of writing) 47. Market capitalisation or NAV minus cash plus total external debt 48. EV/total operational capacity in MW Valuation metrics based on a range of revenue projections We have therefore provided a forward- looking valuation metrics based on potential near-term future earnings, uncontracted assets and contracted revenues for those assets under tolling arrangements. We have assumed up to £175mn of debt and used the closing share price as of 14 March 2025 (being the time of writing). 2024 Company valuation used for forward valuations on 1,072MW capacity All gures are in £mn unless otherwise stated. Shares (millions) 569 Market capitalisation at 45.9p share price 46 261 109 NAV as of 31 December 2024 622 Assumed future peak external debt 175 Assumed minimum future cash 10 Assumed operational capacity (MW) 1,072 Enterprise value (EV) 47 (£mn) based on: Market capitalisation at 45.9p share price 426.2 NAV as of 31 December 2024 787.3 EV per operational MW 48 (£k/ MW) based on: Market capitalisation at 45.9p share price 397.6 NAV as of 31 December 2024 734.4 Gresham House GRID Annual Report 2024 36 Financial review Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review It is worth noting that the EV per operational MW implied by a 45.9p share price is below the estimated build cost of an equivalent portfolio, 51 . £75k/MW/Yr 52 of net merchant revenues the three months up to writing of this report (December 2024 – February 2025). Alongside this we have shown a sensitivity of £15k/MW/Yr up and down on merchant revenues, to illustrate the volatility in earnings driven by merchant revenues. The portfolio continues to perform at those levels today and we remain outlook. At these levels, the enterprise value of the Company should look attractive to investors as we see a substantially larger portfolio contributing to earnings in 2025 versus 2024. business case and investment outlook the information given here does not and should not be treated as indicating any likely level of Gresham House GRID Annual Report 2024 37 Financial review Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Sustainability Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Connecting new projects to the National to the growing number of projects bidding to be connected; according to Ofgem, the connection queue was 700GW in March 2024 and was estimated to be over 800GW by the end of 2024. As a result, the Investment Manager revisited its growth plans to avoid these potential connection delays and continue to deliver operational capacity growth by investing in duration extensions of existing sites. In 2024, upgrades were completed at eight of our operational projects, increasing most project durations to two hours, adding over 300MWh to the manner. Many of our existing sites and pipeline could go beyond two hours if the economics are favourable. The Manager continues to monitor processes to ensure full adoption of the Supply Chain Policy across its activities and suppliers. In 2024, the Manager statement, and these changes have been incorporated in our activities. Health and safety remains a priority, with all construction projects requiring dedicated Health and Safety oversight. 2024 was establishing industry standard methodologies for carbon metrics such as avoided emissions. Gresham House engaged with the Energy Storage Network in September 2024, proposing an industry-wide collaboration to produce a across the BESS market participants. Gresham House has since led the participants will then use going forward in their reporting. As at the publication of this report, the working group are in the and will seek third-party accreditation by an independent body to improve the credibility of the approach. Social The operational portfolio’s increased needed to ensure lower cost power availability on demand. As we continue to expand our operational capacity, we aim to enhance our impact on electricity consumers by providing tools for better management of the National Grid, ensuring robust demand and supply responses, and reducing overall consumer costs. We are committed to transparency and accountability in our sustainability obliged to report under the Sustainable Finance Disclosure Regulation (SFDR) and the Task Force on Climate- related Financial Disclosures (TCFD) the Board has voluntarily provided appropriate disclosures. We are proud to hold the Green Economy Mark from the London Stock Exchange, recognising our contribution to the green economy. This demonstrates our dedication to integrating environmental, social and governance (ESG) considerations into our investment processes. Below, we present updates on our work and performance during 2024. Environmental The Manager’s Energy Transition Sustainability Committee, overseen by Gresham House’s Sustainable Investment team with representatives from various sectors of the Manager’s team, such as construction, operations and fund management, was established to identify and address emerging sustainability issues and facilitate knowledge sharing. This section describes the sustainability aspects of our business and how we integrate and enhance sustainability in our investment processes and asset operations. Introduction The Company’s business is investing in from the decarbonisation of energy systems. The growing proportion of energy supply by wind and solar presents system operators with challenges in ensuring stable supply due to the intermittent nature of renewable energy generation. By storing energy from the electricity grid during periods of high supply/low demand and releasing energy during periods of low supply/high demand, BESS plays a critical role enabling the use of renewable energy. As sustainability is inherent in our business, in discussing sustainability we look at the operations, opportunities and risks of our business, as well as the Sustainability report Gresham House GRID Annual Report 2024 39 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Governance The GHAM Sustainability Committee meets regularly and remains focused on achieving our sustainability objectives. The Board meets at least quarterly, regularly discussing our approach to ESG considerations and risks as part of the agenda. We remain committed to reporting against SFDR and TCFD, despite these being non-compulsory for the Company. During the year, the Manager worked to meet the requirements of the UK Sustainability Disclosure Regulation (SDR), applying a Focus label to the Fund to further highlight its sustainability credentials and role in the transition to net zero. The Board and Manager are monitoring industry standards and best practice to ensure continued transparency in our reporting of performance against our sustainability goals. Gresham House GRID Annual Report 2024 40 Sustainability report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Whilst the Company is not required to comply with TCFD, the Company supports the disclosure recommendations and has therefore voluntarily provided TCFD disclosures. The Company began reporting against the TCFD recommendations in its 2021 Annual Report and has added to those disclosures in subsequent periods. In this 2024 Annual Report, the Company continues disclosures which aim to be consistent with the TCFD recommendations and recommended disclosures. The recommendations of the Task Force on Climate-related Financial Disclosures provide a reporting framework based on a set of consistent disclosure recommendations. This framework provides a level of comparability and transparency around climate-related risk exposures and approaches. Task Force on Climate-related FinancialDisclosures (TCFD) The Company’s business is investing in from the decarbonisation of energy systems. Renewable energy generation through wind and solar is inherently intermittent. The growing proportion of energy supply by wind and solar presents energy system operators (ESOs) with challenges in ensuring stable supply. By storing energy from the electricity grid during periods of high supply/low demand and releasing energy during periods of low supply/high demand, BESS plays a critical role enabling the use of renewable energy. BESS also replaces fossil fuel sources that are otherwise used as a backup to intermittent sources, as in GB. Because sustainability is inherent in our business, in discussing sustainability we look at the operations, opportunities and risks of our we conduct our business. Gresham House GRID Annual Report 2024 41 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 2 Describe management’s role in assessing and managing climate-related risks and opportunities The day-to-day management of ESG and climate matters is delegated to the Investment Manager, which applies considerations outlined in the Gresham House Energy Transition Sustainable Investment Policy when making new investments and in the running of the Company’s existing investments. The Manager also ensures that climate change-related risks are considered for individual investment projects. The Investment Manager monitors climate-related risks through the risk register, utilising knowledge gained by its experience in operating the investment portfolio, from information gathered through due diligence processes and by engaging with third parties as appropriate. The Investment Manager has also engaged with the Company’s largest shareholders to better understand the investor community’s perspective on sustainability-related issues, including climate-related strategy, disclosure and metrics. The Investment Manager’s Sustainable Investment team monitors the evolving climate-related government policy and participates in industry forums and investment-related policy developments that may include climate change mitigation and adaptation. Climate-related risks and opportunities strategy, including the intention to continue to expand the portfolio to capture opportunities arising from the decarbonisation of energy use and the increased penetration of renewable energy in GB and overseas. The Company follows the Gresham House Energy Transition Sustainable Investment Policy which is available on the Gresham here. Climate change and environmental pollution is a key topic within the Sustainable Investment Framework which is used to structure analysis, monitoring and reporting of ESG issues and opportunities within the lifecycle of our investments. The Board reviews all aspects of the Investment Manager’s performance annually, including adherence to the Company policies, and the Board’s Audit Committee considers the Company’s climate-related disclosures. Governance 1 Describe the Board’s oversight of climate-related risks and opportunities The Board has overall responsibility for the Company’s risks, opportunities and compliance. The Board considers the Company’s approach to ESG considerations and risks, which include the potential impact of the physical consequences of climate change and changes to the business outlook for BESS as a result of governmental policy and the increased penetration of renewables. Climate change risks are captured by the Company’s risk management framework via the risk register which is maintained and updated by the Investment Manager and the subject of consideration and debate at the Board’s quarterly meetings. In April 2024, Gresham House released its fourth Sustainable Investment Report highlighting the Investment Manager’s focus on investments that are well placed to provide long-term solutions to the issue of climate change as part of its 2025 Corporate Sustainability Strategy (CSS) and which included updates on climate-related activities across the Gresham House group. This is available on the Gresham House website at https://greshamhouse.com/ sustainable-investing/. The Investment Manager’s CSS and Sustainable Investment Policy inform the application of the Company’s strategy and its assessment of risks. This is complemented by sustainable investment objectives that have been established for the Energy Transition division and align to the Investment Manager’s CSS. The Energy Transition division’s sustainable investment objectives include Climate Change & Pollution as a priority topic with an objective by 2025 to “Demonstrate the role of new energy in the energy transition and understand the carbon footprint of the full lifecycle of assets with the intention of reducing it”. In 2025, progress towards the objectives objectives will be reviewed and a new sustainability strategy will be developed to further evolve our approach to sustainable investment and align with Gresham House’s overarching 2030 strategy; this will include Group and divisional-level net zero strategies. Gresham House GRID Annual Report 2024 42 Task Force on Climate-related FinancialDisclosures (TCFD) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Strategy 3 Describe the climate-related risks and opportunities the organisation has identied over the short, medium and long term The Company is committed to investing in and developing Battery Energy Storage Systems (BESS) to contribute to, and energy systems. Whilst the Company has ambitions to develop internationally, the portfolio is currently geographically limited to Great Britain and therefore the Company’s climate-related risks and opportunities are currently focused on Great Britain. The Company’s investments in BESS are related opportunities over the short, medium and long term by participating in the opportunities arising from the decarbonisation of energy usage and the increased penetration of renewable energy and the corresponding increase in energy storage requirements. These climate-related factors, which are applicable over the lifecycle of the Company’s investments, are incorporated into third-party revenue curves which are used within the Company’s The Board and Investment Manager also recognise that there are certain climate- related risks that could have an impact on the Company in relation to changes in the business environment and physical risks caused by extreme weather events. The Board and Investment Manager the principal risks facing the Company, including climate-related risks, and these are captured within the risk register. The Company’s investments are designed to operate over time horizons of 25 years or more. The table below sets out the key climate-related risks and opportunities Manager over the short term (<12 months), term (5-25 years) and include their potential of the Company. Timeframe Opportunity Risks Short term The continuing rollout of renewable generation increases demand for BESS to balance the energy system and may increase the volatility in the prevailing and forecast power price, providing wholesale trading opportunities earn revenues from wholesale trading activities Saturated market for ancillary services depresses pricing for those services Lack of progress in the development of NESO systems and processes continues Medium term Increased government and public support for decarbonisation increases the volume of sustainable and impact investing Implementation of carbon pricing in new sectors may lead to increased investment in companies that enable renewable deployment Reductions in battery prices and advances in battery technology provide opportunities to augment existing sites and increase the MWh of the portfolio at a lower cost of ownership and in a relatively short timescale Increased competition for investment opportunities will increase project costs Increased focus on BESS as a key enabler of renewable deployment may lead to greater regulation and associated costs Co-located batteries on renewable generation sites may reduce the need for standalone BESS Long term As economies continue to move away from fossil fuels, demand for electricity will increase and could increase power prices and power price volatility Advances in battery technology may lower cost of ownership and provide new opportunities to increase participation in energy markets and storm damage Development of alternative energy storage systems to support the rollout of renewable power generation may lead to early obsolescence of BESS, causing asset write downs Gresham House GRID Annual Report 2024 43 Task Force on Climate-related FinancialDisclosures (TCFD) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Financial planning Opportunities Despite a poor revenue environment in 2024, the medium and long-term outlook for BESS remains strong and this is anticipated to provide access to investor capital in the future. The development of new, contracted, revenue sources for BESS, such as tolling revenues, may also open up access to further sources of debt funding, further enabling the Company Volatility of wholesale power prices, driven by volatility in the availability of renewable energy generation, may trading energy as renewables become an increasing proportion of the energy mix. As high energy prices are typically driven by fossil fuel generation and low prices driven by high renewable generation, any increase in carbon pricing is likely to extend spreads with fossil fuel generation having to increase pricing to cover the cost of running. This means there is an opportunity for increased revenues resulting from increasing carbon prices. The Company uses the services of third-party experts to estimate revenue opportunities for BESS over the short, medium and long term, taking into account the large number of potential variables, the third-party experts are used within the Risks The Company’s portfolio is focused exclusively on BESS within GB, and as such is exposed to the physical, technological However, the investment portfolio is geographically spread in GB, and given the nature of BESS technology, is not generally Consideration is given to potential planning phase and the geographic spread provides resilience against local issues. Strategy Opportunities Increasing awareness and attention to climate change has spurred increased deployment of renewable energy opportunities for BESS in the short, medium and long term. The Company is a leading provider of BESS in GB and has a Risks Development of BESS capacity in GB has led to the saturation of the market for BESS ancillary services in GB and greater reliance on the wholesale trading market, resulting in greater volatility of returns. 4 Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and nancial planning Investment portfolio Opportunities The Company’s operational BESS investments participate in the market from governmental and societal support for deployment of renewable technologies. price volatility driven by increased renewables penetration and a relative lack of BESS capacity. The Company has also developed a projects which have been constructing BESS assets. Large parts of this pipeline have recently been commissioned or are expected to be commissioned shortly. Risks the portfolio investments are likely to be prices which are outside of the control of the Company or its investments. Increased input prices linked to carbon- related raw material costs may increase construction costs of pipeline assets and therefore reduce returns available to the Company. The emergence of new energy storage technologies may require the Company to invest in research and development, thereby impacting on returns. Gresham House GRID Annual Report 2024 44 Task Force on Climate-related FinancialDisclosures (TCFD) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Transition risks It is likely that wholesale energy markets, which provide the majority of the investment portfolio’s revenues, will be climate-related factors. Some of the most government policy (including carbon cost regimes and mandated plant closure); penetration of renewables and the ability of NESO to develop appropriate systems to manage variable energy supply; development in future technologies designed to deal with and adapt to climate-related matters; and changing patterns of demand (including the impact of electric vehicles, heat pumps and increased use of air conditioning). The Company uses the services of third- party experts to estimate the impact of those factors in energy prices over the short, medium and long term to create low, high and central case scenarios. These scenarios, which factor in Government commitments, a view on the likelihood of their implementation, and expected carbon prices, are then embedded scenarios are used within the Company’s and their timing, is highly uncertain. within the wholesale market, or to provide ancillary services, provides revenue opportunities even in low case scenarios. This scenario analysis has been used to identify which assets are likely to experience a change in climate conditions the Investment Manager’s exposure to physical climate risks. Changing climate conditions do not mean the risk is material and given the geographic spread of the Company’s investment portfolio within GB and the nature of BESS technologies, the Board and Investment Manager do not consider that there are likely to be investment portfolio. To build on this assessment, next steps will involve assessing the materiality of of hazards analysed and reviewing the design and management plans of at-risk assets to ensure material risks can be Currently, physical risks are considered increased infrastructure costs to cope with potential physical risks are not anticipated to be material. Flood defences are already considered in the investment portfolio with a number of projects having key equipment elevated above the ground to reduce risk of damage in the event insurance costs to cope with potential physical risks are not anticipated to be material. 5 Describe the resilience of the organisation’s strategy, taking into consideration dierent future climate scenarios, including a 2°C orlower scenario Physical risks In 2024, preliminary climate scenario analysis was conducted across the Company’s assets to build an understanding of exposure to changing climate conditions. The scenarios used for SSP1-2.6 which represents a low GHG emission scenario, resulting in a below 2°C end-of-century temperature rise 53. Calculated using data from Aqueduct Water Risk Atlas. SSP1-2.6 is below 2°C scenario. SSP3- 7.0 is considered business-as-usual scenario. SSP5-8.5 is considered pessimistic scenario. For the analysis, increased risk is moving into a higher category of water stress i.e. from low-medium (10-20%) to medium-high (20-40%) 54. Calculated using CMIP6 climate projections from Copernicus Climate Data Store. SSP1-2.6 is below 2°C scenario. SSP2-4.5 is considered business-as-usual scenario. SSP5-8.5 is considered worst-case scenario. For the analysis, increased risk is an increase of >5% in average daily precipitation 55. Calculated using CMIP6 climate projections from Copernicus Climate Data Store. SSP1-2.6 is below 2°C scenario. SSP2-4.5 is considered business-as-usual scenario. SSP5-8.5 is considered worst-case scenario. For the analysis, increased risk is an increase of >0.5°C in daily average temperature SSP2-4.5 which represents a likely, middle-of-the-road climate scenario with an end-of-century temperature rise of around 2.7°C SSP3-7.0 which represents a high GHG scenario with an end-of-century temperature rise of 3.6°C SSP5-8.5 which represents a worst- case, fossil fuelled development scenario with a 4.4°C temperature rise The percentage of the portfolio’s assets expected to face increasing water stress, increased average daily precipitation and increased average daily temperature by 2050 is displayed in the table below. Hazard Below 2°C Business- as-usual Worst case Water stress 53 16% 8% 10% Precipitation 54 0% 6% 0% Daily maximum near-surface air temperature 55 59% 94% 100% Gresham House GRID Annual Report 2024 45 Task Force on Climate-related FinancialDisclosures (TCFD) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 8 Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management As noted above, climate-related risks are integrated into the Company’s risk management framework through the investment process and through the regular review of the Company’s risks carried out by the Investment Manager and are included in the risk register which is reviewed quarterly by the Board. Transition risk The anticipated growth of renewable energy generation, which is likely to lead to increased volatility of wholesale power prices, is considered to be an opportunity for the investment portfolio rather than a risk. However, shifts in power demand or pricing, impact the ability of the portfolio companies to generate revenue. The Investment Manager regularly updates the net revenue yield curves. The Investment Manager keeps abreast of developments in battery and storage Company’s market opportunities in the future. In 2024, the Manager engaged sustainability consultants Sancroft to produce a memorandum on the state of the BESS industry, current market issues, inequalities entitled “The Case for Urgent Action to Increase the Role of Battery Storage in the UK’s Balancing Mechanism”. Sancroft then engaged with Ofgem, DESNZ, NESO, politicians, universities and other key industry participants to promote BESS as key to net zero in the UK. climate risk assessment approach in line with the evolving nature of climate factors and emergence of climate-related tools and data. 7 Describe the organisation’s processes for managing climate-related risks The Board and the Investment Manager facing the Company, as determined and Physical risks Potential physical risk factors that are design reviews, site inspections or during routine maintenance, may be mitigated via design changes such as raising containers assessments are undertaken to determine assets have temperature management (such as air conditioning or liquid cooling) and further mitigations of physical risks are considered at the planning stage and are often required to be considered as part of planning approval. Risk management 6 Describe the organisation’s processes for identifying and assessing climate-related risk Company or its investment portfolio are Manager as part of the risk management consideration given to likelihood and impact and ranked accordingly. part of the due diligence process that is carried out prior to acquiring new portfolio companies by the Investment Manager and independent experts. The Investment Manager has created a detailed ESG decision tool which is completed prior to making acquisitions of portfolio companies. This decision tool includes consideration of numerous ESG and climate factors including environmental assessment, suitability of construction contractors to adequately deal with environmental or climate-related mitigation actions. During investment appraisal, consideration is given to available climate mitigation and any the costs of putting this in place are factored into the investment proposal. Principal and emerging risks, which may include climate-related risks, are disclosed within the Company’s Annual Report. Gresham House GRID Annual Report 2024 46 Task Force on Climate-related FinancialDisclosures (TCFD) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 10 Disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse gas emissions, and the related risks The Company reports emissions using the Greenhouse Gas (GHG) Protocol which is the most widely used framework for reporting on carbon emissions and this framework separates emissions into the or controlled sources generation of purchased energy the value chain Scope 2 and Scope 3 (transmission and distribution losses and well to tank emissions) CO emissions for the year ended 31 December 2024. The calculations were supported with input from third-party carbon consultants and apply the Partnership for Carbon Accounting Financials’ (PCAF) “The Global GHG Accounting & Reporting Standard for the Financial Industry” (December 2022). UK Government conversion factors and environmentally extended input-output (EEIO) emissions factors have been utilised to facilitate the calculations. Metric 31 December 2024 31 December 2023 Scope 1 emissions (tCOe) 2,598 7,541 Scope 2 emissions (tCOe) 1,607 5,228 Scope 3 (emissions (tCOe) 1,752 1,876 WACI (tCO Scope 1 and 2 emissions) 90 297 Carbon emissions methodology Fi nancial Emissions = Σ Outstanding Amount c Total Equity and Debt c x Company Emissions c Metrics 9 Disclose the metrics used by the organisation to assess climate-related risks and opportunities Renewable energy generation through wind and solar is inherently intermittent and the increased proportion of the energy generated by renewables therefore increases the challenges facing energy system operators to ensure a stable supply of energy. The Company’s investments in BESS play an important role in facilitating the use of renewables by providing ancillary services that support the transmission network balancing system and by storing energy from the electricity grid during periods of high supply/low demand and releasing energy during periods of low supply/high demand. To date, the rollout of BESS has lagged behind the deployment of renewable energy. The Company has been targeting growth of its investments in BESS to support renewable generating capacity and thereby reduce dependency on fossil fuels. The Board and Investment Manager consider that the most important climate-related metrics for the Company relate to the scale, availability and Total operational BESS capacity at the year end (MW and MWh) Weighted average BESS capacity for the year (MW) Carbon emissions avoided (tCOe) In addition, the Investment Manager will monitor carbon emissions and carbon intensity metrics in line with TCFD GHG emissions – Scope 1, 2 and 3 carbon emissions (tCOe) Weighted average carbon intensity (WACI) (Scope 1 and 2 The methodology used to calculate the average carbon intensity and carbon emissions is documented in sections 10 and 11 of this report respectively. Gresham House GRID Annual Report 2024 47 Task Force on Climate-related FinancialDisclosures (TCFD) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 11 Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets BESS capacity BESS capacity underpins multiples of renewable generation capacity and therefore incremental BESS deployment is a key measure. The Company has continued to grow its portfolio of operational BESS capacity despite industry-wide challenges. The operational capacity reported by the Company, measured in MW and MWh capacity, has grown as shown below. GHG emissions avoided As BESS generally store energy during periods of high renewable energy generation/low demand and release energy during periods of low renewable energy generation/high demand, there BESS within the electricity grid (on the assumption that BESS exports would otherwise by met by fossil generation). However, BESS will also displace fossil fuel-based energy generation operating as a backup system (which is often kept “warm” in advance of use) and it therefore enables the avoidance of emissions between the carbon associated with the energy imports and exports. The current BESS avoided emissions methodology utilised by the fund was developed in partnership with the Carbon Trust in 2022. As at February 2025, the Energy Storage Network working group industry standard methodology. As of development, the previous year’s methodology has been used for this report. More detail on the methodology applied for this is set out below. It should be noted that at this stage the carbon avoided methodology does not account for lifecycle carbon impact, i.e. carbon emissions associated with the supply chain and construction of the assets. Emissions reported currently encompass only operational assets and do not yet account for assets under construction. The Company intends to expand reporting to cover construction assets in future periods. More information on Scope 1, 2 and3 emissions Scope 1 emissions for the Company certain assets. Only one of the Company’s amounts of gas or diesel, with the bulk of generation coming from gas at that site. Further, one other asset used a small amount of diesel for testing under its Capacity Market contract obligations and did not represent a material trading return. gas emissions released from indirect consumption of energy. For battery assets, the presumed energy consumption of an asset is calculated by deducting energy exported from energy imported (kWh) by the asset. Half-hourly UK electricity grid carbon emissions factors are then applied to estimate the carbon footprint associated with this energy consumption. Scope 3 emissions in this reporting include Transmission & Distribution (T&D) associated with loss during transmission and distribution of energy consumed by the BESS assets. The Scope 3 emissions also include the estimated well to tank emissions associated with natural gas consumption. In future, the Investment Manager will look for ways to include Scope 3 emission calculations for construction activity, as well as identifying opportunities to engage with suppliers to take action to reduce such emissions. Weighted-average carbon intensity methodology and metric carbon-intensive assets, expressed in tCO Σ current value of investment i current portfolio value x i n ( issuer’s Scope 1 and Scope 2 GHG emissions i issuer’s $M revenue i ) Note that “issuer” in the case of the Company refers to its battery assets. Operational capacity (MW) Operational capacity (MWh) 31 December 2020 315MW 380MWh 31 December 2021 425MW 473MWh 31 December 2022 550MW 598MWh 31 December 2023 690MW 788MWh 31 December 2024 845MW 1,207MWh Gresham House GRID Annual Report 2024 48 Task Force on Climate-related FinancialDisclosures (TCFD) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review The Scope 2 methodology omits two key aspects of the broader role of BESS that should be factored into carbon 1 no value is attributed to BESS services and the renewable generation this allows on the system; and 2 whilst trading, the battery exports would replace the next marginal asset that would otherwise be called upon, which would be a higher carbon intensity technology such as gas, than the average intensity on the grid. Therefore, marginal unit carbon cost and not the average intensity. As shown in the chart on the previous page, imports are typically carried out during half-hourly periods when carbon intensity is lower, whilst exports are typically delivered during higher carbon intensity periods on the grid. Low prices are typically driven by high output from renewables, leading to lower grid carbon intensity, whilst high prices are typically driven by periods of lower renewables output when power is delivered by higher carbon- intensive and more expensive power technologies such as gas. On this measure, the carbon avoided by the Company’s BESS investments is YE 31 December 2022 510,291 tCO YE 31 December 2023 677,775 tCO YE 31 December 2024 596,764 tCO Carbon emissions avoided methodology Scope 2 emissions show the net carbon emissions impact of assets’ operations through energy consumption. This methodology for BESS assets is such that the net metering, i.e. import and export of energy by each battery, is assumed to be consumed/avoided at the average intensity of the national grid for each half hour. This calculation demonstrates the operational carbon emissions of the role of BESS assets when it comes to broader grid carbon emissions and their role in supporting increased penetration of renewables and decreased use of carbon- intensive energy generation. The average carbon intensity of the grid is relatively stable due to a general high prevalence of gas and, therefore, the intensity is often relatively small on any given day. BESS will typically result in net consumption of energy as a result of round-trip losses, i.e. it imports a greater volume of energy than exported with a resulting “carbon consumption”. Unless consideration is given to the wider carbon enable, i.e. Frequency Response enabling greater reliance on renewables, the carbon emissions impact of these assets will be misstated. Therefore, we have worked with third- party data providers to factor in the Response services. The avoided emissions are calculated by comparing calculated emissions against a baseline emission should these BESS assets not be available to the electricity grid operators. In the case of a BESS asset performing Frequency Response services, the baseline is assumed to be a plant at the operating margin. For the purposes of the estimation, it is assumed that a BESS asset would maintain a state of charge of 50% in order to provide headroom in the battery to deliver upwards and downwards actions and therefore when comparing against the baseline it is assumed that only half of the nominal battery capacity is used. This is multiplied by the number of hours in which the BESS asset was operational in the service and then multiplied against the average operational margin grid carbon intensity. The baseline calculation is Grid stability baseline emissions = 50%BESS capacity x No. hours in service x grid operational margin This baseline is then compared to the calculated emissions to estimate the emissions avoided. The approach taken is likely to result in a conservative estimation of the avoided emissions as it only factors in the emissions avoided during periods of Frequency Response services and not emissions avoided through trading. The calculation also uses average carbon intensity rather than marginal asset intensity. Under the current methodology the estimated carbon emissions avoided from our portfolio for 2024 was 596,764 tCO ). Target for GHG emissions avoided The Investment Manager is in the process of developing a group-wide net zero strategy, which will look to include asset targets and engagement strategies, and including the Science Based Targets initiative. The Investment Manager intends to publish this by the end of 2025. Gresham House GRID Annual Report 2024 49 Task Force on Climate-related FinancialDisclosures (TCFD) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Risk and S.172reporting Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Risk management approach The Company recognises that active risk management is critical to enable it to meet its strategic objectives. The Company has a clear framework for identifying and managing risk, at changing environment in which the Company operates. The impact of emerging risks on the Company’s business model are also considered and used to make informed decisions, the underlying investments), based on their impact and/or likelihood. Existing risks in detail Risk area Gross impact Mitigation Net impact Operational and performance risk in the underlying investments leading to loss ofvalue. The BESS investments do not perform in the manner expected or are not optimised in the best commercial manner to capture revenue streams which could lead to reduction in valuations. Performance within the SPVs may not meet planning or safety requirements and result in curtailment of operations and loss of investment value. The portfolio relies on contracts with suppliers suppliers may fail to provide adequate support. Poor market conditions create lower volatility and ancillary services saturation creates lower revenue streams. The Company has ensured that assets are for new investments is considered to ensure Each investment is subject to commissioning testing to ensure all relevant planning and HSE conditions are met. Fire risk is carefully assessed and sites are designed and operated to ensure this risk is as low as practicable. Cyber security risk is managed via secure systems used by optimisation partners. The portfolio has a number of alternative suppliers and optimisers to manage risk. The portfolio relies on multiple income The Investment Manager works with industry groups and engages with NESO to ensure BESS opportunities are maximised. The Investment Manager has substantial experience managing BESS assets and works with leading asset optimisers to ensure assets are designed and operated as expected. Health and safety performance is rigorously tested and reviewed. Performance of the Company’s BESS investments has been impacted by market issues. A key focus of the Company is to improve utilisation of BESS and the economic performance of these assets. Tolling agreements have been implemented on a large portion of the portfolio. These reduce with the Company. In 2025 the Company is continuing contractual discussions to both capture upside and Principal risks and uncertainties Gresham House GRID Annual Report 2024 51 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Risk area Gross impact Mitigation Net impact Dividend policy is not in accordance with shareholders’ expectations. Uncertainty in the level of dividend distributions undermines shareholder price and ability to access capital. The banking covenants have been amended and restated and a new dividend policy is planned to be announced in 2025. Two key elements are required to achieve contractual revenues and a corresponding relaxation of banking covenants. The dividend will be dependent on revenue Shareholder reaction and feedback is continually reviewed. The Company remains fully asset backed. Revenues are expected to recover with improvements to NESO systems and development of other contractual revenue opportunities. This will allow dividends to resume in due course. It is expected that at a minimum the Company will make a distribution to meet Investment Trust Company regulations. Financing risk of existing investments and availability offuture growth capital. pipeline due to poor short-term revenue forecasts and substantial NAV discount preventing equity fund raises. non-payment of dividends and default. The Company’s investments are subject to banking covenants which have been amended and restated in early 2024. The Company does not have any unfunded commitments. The debt facility has been amended and restated to enable the completion of the current pipeline projects and planned extensions. The banking covenants have been carefully modelled by the Manager to ensure they are achievable within the amended and restated debt facility agreement. These are monitored regularly. As debt is drawn the Company enters into interest rate hedging instruments to manage this risk. The revenue environment has stabilised and the risk in relation to the debt covenants is low. However, the Company aspires to continue to grow additional BESS capacity and has been seeking contractual revenue systems to Performance and availability of grid connections and their impact on future project commissioning dates causing delay to investment revenues and earnings. commissioning timescales. portfolio to generate project revenues to deliver earnings to pay dividends on the timescales expected by the markets. New for 2025 is the risk of grid connections queue reform. This has already “paused” new applications since 29 January 2025 and has the potential to disrupt existing pipeline projects. The existing construction pipeline has grid connection certainty. This risk has decreased to low on a forward- looking basis. Whilst there has been an ongoing impact of delays in 2024 which has meant additional capacity has been delayed, the programme is now almost complete and therefore the impact on the remaining grid connections is low. The Company agrees that grid connections queue reform needs to take place to cleanse grid capacity and provide a better landscape for developers. However, this needs to be a robust and quick process to avoid disruption. Gresham House GRID Annual Report 2024 52 Principal risks and uncertainties Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Risk area Gross impact Mitigation Net impact Great Britain assets are based on a business model which relies on certain revenue streams sourced from National Grid mechanisms and resulting from overall rollout of intermittent renewables. Adverse changes by NESO in relation to a) NESO moving away from their “Net Zero” ambition (e.g. utilising thermal plant rather than BESS) may reduce the size/scope of income-earning opportunities to the Company’s investments and have potential impact on valuation; or b) NESO not utilising available assets electricity market; or c) HM Government’s Energy Strategy moves away from intermittent renewable assets which create revenue opportunities for BESS and instead move to other strategies which impact on BESS future growth. Any of the above may impact on the revenues available to BESS on Great Britain’s grid. The Company’s investments enjoy several Capacity Payments, TRIADs and DC as contracted services to National Grid; the Company’s investments are able to select which services to provide on any given time the Investment Manager and optimisation partners. NESO has been slow to utilise BESS capacity and this has created revenue streams for legacy fossil assets at the expense of BESS. However, NESO began to make progressive changes in early 2024 to ensure BESS will form an integral part of transforming the electricity sector in the UK. The Investment Manager works with industry groups and engages with NESO to ensure BESS opportunities are maximised. this allows a certain level of income to be locked in – this is a major mitigant. BESS projects are versatile assets and can perform a variety of roles to manage risk. Projects have the potential to “revenue stack” and gain multiple revenue streams from The income stream opportunities and usage of BESS are expected to evolve over time. However, NESO’s progress is being carefully monitored and managed; restoring appropriate usage of BESS by NESO is a key management focus with encouraging results in H2 2024. The ability to enter into further tolling arrangements and other contractual revenue streams allows the Company to lock in revenue streams and mitigate risk. Geographic risk. there is a concentration risk and over-reliance on the GB market. Over time, the international exposure of the Company will be increased and the portfolio relationships and opportunities are in place. In the short term the portfolio will remain GB dominated. As GB is currently experiencing Overseas expansion plans are available but no investments will take place in the short term. This risk therefore remains high. Gresham House GRID Annual Report 2024 53 Principal risks and uncertainties Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Risk area Gross impact Mitigation Net impact Valuation risk. The Company’s investments are valued using future income streams driven by third-party power curves. These valuations may be materially incorrect or not held at fair value. The Company’s investments are impaired expected or costs are higher than expected. upon these valuations. Risk-adjusted discount rates drive valuation along with the external pricing curves. The Company utilises a modelling methodology which discounts income streams using discount rates appropriate to the perceived risks. The weighted average discount rates are reviewed regularly. A third-party valuer reviews Compared to market peers the risk is deemed to be low when the discount rates are considered/compared. The risk remains at medium as third-party marketplace but the resulting valuations lack market comparable transactions to validate. Availability of batteries and other key components. Inability of the Company to deploy capital raised into investments due to incomplete or lengthening project timescales. Price increases for components making investments less attractive and impacting on overall returns. The Company’s construction projects and augmentations are being completed in the next six months and are not reliant on the acquisition of additional components. The Company’s portfolio has acquired batteries and key components to build out the existing funded pipeline. make Chinese BESS accessible and provide improving economics. Reliance on the Investment Manager. The Company relies on the Investment Manager and “key persons” as a mission critical supplier. The Company has long-term contractual arrangements in place with the Investment of the Company is one of its key focus areas. The Investment Manager remains incentivised to continue to grow the Company and drive value through the changes to the Investment Manager fee arrangements. The Investment Manager has built out a large team of experts which reduces “key people” risks. Tax compliance. The Company is registered as an Investment Trust and must comply with certain tests. The Investment Manager undertakes the relevant tests each quarter and the Company’s tax advisors review this regularly. In order to ensure continued compliance in a low revenue environment the Company capitalised the loan with MidCo on 15 March 2024. It is expected that at a minimum the Company will make a distribution to meet ITC regulatory requirements. Gresham House GRID Annual Report 2024 54 Principal risks and uncertainties Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Risk area Gross impact Mitigation Net impact Environmental, Social and Governance: production and recycling of batteries createsrisk. BESS are manufactured, installed and operated with the intention of driving the transformation to a low carbon energy supply in the UK. However, the lifecycle ESG impact of the batteries needs to be considered and minimised. The supply for battery manufacture relies on high-quality global partners who ensure their supply chain does not involve the use of illegally or unethically sourced “rare earth” materials or inadequate labour standards. The Company undertook a supply chain review in 2022. The recycling of the BESS systems remains subject to constant development and research. The Company is motivated to ensure low environmental impact. This is an industry- wide focus and the residual value of materials remains high and there is likely to be value from recycling of materials in future. Some aspects of this are still evolving over time, especially the end use/recycling of BESS. The ability of BESS to drive a low-carbon electricity system needs to be considered in comparison to other options when considering the overall ESG impact of BESS. Work will continue to minimise this over time. Emerging risks Risk area Gross impact Mitigation Net impact Emerging technology replaces battery energy storage assets. The Company invests in battery storage might adversely impact on the Company’s investments. Future income streams may be reduced if costs. The Company utilises proven technologies with associated Tier 1 supplier warranties and performance guarantees. The Company continues to review available technologies. It is currently viewed as unlikely that a completely new reliable and cost- competitive technology will appear during the lifetime of these batteries and impact the lifecycle of these batteries. costs and the valuation model assumes continuing cost reductions for replacement assets over time. Due to lower battery pricing there is increasing opportunity for BESS to compete in longer duration storage opportunities and replace/ augment existing technologies. Geopolitical risk of potential equipment shortages as China is subject to US taris. Disruption of the supply chain of crucial equipment. The Company has relationships with other non-Chinese suppliers, but they are likely to source components from China. the UK BESS market. The Company ensures it is securing key equipment orders in advance. The current funded pipeline has secured appropriate equipment. Future pipeline has opportunities to exploit better economics. Gresham House GRID Annual Report 2024 55 Principal risks and uncertainties Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review S.172 reporting Shareholders The Company will require further funding to continue the requirements of the investment strategy and complete construction of the portfolio assets. As such, existing and prospective equity investors are vitally important stakeholders. Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 Through our engagement activities, we strive to obtain investor buy-in into our strategic objectives and Since IPO, the Company number of shares to allow the Company to meet the investment strategy of the Company. The Company engaged with the stakeholder group in Interim and full-year accounts. The Company’s Corporate Brokers and Investment Manager are in regular communication with shareholders and shareholder views are reported to the Board on at least a quarterly basis. The Company’s Corporate Brokers set up direct calls between investors and the Board members. The Chair and the Board members have made themselves available to engage in discussions around issues of governance and overall performance. One-to-one meetings with the Investment Manager. Regular news and quarterly NAV updates. The Company has developed a strong support the Company in its ambitions notwithstanding the current market A share buyback programme commenced in Q1 2024. The engagement activities of GRID Discussions with shareholders during and since the AGM. Webinars around the Annual Report. Market announcements. Annual and Interim Reports. Site visit (8 October 2024). A webinar/Capital Markets Day Following the year end the Company announced the appointment of Peel Hunt LLP as Joint Corporate Broker to the Company, Lenders The Company will require further funding to continue the requirements of the investment strategy and complete construction of the portfolio assets. Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 Through constructive engagement, the Company strives to maintain a healthy relationship with lenders. The Company engaged with the stakeholder group in Regular meetings to amend and restate debt environment in Q1 2024. Continued communication to ensure the completion of the construction programme in 2024. The Manager, with oversight from the Board, has renegotiated the debt facility held by the Company’s wholly owned subsidiary to align covenant levels with current market conditions and resized the debt facility. The engagement activities of GRID Regular meetings in Q1 2024. Successful negotiations led to revised debt agreement. Gresham House GRID Annual Report 2024 56 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Investment Manager Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 Constructive engagement with the Investment Manager is important in order to ensure that the expectations of the shareholders are being met, and that the Board is aware of challenges being faced by the Investment Manager. The Company, supported by its Management Engagement Committee and a board adviser, conducts both ongoing reviews and an annual review of the Investment Manager’s performance and the terms of engagement of The Board and the Investment Manager maintain an ongoing open dialogue on key issues facing the Company with a view to ensuring that key decisions such as investment decisions, the Investment Manager’s capabilities and resourcing, trading partner performance in the SPVs and the Company’s strategy are aligned with achieving long-term shareholder value. The Board has also engaged an independent board adviser that acts as an interface between the Board and the Investment Manager to help review, test and challenge the reporting and Manager. The Board discussed the linkage of the management fee to the Company’s NAV with the Investment Manager. This open dialogue takes the form of a number of ad hoc Board meetings, as discussed in the Corporate Governance Report, and more informal contact, as appropriate to the The Company and Investment Manager have aligned interests to ensure the future success of the Company. The Investment Manager sees the growth of the Company as both a key element of its strategy strategy of the Investment Manager. The Board and the Investment Manager also discussed and revisited governance and resourcing arrangements going forward as the Company’s number of investments grows. During 2024, the Board held a number of meetings with the Investment Manager to Consideration of pipeline acquisitions/ disposals/augmentation Tolling arrangements Share buyback programme Terms and remuneration under the Investment Management Agreement, which led to a end aligning the interests of the Manager and shareholders Gresham House GRID Annual Report 2024 57 S.172 repor ting Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Business partners and key service providers The Company has various key service providers who provide management services. Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 The intention of the Company is to maintain long-term and high- quality business partnerships to ensure stability while the Company pursues its growth strategy. The Company, supported by its Management Engagement Committee, reviews all key service providers to the Company and the terms of their engagement. During the year, the Company conducted a review of the terms of all service provider engagements along with their fee levels to ensure appropriate levels of support to the Company during the year. The Company seeks two-way engagement between the Board and key service providers on service delivery expectations and feedback on important issues experienced by service providers during the year. The intention of the Company is to maintain long-term and high- quality business partnerships to ensure stability while the Company pursues its growth strategy. The Company has ensured that the interests of key service providers are aligned with the Company. The support of the Company’s key service providers was also fundamental in the successful completion of the Company’s debt share buyback and tolling arrangement. Through the Management Engagement Committee, the Board conducts annual reviews of the key service providers. As a result, the Board made improvements in the management fee structure and its corporate after the year end. Communities The Company proactively engages with the communities within which it operates. Stakeholders‘ interests How GRID engages Stakeholder engagement in practice Outcomes and actions during 2024 To educate the public on the role of BESS in the UK’s decarbonisation ambitions. During construction of investment projects, the Investment Manager ensures all relevant planning and construction conditions are met. In addition, the Investment Manager remains committed to proactively engaging with the communities within which the Company operates. The Investment Manager is part of the Gresham House Limited group and is focused on a sustainability agenda. The key topic is GRID’s role contributing to the UK’s target of decarbonising the economy by 2050, through investment and deployment of BESS. The Board continued to monitor the Investment Manager’s adoption of its ESG decision tool, which takes into account the impact of investment decisions on surrounding communities and the importance of engaging with those communities. More direct engagement with communities is recommended, in order to continue to educate the public on the role of BESS in the UK’s decarbonisation targets. Gresham House GRID Annual Report 2024 58 S.172 repor ting Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Governance Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Catherine Pitt (Chair of the Nomination Committee and Independent Non-Executive Director) Cathy is a legal adviser who has specialised in the investment company and asset management sectors for over 20 years, specialising in governance, regulation and capital markets. Cathy was appointed to the Board on 1 March 2019. The Board considers that Cathy’s legal expertise, transaction experience and knowledge of the investment trust sector, as well as her work as Chair of the Nomination Committee, enable her to and governance enhancement, both of which are important to the Company’s long-term sustainable success. non-executive director of Baillie Association of Investment Companies and a member of the Advisory Council limited by guarantee. Duncan Neale (Audit Committee Chair and Independent Non-Executive Director) Duncan is a CFO and Finance Director with over 20 years of commercial experience working for both publicly listed and privately owned companies. Duncan is a Fellow of the Institute of with Price Waterhouse in London. Duncan was appointed to the Board on 24 August 2018. The Board considers that Duncan’s experience working as an FD and CFO in the energy sector, as well as his work as Chair of the Audit Committee, enable discussions covering valuation, the performance of the fund and risk, which together aid the long-term success of the Company. of DJN Consultancy Limited, and a non-executive director of AFC Energy plc. The Company has a Board of ve Independent Non-Executive Directors. John Leggate CBE, FREng (Chair and Independent Non-Executive Director) John is highly experienced as a global energy sector executive and senior adviser on the energy transition and the commercialisation of advanced experience and is currently on the Board Washington DC, Chair of WizeCap Ltd and is a senior adviser in the energy sector to “blue chip” international consultants and senior adviser to Dial Partners (Dubai). John was appointed to the Board on 24 August 2018. The Board considers that John’s breadth of board experience brings a positive view of engaging with, and responding to, changing market dynamics. John is highly motivated to deliver value to all stakeholders and thus contributes to the long-term sustainable success of the Company. Global Integrity, Inc (US), Chair of WizeCap Limited and Flamant Technologies Limited. Isabel Liu (Chair of the Management Engagement Committee and Independent Non-Executive Director) Isabel has over 25 years’ global experience investing equity in infrastructure, including the AIG Asian Infrastructure Fund, the ABN AMRO Global Infrastructure Fund and investment business of John Laing plc. Isabel served as a non-executive director of Pensions Infrastructure Platform, backed by UK pension schemes to invest in UK infrastructure. She has been a board member of Transport Focus, the consumer watchdog for public transport and England’s highways, and Heathrow Airport’s Consumer Challenge Board. Isabel was appointed to the Board on 1 October 2022. The Board considers that Isabel’s extensive experience in all phases of direct investment in infrastructure including renewable energy in the UK and around the world, as well as her work as Chair of the Management Engagement Committee, Board discussions on project resourcing and governance, and thus to contribute sustainable success. Schroder Oriental Income Fund Limited and Utilico Emerging Markets Trust plc. Board of Directors Gresham House GRID Annual Report 2024 60 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review David Stevenson (Chair of the Remuneration Committee and Senior Independent Non-Executive Director) commentator for a number of leading publications including The Financial Times (the Adventurous Investor), Citywire, and MoneyWeek. He is also the founder of www.etfstream.com, the leading source of ETF analysis in Europe. David was appointed to the Board on 24 August 2018. The Board considers that David’s knowledge of the investment industry, and experience of communicating with the end investor through various marketing and communications channels, as well as his work as Chair of the Remuneration Committee – and his work with other boards – enables him to contribute and to the Company’s long-term sustainable success. of Castelnau Group Limited, the Secured Income Fund plc, Aurora Investment Trust plc and Workspace plc. Gresham House GRID Annual Report 2024 61 Board of Directors Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Ben started his fund management career in equities at Lazard Asset Management in 1994 before going on to co-found Cantillon Capital and later founded Hazel Capital in 2007, a renewable energy- focused fund management business. Ben currently serves as a director of all of the Company’s project companies. James Bustin (Associate Director, Energy Transition) James has 11 years of experience across joined the team in 2019 having previously worked on public equities and venture capital in the Gresham House Ventures team. As Assistant Fund Manager for the Company, he covers all elements across fund management including strategy, funding, modelling and new investments. James joined Gresham House in 2018 as part of the acquisition of Livingbridge VC where he had been working as an analyst since 2016. Prior to Livingbridge, James worked in TMT audit at EY for 3 years, qualifying as a Chartered Accountant. The Head of Operations also oversees the data science team, who ensures the Manager has accurate live data readings across all assets and runs predictive modelling and real-world simulations to identify new ways to earn money with our assets. function oversees the Company’s accounting and the production of underlying portfolio SPV accounts, as well as monitoring regulatory requirements. Ben Guest (Managing Director, Energy Transition) Ben was the founder and managing partner of Hazel Capital which was acquired by Gresham House in 2017. He has 30 years of investment experience. Ben’s expertise spans the investment spectrum, across infrastructure, listed equities and venture capital. Ben is Managing Director of Gresham House’s Energy Transition Division and the Lead Fund Manager of the Company. He is responsible for the origination and execution of investment opportunities and for the overall strategy and ongoing portfolio management of the Company. The Construction team includes a Head of Construction, an EPC Director and supporting Project Managers. This team focuses on all aspects of constructing new sites and augmenting existing projects and contains connections expertise. The Operations team is led by the Head of Operations, with the team split between commercial and technical operations, with experienced asset managers in each. The commercial operations team works to maximise revenues and reduce operating costs across the portfolio. This includes looking for new revenue sources and monitoring markets for opportunities to enhance performance. The technical asset managers focus on availability, or uptime, ensuring our assets are delivering their full potential. The Manager’s team consists of a Lead Fund Manager and Assistant Fund Manager and three other teams who manage the BESS projects throughout their lifecycle. Development; Construction; and Operations. The Manager employs a total of 24 full-time equivalent employees to work on GRID. The Investments & Project Development team is working to develop both UK and international projects. A UK Investment Director and an International Investment Director are supported by the wider investment team. The Manager’s development capability continues to provide us with a substantial project pipeline on very competitive terms. The Manager’s team Gresham House GRID Annual Report 2024 62 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Centralised nance function. Three FTEs are dedicated to GRID Associate Director, Assistant Fund Manager Investment Associate Investment Manager Investment Manager Investment Manager EPC Director International Devco Investment Director UK & Ireland Devco Investment Director Head of Construction Head of Operations Senior Team Assistant Team Assistant Project Manager Project Manager Intern Senior Commercial Asset Manager Commercial Asset Manager Assoc. Commercial Asset Manager Senior Technical Asset Manager Technical Asset Manager Technical Asset Manager Assoc. Technical Asset Manager Senior Data Scientist Data Scientist Managing Director, Energy Transition Fund Manager, GRID Harry Hutchinson (Investment Associate, Energy Transition) Harry joined Gresham House in April 2023. Prior to joining Gresham House, Harry worked as an Auditor at Grant Thornton for three years, focusing primarily on technology and media businesses. in Chemistry from the University of Oxford September 2022. Charlie von Schmeider (Director of UK and Irish Project Development, Energy Transition) Charlie has over 20 years of experience having started his career as a solicitor before moving to investment management for the past nine years. Charlie has extensive experience in the development, funding and asset management of distributed energy infrastructure projects and has worked on a wide range of technologies including solar PV, hydroelectric, anaerobic digestion, thermal heat networks, gas peaking and battery energy storage. Charlie’s current role began in February 2021. He is responsible for executing investments in BESS projects, whether acquired before construction or when already operational. Fernando Casa Garcia (Head of Operations and Asset Management, Energy Transition) Fernando has 15 years of experience in the renewable energy sector, mostly in solar PV. Since joining the team in May 2021, Fernando has been focused on the design, development and deployment of processes and procedures that allow the growth in MWs under management and improvement in operational performance. Prior to Gresham House, Fernando was Global Head of Technical for a 2.2 GW solar PV portfolio at WiseEnergy focused on the operation of their solar PV assets and increasing overall revenues. Gresham House GRID Annual Report 2024 63 The Manager’s team Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Ana Segizbayeva (Head of Construction, Energy Transition) Ana joined Gresham House in September 2022 and is responsible for implementing the EPCM (Engineering, Procurement and Construction Management) structure and delivering the Energy Transition team’s project pipeline. Ana is a multi-skilled professional innovative, award-winning renewable energy projects in the UK. Previously, Ana helped to establish quality management, project delivery, and commercial project functions at GRIDSERVE Sustainable Energy. She also successfully and subsidy-free solar and battery storage hybrid projects with bi-facial panels and tracking technology. Prior to that, Ana was part of the BELECTRIC projects team building utility-scale solar farms. Paul Carse (EPC Director, Energy Transition) In February 2024, Paul became part of Gresham House, taking on the role of EPC (Engineering, Procurement and Construction) Director in the Energy Transition division. With 14 years of experience in the HV/ renewable sector, Paul has held key positions such as Head of Project Delivery at a developer and Head of Major Projects at a prominent ICP (Independent Connection Provider). His journey began at National Grid, where he completed an extensive training programme. Throughout his career, Paul has been involved in various renewable energy projects, spanning BESS, solar, wind and anaerobic digestion. Additionally, he holds a degree in Power System Engineering, Stephen Beck (Finance Director, Real Assets) Stephen joined FIM Services Limited in 2013 and joined Gresham House when FIM Services Limited was acquired in 2018. He has 28 years of industry experience and is a law graduate and Barrister and was called to the Bar in 1996. He is also a Fellow of the Institute of Charted Accountants PricewaterhouseCoopers in 1999. managing BESS, Renewables, Forestry and Sustainable Infrastructure sectors. Prior to this, Stephen worked at E.ON from and commercial roles, ranging from power station projects, M&A transactions and working with HM Government delivering low carbon solutions. Nick Vest (Finance Director, Energy Transition) Nick joined Gresham House in January 2021. He has over 20 years of accounting Accountant and Chartered Tax Adviser. Prior to Gresham House, Nick worked as Finance Director for an internationally focused property investment group and before that Nick was Associate Director of Tax at Temenos Group SA in Switzerland. Rupert Robinson (Managing Director, Gresham House Asset Management Limited) Rupert has been the Managing Director of Gresham House Asset Management Limited since September 2015. Before joining Gresham House, Rupert was CEO and CIO of Schroders (UK) Private Bank for 11 years and prior to that spent 17 years at Rothschild where he was latterly Head of Private Clients at Rothschild Asset Management. Rupert has a proven track record of He has over 30 years of experience in asset management and wealth management, focused on product innovation, investment management, business development, banking and wealth structuring. He is a member of the Gresham House Group Management and Investment Committees. Lefteris Strakosias (Investment Director, Energy Transition) Lefteris joined Gresham House in March 2023 and has over 15 years of experience in infrastructure and energy transition investments including solar PV, onshore and hydroelectric power. He has held principal investment and advisory roles with large institutions such as Columbia Threadneedle Investments, National Pension Service of South Korea Macquarie, and Société Générale, as well as corporate and business development roles with Libra Group and Maple Power. Lefteris holds a MSc in Finance from Imperial College London and a BSc in Management Science from Athens University of Economics and Business. Gresham House GRID Annual Report 2024 64 The Manager’s team Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review In addition to our normal quarterly Board meetings, we held 29 ad hoc Board meetings throughout the year to discuss topics such as capital allocation, tolling contracts, dividends and dividend policy, year business plan. We had focused Investment Manager and encouraged constructive engagement on key issues throughout the year. Typically, there was attendance by the full Board at all quarterly Board Meetings and overall attendance was in line with the requirements of the AIC Code. Further, we, as a Board, periodically values and strategy. The Board, through our committees, assess and monitor the Board and key advisers’ culture and behaviours to ensure that these are supportive of and aligned to the Company’s purpose, values and strategy. Purpose The Board and I see the Company’s purpose to deliver performance for investors through investment in BESS. The Board seeks to do this by providing support, constructive challenge and governance in its working relationship with the Investment Manager. The Board, supported by its Company Secretary, operates under a robust corporate governance framework and ensures that high standards of corporate governance are applied across all of its processes and decision making. At the Company’s quarterly Board meetings, Update from the Investment – Investment portfolio commentary – Trading data and investment performance, by month – model, including any updates to key assumptions – Risk management and risk mitigation, including climate change and ESG risks – Review of any recommendations made by the Investment Manager Update from the Company’s – Market commentary – Share price performance against the Company’s peers – Sales and trading commentary Report from the Company’s Depositary Report from the Administrator and – Compliance monitoring – Regulatory and governance updates with the Principles and Provisions of the AIC Code. The AIC Code is available on the AIC website (www.theaic.co.uk) and includes an explanation of how it adapts the Principles and Provisions of the UK Code to make them relevant for investment companies. Board composition As the Board, we have recognised the importance of diversity as an essential The Board has 40% female representation and one Board member from a minority UK Listing Rules). The Chair of the Nomination Committee has considered the composition of the Board in her succession plan, more details of which can be found in the Nomination Committee report on page 70. The role and operation of the Board Our role, as the Board, is to lead the Company in promoting its long- term success and generating value for shareholders. As Chair of the Board, I am pleased to present the Corporate Governance Report for the year ended 31 December 2024. The purpose of this report is to summarise our corporate governance framework and to explain how we, as a Board, have corporate governance is fundamental to GRID’s operations and to the generation of consistent, long-term value for our shareholders. Corporate Governance Code During the year, the Board considered the Principles and Provisions of the AIC Corporate Governance Code (the “AIC Code”). The AIC Code addresses the Principles and Provisions set out in the UK Corporate Governance Code (the “UK Code”) and includes additional Provisions House Energy Storage Fund plc. I believe that reporting against the Principles and Provisions of the AIC Code, which has been endorsed by the Financial Reporting Council, the Guernsey Financial Services Commission, and supported by the Jersey Financial Services Commission, provides more relevant information to our shareholders. Corporate governance report Gresham House GRID Annual Report 2024 65 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Matters reserved for the Board We have a formal schedule of matters which includes, but is not limited to, considering proposals from the Investment Manager, making decisions concerning the acquisition or disposal of investments, and reviewing the terms of engagement of all third-party advisers (including the Investment Manager) and the appointment and removal of the Company Secretary. We have established procedures whereby any Director, wishing to do so in the furtherance of their duties, may take independent professional advice at the Company’s expense. All Directors, including myself, have access to the advice and services of the Company Secretary. The Company Secretary provides us with all relevant information requested by the Chair in advance of each Board meeting, advises us on governance matters, and ensures we continue to adhere to our Directors’ duties. There is a clear division of responsibilities between the Board and the Investment Manager. Under the AIFM Agreement, the Investment Manager acts as the discretionary investment manager and AIFM to the Company within the strategic guidelines set out in the Investment Policy, subject to our overall supervision. The asset management role encompasses the oversight of all operational and managing all operational contracts, managing all health and safety operational risks, advising us on the monthly and quarterly asset/portfolio performance, managing power price/market exposure, and progress with the asset pipeline. The Investment Manager also reports requiring our approval before undertaking transactions. The Company has a business relationship with Gresham House DevCo Limited, a related party of the Investment sources, performs due diligence on, and acquires pipeline projects on a speculative basis exclusively for the Company to ensure our ability to grow in a burgeoning market with few operational projects; manages these projects through construction; sells projects to the Company; and takes development risk on our behalf, where our investment mandate prevents us from taking this risk. The Management Engagement Committee reviews the Investment Manager’s performance annually, along with its adherence to the terms of the AIFM interest. Further details are contained in the Management Engagement Committee report on page 74. Leads the Board in setting its agenda, and operational performance and establishing the risk appetite. Organises the business of the Board, system of internal controls. Role of the Senior Independent Director To provide a sounding board for the Chair and serves as an intermediary for the other Directors and shareholders. To lead the appraisal of the Chair’s performance with the other Non- Executive Directors. Role of the Non-Executive Directors Provide constructive challenge, strategic guidance and hold management to account. Scrutinise the performance of the Investment Manager. Seek assurance on the integrity of systems of risk management are robust and defensible. their Board responsibilities. Values The Board values integrity, transparency, from a variety of talents in the best interests of the Company. Strategy portfolio of utility-scale battery energy storage systems with the aim of maximising risk-adjusted total returns for investors through income and growth. Culture The Board has a culture of openness, engagement and challenge. How the Board operates We, as the Board, meet regularly throughout the year, with set responsibilities for myself, as Chair, the Senior Independent Director and Non- Executive Directors. Responsibilities of the Chair Leads the Board and is responsible directing the Company. Leads the Board in its oversight of the Company’s purpose, values and culture. Gresham House GRID Annual Report 2024 66 Corporate governance report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Remuneration The Board and I are committed to implementing remuneration policies and practices that support our strategy and promote long-term sustainable success. Details of this policy can be found in the Directors’ remuneration report on pages 76 to 80. Board committees the Company are independent and non-executive and serve on all committees. Quarterly Board meetings Audit Committee Management Engagement Committee Nomination Committee Remuneration Committee (4 held) (5 held) (2 held) (1 held) (1 held) John Leggate 4 5 2 1 1 Duncan Neale 4 5 2 1 1 Catherine Pitt 4 5 2 1 1 David Stevenson 4 5 1 1 1 Isabel Liu 4 4 2 1 1 Shareholder engagement During the year, the Board held the Company’s Annual General Meeting, Capital Markets Day and a site visit. We were pleased with the engagement we had with shareholders at these events. As the Board, we welcomed the constructive input from shareholders, both institutional and retail, on the Company’s future strategy. Timeline of shareholder engagement 2 February 2024 – Announcement of share buyback programme 29 April 2024 – Announcement of annual results and presentation webcast 5 June 2024 – tolling agreement announcement 20 June 2024 – Annual General Meeting 9 September 2024 – H1 2024 trading update 30 September 2024 – Interim results announcement and presentation webcast 8 October 2024 – Enderby Battery Storage site visit 27 November 2024 – Capital Markets Day Gresham House GRID Annual Report 2024 67 Corporate governance report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Board activities and stakeholder considerations The Board is conscious of its duty to seek out and consider a broad spectrum of stakeholders’ views in decision-making. We believe that maintaining the long-term future of the Company is dependent on strong stakeholder relationships, and as the Board, we are committed to nurturing these connections. The Section 172 report can be found on pages 56 to 58. Substantial interests being 573,444,694 Ordinary Shares. Shareholder Number of Ordinary Shares as at 31December 2024 Percentage of issued share capital as at 31December 2024 BlackRock Investment Mgt – Index (London) 54,491,070 9.58% Gresham House (London) 49,586,967 8.71% Schroder Investment Mgt (London) 42,878,852 7. 54% Sarasin & Partners (London) 24,823,884 4.36% Hargreaves Lansdown Asset Mgt (Bristol) 21,955,660 3.86% Gravis Capital Mgt (London) 21,444,510 3.77% BlackRock Investment Mgt (London) 17,766,034 3.12% Shareholder Number of Ordinary Shares as at 22 April 2025 Percentage of issued share capital as at 22 April 2025 BlackRock Investment Mgt - Index (London) 54,491,070 9.58% Gresham House (London) 49,586,967 8.71% Schroder Investment Mgt (London) 42,878,852 7. 54% UBS Securities (London) 25,391,362 4.46% Hargreaves Lansdown Asset Mgt (Bristol) 24,754,988 4.35% Sarasin & Partners (London) 22,675,285 3.98% West Yorkshire Pension Fund (Bradford) 20,717,405 3.64% Gravis Capital Mgt (London) 20,660,899 3.63% The Directors’ interests in the Ordinary Share capital of the Company are disclosed in the Directors’ remuneration report on page 78. Gresham House GRID Annual Report 2024 68 Corporate governance report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Board performance review In accordance with the AIC Code, the Board conducted an annual assessment of its own performance, that of its committees and the Chair. The Board performance review process operates on a three-year cycle. This year, the performance review was conducted by an independent, external consultant, Trust Associates. Trust Associates conducted the Company’s last externally facilitated Board evaluation in 2021. We considered three proposals from following due consideration, determined that Trust Associates possessed the requisite experience to conduct the Board evaluation. It was also advantageous to have Trust Associates reassess the Board after three years to provide its assessment of the Trust Associates conducted a series of in-person meetings to discuss the performance of the Board and the Company with the Non- Executive Directors, apart from David Stevenson, which was conducted via videoconference. In addition, Trust Associates held discussions regarding Board performance with the Investment Manager, Company Secretary, Solicitors, Brokers, the Auditor, Board consultant and key shareholders. The focus of this external evaluation was to conduct a comprehensive assessment Topics covered in performance review Findings from the 2024 review Strategic oversight by the Board been limited. The Board and management are taking steps to stabilise revenue and deleverage, such as potential asset sales and a new tolling agreement with Octopus. Supervision of investment activities Directors receive high-quality information from management coupled with valuable analysis from independent adviser Charles Conner. The Board and management have a strong and collaborative relationship. Oversight of risk The Board has a strong focus on risk assessment and management, with improved risk reporting thanks to a dynamic representation of risk, which has enhanced Board discussions. Despite this, communication can be improved between the investment team and the risk reporting process with suggestions to scrutinise the robustness of risk management systems further, including potentially engaging with the Investment Manager’s internal risk team for additional insights. Shareholder accountability The Board is focused on ensuring the best outcomes for investors, with the Chair actively engaging shareholders to discuss key topics such as share price and NAV. Some shareholders need clearer communication about the risks and issues facing their investment, including the volatility of the battery market and the Company’s valuation assumptions. Board composition and process The Board is engaged and dedicated, leveraging a wide range of expertise and advisory input to challenge the Manager constructively. On a forward-looking basis, the Board has reviewed its capability requirement and will take appropriate measures. Committee structure, composition Auditor. The Management Engagement Committee requires more time due to delving into strategic issues. functions well and has begun succession planning. Governance Directors have a strong governance focus and the ability to independently challenge the Investment Manager, aided by governance updates from the Company Secretary. The Board actively addresses market abuse training budget for ongoing development in areas such as sustainability and accountancy. Recommendations arising from the Board 1 Request that the Investment Manager implements appropriate resources to 2 Further develop a strong governance framework to enable independent challenge of the Investment Manager and allow for smooth internal processes. During 2025, the Board and I will monitor our progress against these recommendations and we will report back to shareholders in our next Annual Report. This Corporate Governance Report is John Leggate CBE, FREng Chair of the Board 22 April 2025 Gresham House GRID Annual Report 2024 69 Corporate governance report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review As the Chair of the Nomination Committee, I have sought out proposals from several independent and experienced recruitment agencies to assist the Company in its search for a sixth Non-Executive Director. After a thorough process, the Board formally approved the appointment of Longwater Partners Ltd on 6 February 2025. Diversity and inclusion The Committee, along with the Company our adoption of a formal Diversity Policy, which outlines the Company’s approach to and commitment to diversity. The Committee reviewed the policy during 2024. In the coming year, the Committee will consider appointments to the Board based on merit, in the context of complementing and expanding the skills, knowledge and experience of the Board as a whole (in accordance with the Equality Act 2010). The current composition of the Board is set out on pages 60 to 61. This Nomination Committee Report is Cathy Pitt Chair of the Nomination Committee 22 April 2025 the Board and both the Nomination Committee and Management Engagement Committee are chaired by female Directors, the Chair of the Board and Senior Independent Director are both male. Succession The Committee, with the Chair of the Board, reviews the Board’s succession planning, taking into consideration the size and composition of the Board, the skills of each Director, the commitment involved in serving on the Board and the tenure of each Director. With three members of the Board all appointed on 24 August 2018, the Committee has begun work to ensure an orderly appointment process that minimises disruption to Board performance. It is likely that the size transition period and/or that one or more excess of nine years in order to ensure a smooth succession. The Committee has reviewed and mapped the skills of each Director alongside the Company’s Three-year Plan and begun to implement a succession plan that seeks to replace the skills and expertise of Directors who are due to retire, while also harnessing the growing pool of Board candidates with BESS expertise. the AIC Code, and no circumstances have could appear to impair, a Non-Executive Director’s independence. Furthermore, all consider the other current interests of the on their ability to discharge their duties to the Company. Directors’ re-election In accordance with the AIC Code, all Directors are required to retire at the themselves for re-election. The Committee considers the skills, experience and knowledge of the Directors each year. Each Director’s biographical details on pages60 to 61 Board considers that their contribution is, and continues to be, important to the Company’s long-term sustainable success. Composition The Board has 40% female representation and has one Board member from in the Listing Rules). Although the Board considers chairing of the Board’s committees as a senior position on As Chair of the Nomination Committee, Iam pleased to present my report for the year ended 31 December 2024, which explains the role of the Committee and its work in the period. The Committee met once during the year and operates within terms of reference aligned with the AIC Code. Meeting attendance by each member can be found on page 67. Role and purpose of the Committee Lead the appointment process Ensure an orderly succession plan is in place for the Board Seek to ensure that a diverse range of skills, viewpoints and characteristics is represented on the Board The Committee also has a responsibility to support the Chair of the Board in an annual which was externally facilitated this year. Directors Directors’ biographical details are set out on pages 60 to 61. Nomination Committee report Gresham House GRID Annual Report 2024 70 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Internal controls and risk management The Committee and I are responsible for compiling this report on our activities and the most recent review conducted in November 2024. We obtained evidence of the internal control frameworks from the Administrator to aid our review, and we also receive quarterly reports from the Company Secretary on any potential internal control failures. The Committee completed its assessment of the Company’s emerging and principal risks, and the details of this assessment are set out in the emerging risks and principal risks, uncertainties assessment, and going concern assessment. Additionally, we review the Company’s risk matrix annually, with the Investment Manager providing quarterly risk reports to the Board. Although the Board retains ultimate responsibility for safeguarding the assets of the Company, it has delegated the day-to-day operation of the Company, to the Investment Manager and the Administrator through written agreements. Throughout the production process of Committee, conducted detailed reviews at various stages to ensure consistency and overall balance. We also scrutinised the to the Company’s assets and liabilities to ensure their appropriateness. The Committee meticulously reviewed and the judgements made during the statements. We considered whether the adopted accounting policies were suitable, given the Company’s As a result of the Committee’s work, the Board is able to conclude that the Annual Report and Financial Statements taken as a whole, are fair, balanced and understandable. They provide the necessary information for shareholders to properly assess the Company’s performance, business model and strategy. conducting the tender process and making recommendations to the Board about the appointment, reappointment and removal of the external Auditor, and approving the remuneration and terms of engagement of the external Auditor; external audit process, taking into consideration relevant UK professional and regulatory requirements; to review and monitor the Auditor’s independence and objectivity and the to develop and implement policy on the engagement of the Auditor to supply non-audit services and considering relevant guidance regarding the provision of non-audit services by the Auditor. Financial statements The Committee is tasked with monitoring of the Company and ensuring that they are fair, balanced and understandable, as required under the AIC Code. Our provide all necessary information for shareholders to assess the Company’s position and performance, business model and strategy. As Chair of the Audit Committee, I am pleased to present the Audit Committee report for the year ended 31 December 2024. My report will explain the role of the Committee and its work this year. the year and operated within terms of reference aligned with the AIC Code. Attendance by each member can be found on page 67. Role and purpose of the Committee statements of the Company and any formal announcements relating to the reviewing the Company’s internal and risk management systems, unless expressly addressed by a separate Board Risk Committee composed of independent Non-Executive Directors, or by the Board itself; Audit Committee report Gresham House GRID Annual Report 2024 71 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review One major decision the Committee made was to change one of the price curve providers we use. This change resulted in a more fair valuation, leading to a reduction in NAV by approximately 10%. This adjustment was driven by key changes to the revenue assumptions, which the Committee reviewed in detail. To further validate our valuation approach, we sought an external independent valuation assessment from Grant Thornton. Their assessment concluded that the Investment Manager’s valuation calculations are fair and reasonable on a fair value basis, providing us with additional After a detailed assessment of our investment valuations, the Committee and the Company’s investments are valued fairly and reasonably. Going concern and viability I also oversaw our review of the going concern statement and viability statement as set out on pages 84 to 85. After thorough evaluation, the Committee was Company is well positioned to continue its operations and meet its liabilities both in the short term and throughout the outlook period. Non-audit services The Committee also reviewed the engagement of the external Auditor on the supply of non-audit services in order to ensure that the independence of the external Auditor is maintained, considering the relevant regulations and ethical guidance in this regard. Company’s Auditor did not provide any non-audit services during the year. Key accounting judgements and estimates I would like to provide an overview of the key accounting judgements we have the Committee has been the high level of judgement involved in determining the valuation of the Company’s unquoted investments. Our Investment Manager is responsible for preparing these valuations, which are meticulously reviewed by the Committee and subsequently approved by the Board. Throughout the year, the valuation of the Company’s investments has been at the forefront of our discussions and analyses. The Committee, with assistance of the Board consultant, has worked closely with the Investment Manager to gain a comprehensive understanding of the methodologies and processes used in calculating these valuations. This understanding has been thoroughly reported to the Board, ensuring transparency and clarity. The Committee also discussed the and agreed that they adhered to high professional and ethical standards. BDO demonstrated the appropriate skills and knowledge about our business, industry, and environment, as well as the regulatory and legal frameworks in which the Company operates. Following the rotation of Marc Reinecke, Acloque has been appointed as the lead audit partner for the Company. In line with best practice, the Company with a tender process every ten years after twenty years. FRC review experience in the energy sector and is well the FRC review. Peter Acloque and the Committee held a thorough discussion regarding the FRC’s review of BDO’s audit quality work. Whilst BDO expressed disappointment in the outcome of the the experience and expertise in the GRID audit team and noted BDO’s investment in improving its audit quality. Consequently, the Audit Committee concluded that it had no concerns regarding recommends that a resolution to reappoint BDO be proposed to shareholders at the next AGM. After evaluating the internal controls and risk management processes, the Committee concluded that there was no current requirement for an internal audit, as these controls and processes were External audit As the Audit Committee, we also make recommendations to the Board regarding the appointment of external Auditor and the maintenance of their independence. We review and comment on the audit strategy paper presented by the Auditor in advance of the audit, which outlines the key risk areas to be addressed independence status. After considering feedback from the Investment Manager and Administrator process, the Committee will recommend to the Board either the reappointment or removal of the Auditor immediately before the conclusion of the annual audit. Auditor independence, objectivity and eectiveness independence as part of the annual reporting process. The Committee reviewed and agreed that BDO, along with the engagement team and other partners and directors involved in the audit, complied with relevant ethical requirements, including the FRC’s Ethical Standard, and were deemed independent of the Company. Gresham House GRID Annual Report 2024 72 Audit Committee report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Whistleblowing The Committee and I reviewed the Investment Manager, Administrator and raise concerns about potential mechanisms are in place for independent and proportionate investigation of such concerns along with appropriate follow-up actions. These protocols are well integrated into the internal policies of both the Investment Manager and the Administrator. I am pleased to report that there were no instances of whistleblowing during the period. Financial reporting I would like to draw your attention to the Directors’ responsibilities statement for preparing the accounts, which is detailed in the statutory and corporate governance section on page 81. Additionally, the statement by the Auditor outlining their reporting responsibilities can be found in the Independent auditor’s report on page 93. This Audit Committee Report is approved Duncan Neale Chair of the Audit Committee 22 April 2025 Gresham House GRID Annual Report 2024 73 Audit Committee report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review The Committee catalysed negotiations to align the annual management fee structure more closely with current market conditions and investor sentiment, culminating in the agreement after the year end to base the fee on market 1 February 2025. that the continued engagement of the Investment Manager is in the best interest of the Company and would support the Company’s long-term sustainable success. Investment Manager monitoring and reviewing the Investment Manager’s performance. The Committee considered issues including the Investment Manager being taken private by Searchlight Capital Partners, the resources committed to the Company, and the need to shift priorities to debt restructuring and asset monetisations, as well as successful completion and operation of projects in light of challenging market conditions and a declining share price. We carefully reviewed the structure of the Investment Manager’s team, key personnel policies and resources. We raised issues on improving communication both with the Board and to external stakeholders. As Chair of the Management Engagement Committee, Iam pleased to present my report for the year ended 31December 2024, which explains the role of the Committee and its work in the period. During the year, the Committee met twice and operated within terms of reference aligned with the AIC Code. The attendance of each member can be found on page 67. Role and purpose of the Committee review the contractual relationship and performance of the Investment Manager; and evaluate key service providers, including the Company Secretary, Broker, Legal Counsel, Depositary, Registrar, and public relations and other advisers. Management Engagement Committee report Key service providers The Committee undertook a comprehensive review of all key which led, among other decisions, We also conducted a thorough discussion regarding the performance of JTC (UK) Limited, which the Company has appointed as both Administrator and Company Secretary. I am pleased to report that we concluded their performance in both roles remains satisfactory. It is important to note that the Company retains the responsibility for appointing or removing the Company Secretary. This Management Engagement Committee report is approved on behalf Isabel Liu Chair of the Management Engagement Committee 22 April 2025 Gresham House GRID Annual Report 2024 74 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review External remuneration consultant The Committee considered the appointment of an external remuneration consultant and agreed that this was not required for 2025 and will review this requirement each year. Review of Directors’ remuneration Our Remuneration Policy, decided by the Committee in 2021, laid out that Non-Executive Directors are entitled to an annual increase in remuneration, December each year. After due consideration, the Committee agreed that an increase in the Directors’ remuneration by 2.5% was appropriate, given the level of work and need to attract and retain talent to the Board. Remuneration Policy, approved in 2023, to match the December 2024 CPI – Consumer price ination, UK – Oce for National Statistics. I believe it is important that our compensation is fair and comparable to that of other non-executive directors of similar companies. Director 2024 fee 2025 fee John Leggate £96,810.55 £99,230.81 Duncan Neale £75,633.25 £78,280.41 Cathy Pitt £54,455.94 £55,817.34 David Stevenson £54,455.94 £55,817.34 Isabel Liu £54,455.94 £55,817.34 As Chair of the Remuneration Committee, Iam pleased to present my report for the year ended 31 December 2024, which explains the role of the Committee and its work in the period. During the year, the Committee met once and operated within terms of reference attendance of each member on page 67. Role and purpose of the Committee in conjunction with the Chair, set the Directors’ remuneration levels; and consider the need to appoint external remuneration consultants. Remuneration Committee report This Remuneration Committee Report is David Stevenson Chair of the Remuneration Committee 22 April 2025 Gresham House GRID Annual Report 2024 75 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Director is involved in the setting of their own remuneration, and remuneration is set by the Remuneration Committee, in line with the Remuneration Policy and aggregate remuneration levels are limited under the Company’s Articles of Association. The level of Directors’ remuneration is in line with the Company’s Remuneration Policy approved by the Company’s shareholders at the Company’s 2023 GM; this will be put to shareholders at the Company’s AGM in 2026. Director remuneration cap The Company will propose an ordinary resolution at the next Annual General Meeting to increase the Directors’ fee cap to £550,000. This increase is recommended in the context of the Company’s succession plan which could result in a temporary expansion in the number of directors on the Board. The Directors are entitled only to their annual fee and to be reimbursed for any expenses properly and reasonably incurred by them respectively in and about the business of the Company or in the discharge of his or her duties as a Director. Any Director who performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, may be paid such reasonable additional remuneration to be determined by the Directors or any committee appointed by the Directors and such additional remuneration shall be in addition to any remuneration provided for by way of 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. accordance with the Articles and their appointment letters. No Director has a service contract with the Company, nor is any such contract proposed. The Directors’ appointments can be terminated in accordance with the Articles and without compensation. Remuneration Policy The remuneration of Non-Executive Directors should be determined with due regard to the experience of the Board as a whole, the time commitment required and to be fair and comparable to that of other non-executive directors of similar companies. The Company may also periodically choose to benchmark Directors’ fees with an independent review, to ensure they remain competitive, fair and reasonable. The Non-Executive Directors are entitled to an annual increase December each year. This Remuneration Policy will be put to shareholders for approval at least every three years and will be tabled for approval at the Company’s AGM in 2026. The fees for the Directors are determined within the limits set out in the Company’s Articles of Association, which states that the Directors’ remuneration for shall, in the aggregate, not exceed £500,000 per annum or such higher resolution, determines. I am pleased to present the Directors’ remuneration report for the year ended 31 December 2024. The report has been produced in accordance with Section 420 of the Companies Act 2006. Under Section 497 of the Companies Act 2006, the Company’s Auditor is required to audit certain disclosures contained in my report. I have indicated where disclosures have been audited. You can nd the Auditor’s opinion in its report on pages 87 to 94. The Remuneration Committee Chair has summarised the decisions made on Directors’ remuneration in the period in his report on page 75. Directors’ remuneration report Gresham House GRID Annual Report 2024 76 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 2023 Fixed salary and fees Period from 01/01/23 to 31/12/23 £ Total variable remuneration Period from 01/01/23 to 31/12/23 £ Total remuneration Period from 01/01/23 to 31/12/23 £ John Leggate 92,908 – 92,908 Duncan Neale 72,585 – 72,585 Catherine Pitt 52,261 – 52,261 David Stevenson 52,261 – 52,261 Isabel Liu 52,261 – 52,261 Total xed remuneration 322,276 – 322,276 2022 Fixed salary and fees Period from 01/01/22 to 31/12/22 £ Total variable remuneration Period from 01/01/22 to 31/12/22 £ Total remuneration Period from 01/01/22 to 31/12/22 £ John Leggate 84,080 – 84,080 Duncan Neale 65,687 – 65,687 Catherine Pitt 47,295 – 47,295 David Stevenson 47,295 – 47,295 Isabel Liu 11, 824 – 11, 824 Total xed remuneration 256,181 – 256,181 Directors’ appointments Director Appointment date John Leggate 14 October 2018 Duncan Neale 14 October 2018 David Stevenson 15 October 2018 Catherine Pitt 28 February 2019 Isabel Liu 26 September 2022 The Directors’ appointment letters are available for inspection at the Company’s months’ notice by either side. The Directors are not entitled to any variable consideration Annual remuneration report The Remuneration Committee considers any change in the Directors’ Remuneration Policy. The report from the Remuneration Committee is set out on page 75. Directors’ remuneration and interests (audited) 2024 Fixed salary and fees Period from 01/01/24 to 31/12/24 £ Total variable remuneration Period from 01/01/24 to 31/12/24 £ Total remuneration Period from 01/01/24 to 31/12/24 £ John Leggate 96, 811 – 96, 811 Duncan Neale 75,633 – 75,633 Catherine Pitt 54,456 – 54,456 David Stevenson 54,456 – 54,456 Isabel Liu 54,456 – 54,456 Total xed remuneration 335,812 – 335,812 Gresham House GRID Annual Report 2024 77 Directors’ remuneration report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Directors As at the date of this report 22 April 2025 As at 31December 2024 John Leggate 191,850 191,850 Duncan Neale 26,432 26,432 Catherine Pitt 40,036 40,036 David Stevenson 30,050 30,050 Isabel Liu 168,759 168,759 * Isabel Liu holds her shares through her PCA. The Company does not oblige the Directors to hold shares in the Company, but this is encouraged to ensure the appropriate alignment of interests. 2024/2025 remuneration Subject to a further review, the remuneration levels for the forthcoming year for the Directors are expected to be at the annual fee level as shown in the table above. In line with the Remuneration Policy described above, the Directors’ remuneration increased at The Board reviews Directors’ remuneration at least annually to ensure that it is in line with market rates. Consideration of shareholders’ views We will put to our shareholders at the Company’s 2025 AGM an ordinary resolution to approve the Directors’ remuneration report. This will present an opportunity for shareholders to express their views and raise any queries in respect of the Remuneration Policy at this meeting. 2021 Fixed salary and fees Period from 01/01/21 to 31/12/21 £ Total variable remuneration Period from 01/01/21 to 31/12/21 £ Total remuneration Period from 01/01/21 to 31/12/21 £ John Leggate 80,000 – 80,000 Duncan Neale 62,500 – 62,500 Catherine Pitt 45,000 – 45,000 David Stevenson 45,000 – 45,000 Total xed remuneration 232,500 – 232,500 Percentage increase from 31 December 2020 to 31December 2021 on salary and annual fees Percentage increase from 31 December 2021 to 31December 2022 on salary and annual fees Percentage increase from 31 December 2022 to 31December 2023 on salary and annual fees Percentage increase from 31 December 2023 to 31December 2024 on salary and annual fees John Leggate 23.0% 5.1% 10.5% 4.2% Duncan Neale 38.8% 5.1% 10.5% 4.2% Catherine Pitt 12.5% 5.1% 10.5% 4.2% David Stevenson 12.5% 5.1% 10.5% 4.2% Isabel Liu n/a 5.1% 10.5% 4.2% reporting periods. Gresham House GRID Annual Report 2024 78 Directors’ remuneration report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Performance graph The graph below represents the Company’s performance during the period since Exchange on 13 November 2018 and shows Ordinary Share price total return and NAV total return performance on a dividends reinvested basis. Both series are rebased to GRID vs FTSE All Share total return GRID – Share price total return FTSE All Share total returnGRID – NAV Total Return Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 May-24 Jul-24 Sep-24 Nov-24 40 60 80 100 120 140 160 180 200 220 240 This graph has been chosen as a comparison as it is a publicly available broad equity index which focuses on smaller companies and is therefore more relevant than most other publicly available indices. Statement of voting at the 2024 Annual General Meeting The Directors’ remuneration report was subject to an advisory vote at the 2024 AGM. The Resolution to approve Directors’ remuneration report Votes % Votes for 327,826,626 99.87% Votes against 426,661 0.13% Total votes validly cast 328,253,287 Total votes cast as % of issued share capital 57.68 Votes withheld 102,213 * Includes discretionary votes ** A vote withheld is not a vote in law and is not counted in the calculation of the votes for or against a resolution. No concerns were noted from the shareholders as part of the AGM. Payments to past Directors or for loss of oce There are no payments to disclose. Under the terms of the Directors’ Remuneration Gresham House GRID Annual Report 2024 79 Directors’ remuneration report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Relative importance of spend on pay Directors’ remuneration in comparison to distributions (dividends and share buybacks) Payments made during the year ended 31December 2024 £ Payments made during the year ended 31December 2023 £ Remuneration to Directors 335,812 322,276 Dividends paid to shareholders – 29,955,837 Buy-back of Ordinary Shares 1,999,590 – Total 2,335,402 30,278,113 David Stevenson Chair of the Remuneration Committee 22 April 2025 Gresham House GRID Annual Report 2024 80 Directors’ remuneration report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Company performance The Directors have reviewed the performance of the Company throughout the period. Details of the performance of the portfolio owned by the Company are included in the Investment Manager’s Report on pages 12 to 14 and the Chair’s Statement on pages 9 to 11. Financial risk management Details in relation to the Company’s use management objectives and policies, including policies for hedging each major type of forecasted transaction for which hedge accounting is used and the Company’s exposure to price, credit, pages 114 to 116. Investment policy portfolio of utility scale energy storage systems, which utilise batteries. The ESS Projects comprising the Portfolio will be located in diverse locations across Great Britain and the Overseas Jurisdictions. Directors’ responsibilities pursuant to DTR4 prepared in accordance with UK adopted international accounting standards and give a true and fair view The Annual Report includes a fair review of the development and performance position of the Company, together with a description of the principal risks and uncertainties that they face. Insurance cover cover is held by the Company in respect of the Directors. the going concern basis unless it is inappropriate to presume that the Company will continue in business; and prepare a Directors’ Report, 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 Company’s transactions and disclose with reasonable accuracy, at any time, 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 that the taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s performance, business model and strategy. Directors’ responsibilities The Directors are responsible for preparing the Annual Report and the applicable law and regulations. Company law requires the Directors to statements and have elected to prepare accordance with UK adopted international accounting standards. Under company law the Directors must not approve the for that period. 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 Additional statutory and corporate governance information Gresham House GRID Annual Report 2024 81 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Individual ESS Projects will be held within special purpose vehicles into which the Company invests through equity and/ or debt instruments. It is intended that each ESS Project Company will hold one ESS Project but an ESS Project Company may own more than one ESS Project. The Company will typically seek legal and operational control through direct or indirect Project Companies, but may participate in joint ventures or co-investments, including, without limitation with other investors or entities managed, operated or advised by the Gresham House Group, where this approach enables the Company to gain exposure to assets within the Company’s investment policy. In such circumstances the Company will seek to secure its shareholder rights through protective provisions in shareholders’ agreements, co-investment agreements and other transactional documents. Asset type and diversication The Company invests primarily in ESS Projects using lithium-ion battery technology as such technology is Company is adaptable as to which energy storage technology is used by the projects in which it invests and will monitor projects and may invest in projects with alternative battery technologies such as sodium and zinc derived technologies, or other forms of energy storage technology (such as air technologies), and will consider such investments (including combinations thereof), where they meet the Company’s investment objective and policy. The Company intends to invest with a view to holding assets until the end of their useful life. ESS Projects may also be disposed of, or otherwise realised, where the 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. ESS Projects will be selected with a view respect of the Portfolio. by geographical location of the ESS Projects in which the Company invests across Great Britain and the Overseas Jurisdictions, provided that no more than 30 per cent. of Gross Asset Value (calculated at the time of investment) may be invested in the Overseas Jurisdictions. Second, it is the Company’s intention that at the point at which any new investment is made, no single project (or interest in any project) will have an acquisition price (or, if an additional interest in an existing investment is being acquired, the combined value of the Company’s existing investment and the additional interest acquired shall not be) greater than 20 per cent. of Gross Asset Value (calculated at the time of investment). Company will be permitted to invest in a single project (or interest in a project) that has an acquisition price of up to a maximum of 30 per cent. of Gross Asset Value (calculated at the time of acquisition). The Company will separate projects at any one time. Third, the Company intends to achieve and varied revenue sources across the Portfolio by investing in ESS Projects Company intends that the ESS Projects in which it invests will primarily generate revenue from in front of meter services, but may also provide behind-the-meter services. The Company may invest in changes to its equipment, technical access revenue streams as they become available, noting that revenue streams and revenue stacking continues to evolve not only in Great Britain but also in the Overseas Jurisdictions as the energy storage market matures. ESS Projects in which the Company invests may diversify their revenue sources further by collaborating with renewable generators or large users of power in close proximity to an ESS Project, or providing availability based services to restore electric power stations or part of electric grids to operation. The Company may also invest in ESS Projects with Co- Location Arrangements in the Overseas Jurisdictions, and may purchase solar panels for use at such co-located ESS Projects in the Overseas Jurisdictions provided that the proportion of an investment spent on purchases of solar panels does not exceed six per cent. of Gross Asset Value (calculated at the time of such purchase). Fourth, the Company aims to achieve the use of a range of third-party providers, insofar as appropriate, in respect of each energy storage project such as developers, EPC contractors, battery manufacturers and landlords. Finally, each ESS Project internally mitigates operational risk because each ESS Project will contain a battery system with a number of battery modules in each stack, each of which is independent and can be repaired, upgraded or replaced separately, thereby reducing the impact on the project as a whole of the failure of one or more battery modules. Other investment restrictions The Company will generally acquire ESS Projects where construction is substantially complete and where ESS Projects are capable of commercial operations (“Operational Projects”). Operational Projects will need to have in the form of a freehold interest or substantially similar interest in the Overseas Jurisdictions or a completed lease on satisfactory terms in relation to the land where that ESS Project is situated, a grid connection agreement or grid sharing or such other rights to import or export from the relevant network as are market standard and completion of commissioning completion. Gresham House GRID Annual Report 2024 82 Additional statutory and corporate governance information Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review The Company may also acquire ESS Projects or rights to acquire ESS Projects which are considered “shovel ready” that land rights either in the form of a freehold interest or substantially similar interest in the Overseas Jurisdictions or a completed lease, lease option, or agreement for lease, on satisfactory terms in relation to the land where that ESS Project is situated, full planning permission enabling the construction of a suitable ESS Project on grid sharing or such other rights to import or export from the relevant network as are market standard prior to connection works being completed (“Ready to Build Projects”). The Company may invest in Ready to Build cent. Of Gross Asset Value (calculated at the time consideration is paid for such acquisition) may be exposed in aggregate to such Ready to Build Projects. If the Company wishes to acquire other Ready to Build Projects in excess of the 10 per cent. of Gross Asset Value restriction, it may acquire such Ready to Build Projects for a nominal upfront consideration provided that (i) any remaining consideration is paid by the Company only where construction is substantially complete and where such ESS Projects are capable of commercial operations and (ii) the Company has a put option to transfer back the Ready to Build Project to the seller in certain circumstances. to ESS Project Companies before they hold Operational Projects so that the ESS Project Companies can acquire equipment or make payments in connection with the ESS Projects’ construction or delivery, provided that no more than 25 per cent. of Gross Asset Value (calculated at the the latest available valuations) may be exposed in aggregate to any such loans. Once an Operational Project is acquired, or after a Ready to Build Project becomes an Operational Project, the Company may invest in upgrades by loans or otherwise and enter into new lease arrangements to increase the size of the site, new planning permissions enabling construction of an increased capacity ESS Project on that land, a new and/or amended grid connection which provides for increased capacity or altered technical parameters, and/or an EPC contract, EPCm contract suite or other construction contracts to undertake construction of the relevant upgrades. The Company does not intend to invest in listed closed-ended investment funds or in any other investment fund (other than, potentially, in money market funds as cash equivalents) and in any event shall not invest any more than 15 per cent. of its total assets in listed closed- ended investment funds or in any other investment fund. Investment in Developers The Company may invest in one or more Developers of ESS Projects through equity issued by the relevant Developer, provided that investment in Developers (calculated at the time of investment) shall be capped at £1mn in aggregate. Cash management Uninvested cash or surplus capital may be cash or cash equivalents, money market instruments, money market funds, bonds, commercial paper or other debt obligations with banks or other counterparties having a “single A” or higher credit rating as determined by any internationally recognised rating agency selected by the Board which, may or may not be registered in the European Union; and any UK “government and public of the FCA Rules. Leverage and derivatives The Company may raise debt and introduce leverage (at the Company level and/or the level of one or more of its subsidiaries, such leverage to be introduced directly or through one or more subsidiaries) to the extent funding is available on acceptable terms. In addition, it may from time to time use borrowing for short-term liquidity purposes which could be achieved through a loan facility or other types of collateralised borrowing instruments. The Group is permitted to provide security to lenders in order to borrow money, which may be by way of mortgages, charges or other security interests or by way of outright transfer of title to the Group’s assets. The Directors will restrict borrowing to an amount not exceeding 50 per cent. of the Company’s Net Asset Value at the time of drawdown. There will be no cross-collateralisation between the ESS Projects. Derivatives may be used for currency, interest rate and power price hedging portfolio management. However, the Directors do not anticipate that extensive use of derivatives will be necessary. Ecient portfolio management techniques may be employed by the Group, and this may include (as relevant) currency hedging, interest rate hedging and power price hedging. Gresham House GRID Annual Report 2024 83 Additional statutory and corporate governance information Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Both the base case and the downside case show the Company is expected to have obligations and commitments as they fall due and that the debt covenants of MidCo’s debt facility, which include interest cover and leverage tests, are expected to be met. The underlying investments have valuable assets which could be sold to reasonable expectation that the Company has adequate resources to continue its operations for at least 12 months from the As such, the Directors have adopted the going concern basis in preparing the Viability statement The Directors have assessed the prospects of the Company for the period to June 2028. Although the Company beyond this period for valuation purposes, there is less certainty over the later cash investment portfolio is driven by future pricing volatility in the electricity market. The next continuation vote is to be held by June 2028. We therefore limit the review to three and a half years to reduce this uncertainty in forecasting and which also expires in October 2028, shortly after the end of the viability assessment period. debt and interest payments expected within the MidCo, committed expenditure for construction projects, and the ongoing administrative costs of the Company. The discussions has not been taken into account in the Company’s going concern As described in the Chair’s statement on pages 9 to 11 and in the Investment Manager’s report on pages 12 to 14 the Company’s investments experienced a negative trading environment during large parts of 2024 due to under-utilisation of batteries in the BM. Systems changes made by NESO during 2024 to improve the use of batteries have already resulted in environment since Q4 2024 which has continued into 2025. The Directors have applied two scenarios i. a base case assessment, based on the blended central case forecasts provided by third-party consultants; and ii. a severe but plausible downside case scenario which assumes a reduction in underlying portfolio revenues of 20% to the base case. Going concern As at 31 December 2024, the Company had net current assets of £4.2mn and net cash balances of £4.0mn (excluding cash balances within investee companies) and no debt. The Company is a guarantor to the £195mn debt facility (£110mn capex facility, £75mn incremental facility and £10mn revolving credit facility) entered into by the MidCo in September 2021 and amended and restated in November 2022 and April 2024 which was £150mn drawn at the year end. The MidCo renegotiated the facility in April 2024 to reset debt covenant levels in line with the lower revenue environment at the time and to reduce the total available facility. There enable completion of the projects already under construction. As set out on page 15 the Company is in advanced discussions with a group of lenders to replace the existing debt facility. The new facility is expected to provide the Company with increased projects as well as lower debt costs on Financial models have been prepared for the going concern period which consider liquidity at the start of the period and key level as well as at the operational project expected cash generated by the portfolio companies available to be distributed to the Company. Amendment to and compliance with investment policy No material change will be made to the investment policy without the approval of Shareholders by ordinary resolution. In the event of any material breach of the investment restrictions applicable to the Company, Shareholders will be informed of the actions to be taken by the Manager through a Regulatory Information Service. Going concern and viability The Annual Report describes the Company’s business activities, together performance and development and an assessment of the principal risks and uncertainties facing the Company. The key risks facing the Company include, but are not limited to, the risks mentioned on pages 51 to 55. The Board notes that business over the long term given the inherent uncertainty involved and that the risks associated with investments within the infrastructure sector could Company’s performance. Gresham House GRID Annual Report 2024 84 Additional statutory and corporate governance information Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Post balance sheet events Post balance sheet events are disclosed in Note 24 of the accounts on page 120. Website publication The Directors are responsible for ensuring statements are made available on the Company’s website. Financial statements are published on the Company’s website in accordance with legislation in the UK governing the statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. statements contained therein. Capital structure and voting rights Information about the Company’s capital structure and voting rights is set out in pages 118 to 119. The Directors were granted the authority at the 2024 AGM to issue new Ordinary Shares, on a non-pre-emptive basis, of up to an aggregate nominal value of £573,444.69, representing approximately 10% of the issued Ordinary Share capital as at June 2024. Based on the assessment of the Company’s with cash available to the MidCo and the forecasts of the Company’s future performance under the various scenarios, the Board has a reasonable expectation that the Company remains viable and can meet its liabilities as they fall due over the period to June 2028. During the year the Company converted £613mn of its loan due from MidCo into equity in order to mitigate against Value Added Tax rule changes post Brexit. The conversion of the loan due from MidCo into equity changes the optics of the Company’s paid up to the Company, interest from external parties and valuation gains or losses will appear as income. The Company will ensure the Alternative Performance Measures continue to provide transparency in relation to the performance of the Company and its portfolio. Share capital At the year end, the Company had in issue 573,444,694 Ordinary Shares. There are no other share classes in issue. The Company has repurchased 4,380,555 Ordinary Shares in the period. All shares have voting rights; each Ordinary Share has one vote. 4,380,555 shares were held in treasury as at 31 December 2024. models have been prepared for the viability period which consider liquidity at assumptions at the Company level as well as at the operational project level. These cash generated and distributed by the debt and interest payments expected within the MidCo, committed expenditure for investments and expected dividends as well as the ongoing administrative costs of the Company. Sensitivities in line with those undertaken in the going concern assessment have been applied to the viability period. As set out elsewhere in this Annual Report, the Company is currently in discussions existing facility and provide additional funds to enable the augmentation of certain projects and the acquisition and buildout of new projects. The expected cost of debt and the covenant terms for the replacement facility are expected to be lower than the existing facility, providing the Company with a greater level of been putting in place long-term revenue risk associated with the projects and debt servicing. The upside potential resulting from the replacement facility has not been taken into account in the Company’s Further, the Directors were also granted the authority to make market purchases of its own Ordinary Shares from time to time of up to 85,302,714 of its Ordinary Shares, or, if less, 14.99% of the Company’s issued Ordinary Share capital. No new share issues or market purchases of the Company’s own Ordinary Shares were conducted under these authorities. Following a successful application to the High Court and lodgement of the Company’s statement of capital with the Registrar of Companies during the year, the Company cancelled its share premium account and merger relief reserve. Directors’ report For the purposes of the UK Companies Act 2006, the Directors’ report for Gresham House Energy Storage Fund plc comprises of pages 60 to 85. John Leggate CBE, FREng Chair 22 April 2025 Gresham House GRID Annual Report 2024 85 Additional statutory and corporate governance information Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Accounts Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review We performed checks on the forecasts approved by the Directors. We formed our own assessment of risks and uncertainties that could impact the Company based on evidence obtained in other audited areas as applicable and our knowledge of the industry. We assessed the ability of the Directors’ to forecast accurately by comparing the explanations for variances. We obtained the Directors’ severe but plausible downside scenario and reviewed if this scenario, which included 20% reduction in underlying portfolio revenues compared to the base case, was reasonable. We reviewed the terms and conditions by the Midco, to which the Company is repayment terms for capital and interest and covenants in place. We reviewed the Directors’ calculations of forecast covenant compliance and assessed the ability of the Midco to meet these covenants even under the severe but plausible downside case scenario. We obtained and reviewed current year assess if the Company had complied with its covenants. Conclusions relating to going concern have concluded that the Directors’ use of the going concern basis of accounting in is appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going We obtained the Directors’ Going forecasts in respect of their assessment of going concern and challenged the key underlying judgements and assumptions. In doing so we compared the forecast revenue to third party prepared price curves, and the forecast operating and capital expenditures to contractual obligations and recent performance trends to assess if they were reasonable. We assessed the forecast projected management fees to assess if the charge is in line with the current assets under management levels and the reasonableness of projected changes in management fees for the forecast period were reasonable. of the fund and underlying portfolio (as of 31 March 2025) used in the cash account balances. 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 statements section of our report. We believe that the audit evidence we have provide a basis for our opinion. Our audit opinion is consistent with the additional report to the audit committee. Independence Following the recommendation of the audit committee, we were appointed by the Board of Directors in December 2019 year ended ending 31 December 2019 period of total uninterrupted engagement including retenders and reappointments is six years, covering the years ended We remain independent of the Company in accordance with the ethical requirements statements in the UK, including the FRC’s Ethical Standard as applied to listed public other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Company. Opinion on the nancial statements give a true and fair view of the state 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. of Gresham House Energy Storage Fund plc (the ‘Company’) for the year ended 31 December 2024 which comprise of the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of statements, including a summary of material accounting policy information. has been applied in their preparation is applicable law and UK adopted international accounting standards. Independent auditor’s report to the Members of Gresham House Energy Storage Fund plc Gresham House GRID Annual Report 2024 87 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review An overview of the scope of our audit Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system of internal control, and assessing the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most engagement team. These matters were addressed in the context of our audit of the provide a separate opinion on these matters. disclosures regarding going concern to satisfy ourselves that the disclosures are appropriate and consistent with the Directors’ going concern assessment. Based on the work we have performed, uncertainties relating to events or conditions that, individually or on the Company’s ability to continue as a going concern for a period of at least statements are authorised for issue. In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors’ statement 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. Overview Key audit matters 2024 2023 Valuation of unquoted investments 3 3 Materiality Company nancial statements as a whole Gresham House GRID Annual Report 2024 88 Independent auditor’s report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Key audit matter Valuation of unquoted investments page 107 and Note 17 on page111 As detailed in Note 11, the Company owns an investment portfolio of unquoted equity and loan investments, which as described in the summary of accounting policies are held at fair value in the Company Financial Statements. The valuations of the investments is a subjective accounting estimate where there is an inherent risk of management override arising from investment valuations being prepared by the Investment Manager, who is remunerated based on the Net Assets Value (NAV) of the Company. The Company has engaged an independent expert valuer to help mitigate the risk. and estimates from management including, but not limited to discount rates, changes in net revenue yield and changes in energy generation. Changes to the estimates and/or judgements can result, either on an individual or aggregate basis, in a material change to the valuation of unquoted investments and therefore we considered this to be a key audit matter. How the scope of our audit addressed the key audit matter We assessed the design and implementation of controls around the valuations of investments; We evaluated the prior year assumptions through a budget versus actual comparison of the results for each portfolio investment for the year to December 2024 to challenge challenge the forward-looking assumptions; We conducted research on the battery storage market and challenged the relevant assumptions accordingly; unusual arrangements or limitation on the scope of their work; period actual results We held discussions with the project managers of the assets to critically challenge Management’s assumptions and obtain evidence to support this discussion; We critically assessed how management have considered the implications and impact of climate change in the valuation; discussions with them to understand the model assumptions and how the models are produced; We compared the revenue yield curve to those disclosed by competitors and assessed the impact on the valuations; Gresham House GRID Annual Report 2024 89 Independent auditor’s report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review How the scope of our audit addressed the key audit matter For investments where the battery asset is under construction, we challenged the policy applied to fair value these investments through obtaining an understanding of the status of each project and the risks of the projects, through discussions with Management and external tracker logs from third party contractors. For the construction risk premium applied, we benchmarked this against other companies and considered the risks in the projects. With the assistance of our internal valuation experts, we have critically assessed and challenged the discount rate premium used; We agreed period end working capital adjustments in determining the fair value of the portfolio companies to the working capital recognised in the management accounts of the portfolio companies as well as bank statements, invoices and VAT returns; We agreed the movements in loans provided to the portfolio companies, including verifying interest rates to underlying loan agreements, vouching cash movements to bank statements and re-performing the calculation of interest; For forecasted maintenance capital expenditure (‘capex’), we have critically challenged management’s assessment by benchmarking the assumptions used to market research data and underlying data; and For capacity upgrade capex and construction capex, we have agreed the total capex to EPC contracts or other relevant documentation. Key observations: Based on the audit procedures performed, we found the estimates and judgements made by the management in relation to the valuation to be within a reasonable range. Gresham House GRID Annual Report 2024 90 Independent auditor’s report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Our application of materiality We apply the concept of materiality both in planning and performing our audit, and in In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not misstatements, and the particular circumstances of their occurrence, when evaluating Company nancial statements 2024 2023 Materiality £9,300,000 £11,100,000 Basis for determining materiality 1.5% Net assets 1.5% Net assets Rationale for the benchmark applied As an investment trust, we consider that the net asset value is the key measure statements. £6,510,000 £7,770,000 Basis for determining performance materiality 70% of materiality Rationale for the percentage applied for performance materiality The level of performance materiality applied was set after having considered a number of factors including the expected total value of known and likely misstatements and the level of transactions in the year. Specic materiality In 2023, we determined that for transactions and balances that impact on the Company’s dividends and revenue ceasing to be earned in 2024 following the loan with Gresham House Energy Storage Holdings plc being converted to equity. Reporting threshold We agreed with the Audit Committee that we would report to them all individual audit below this threshold that, in our view, warranted reporting on qualitative grounds. Other information The directors are responsible for the other information. The other information comprises the other information and, except to the extent otherwise explicitly stated in our 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 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 themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Gresham House GRID Annual Report 2024 91 Independent auditor’s report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Corporate governance statement The UK Listing Rules require us to review 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 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 Going concern and longer-term viability The Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties page 72; and The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate set out on page 84 and 85. Other Code provisions Directors’ statement on fair, balanced and understandable set out on page 81; assessment of the emerging and principal risks set out on page 71; The section of the annual report that describes the internal control systems set out on page 71; and The section describing the work of the audit committee set out on page 71. Other Companies Act 2006 reporting Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below. Strategic report and Directors’ report In our opinion, based on the work undertaken in the the information given in the Strategic report and the the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Company and its environment obtained in the course of the strategic report or the Directors’ report. Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. Matters on which we are required to report by exception We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or Directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or certain disclosures of Directors’ remuneration we have not received all the information and explanations we require for our audit. Gresham House GRID Annual Report 2024 92 Independent auditor’s report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Responsibilities of Directors As explained more fully in the Directors’ responsibilities statement, the Directors are they give a true and fair view, and for such internal control as the Directors determine is misstatement, whether due to fraud or error. 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. Auditor’s responsibilities for the audit of the nancial statements 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 Extent to which the audit was 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 material misstatements in respect of irregularities, including fraud. The extent to which our Non-compliance with laws and regulations Our understanding of the Company and the industry in which it operates; Discussion with management and those charged with governance; and Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations; FCA listing and DTR rules, the principles of the AIC Code of Corporate Governance, industry practice represented by the AIC SORP, the applicable accounting framework, of this would lead to the Company losing various deductions and exemptions from corporation tax. supporting documentation; Enquiries of management and those charged with governance relating to the existence of any non-compliance with laws and regulations; Reviewing minutes of meeting of those charged with governance throughout the period for instances of non-compliance with laws and regulations; and Reviewing the calculation in relation to Investment Trust compliance to check that the Company was meeting its requirements to retain their Investment Trust Status. Gresham House GRID Annual Report 2024 93 Independent auditor’s report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Fraud including fraud. Enquiry with management and those charged with governance regarding any known or suspected instances of fraud; – Detecting and responding to the risks of fraud; and – Internal controls established to mitigate risks related to fraud. Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; Discussion amongst the engagement team as to how and where fraud might occur in Based on our risk assessment, we considered the areas most susceptible to be valuation of unquoted investments and management override of controls. The procedures set out in the Key Audit Matters section above; We obtained the ISAE 3402 from Deloitte for the 12 months ended 30 September 2024 and bridging letter from Cas van Aardenne (Associate Director – ICS Operations), and we have reviewed and assessed the design and implementation of controls over management override; We critically reviewed estimates and judgements applied by Management in the systematic bias; deliberate misstatement; documentation and evaluating whether there was evidence of bias by the Investment Manager and Directors that represented a risk of material misstatement due to fraud; and Undertaken interviews with various members of the management and operational team to provide further risk assessment around fraud and the potential for it to occur. to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the become aware of it. A further description of our responsibilities is available on the Financial Reporting www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. 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. Peter Acloque (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor London, United Kingdom 22 April 2025 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). Gresham House GRID Annual Report 2024 94 Independent auditor’s report Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Statement of Comprehensive Income For the year ended 31 December 2024 For the year ended 31December 2024 Note Revenue (£) Capital (£) Total (£) Net return on investments and loss 7 9,927,827 (117, 96 0,53 4) (108,032,707) Other income 886,814 – 886,814 Total income 10,814,641 (117,960,534) (107,145,893) Administrative and other Legal and professional fees (671,195) (99,986) (771,181) Other administrative expenses 8 (7,938 ,537) (36,000) (7, 974,537) Total administrative and other expenses (8,609,732) (135,986) (8,745,718) Prot/(loss) before tax 2,204,909 (118,096,520) (115, 891,611) Taxation 9 – – – Prot/(loss) and total comprehensive income/(loss) for the year 2,204,909 (118,096,520) (115,891,611) Earnings/(loss) per share (basic and diluted) – pence 10 0.39 (20.71) (20.32) The total column of this statement is the Statement of Comprehensive Income of the Company prepared in accordance with UK adopted International Accounting Standards (UKIAS). The supplementary revenue return and capital columns have been prepared in accordance with the Association of Investment Companies Statement of Recommended Practice (AIC SORP). All results are derived from continuing operations. The notes starting on page 100 For the year ended 31December 2023 Note Revenue (£) Capital (£) Total (£) Net return on investments and loss 7 45,457,656 (146,752,282) (101,294,626) Other income 1,191,194 – 1,191,194 Total income 46,648,850 (146,752,282) (100,103,432) Administrative and other Legal and professional fees ( 787,152) (92,567) (879,719) Other administrative expenses 8 (9,075,204) (52,545) (9,127,749) Total administrative and other expenses (9,862,356) (145,112) (10,0 07,468) Prot/(loss) before tax 36,786,494 (146,897,394) (110,110,900) Taxation 9 – – – Prot/(loss) and total comprehensive income/(loss) for the year 36,786,494 (146,897,394) (110,110,900) Earnings/(loss) per share (basic and diluted) – pence 10 6.57 (26.22) (19.65) Gresham House GRID Annual Report 2024 95 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review As at 31 December 2024 Company number 11535957 Note 31 December 2024 (£) 31 December 2023 (£) Non-current assets Investments in subsidiaries at fair value 11 618 ,037,14 4 727,981,694 Current assets Cash and cash equivalents 13 4,044,450 14,073,513 Trade and other receivables 14 777,173 525,310 Total current assets 4,821,623 14,598,823 Total assets 622,858,767 742,580,517 Current liabilities Trade and other payables 15 (615,431) (2,433,017) Total net assets 622,243,336 740,147,50 0 Shareholders’ equity Share capital 20 5,734,447 5,734,447 Treasury shares 20 (2,012,553) – Share premium 20 – 543,915,072 Merger relief reserve 20 – 13,299,017 Capital reduction reserve 20 561,106,626 3,892,537 Capital reserves 20 2,256,577 120,353,097 Revenue reserves 20 55,158,239 52,953,330 Total shareholders’ equity 622,243,336 740,147,500 Net Asset Value per Ordinary Share (pence) 19 109.35 129.07 John Leggate CBE, FREng Chair 22 April 2025 The notes starting on page 100 Statement of Financial Position Gresham House GRID Annual Report 2024 96 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review For the year ended 31 December 2024 Note Share capital (£) Treasury shares (£) Share premium (£) Merger relief reserve (£) Capital reduction reserve (£) Capital reserves (£) Revenue reserves (£) Total shareholders’ equity (£) Shareholders’ equity at 1 January 2024 5,734,447 – 543,915,072 13,299,017 3,892,537 120,353,097 52,953,330 740,147,50 0 – – – – – (118,096,520) 2,204,909 (115, 891,611) Transactions with owners: Cancellation of share premium reserve 20 – – (543,915,072) – – – – (543,915,072) Cancellation of merger relief reserve 20 – – – (13,299,017) – – – (13,299,017) Transfer to capital reduction reserve 20 – – – – 557,214,0 89 – – 557, 214,0 89 Issue of class B shares 20 13,299,017 – – – – – – 13,299,029 Cancellation of class B shares 20 (13,299,017) – – – – – – (13,299,029) Share buyback 20 – (2,012,553) – – – – – (2,012,553) Shareholders’ equity at 31 December 2024 5,734,447 (2,012,553) – – 561,106,626 2,256,577 55,158,239 622,243,336 Statement of Changes in Equity Gresham House GRID Annual Report 2024 97 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Note Share capital (£) Share premium (£) Merger relief reserve (£) Capital reduction reserve (£) Capital reserves (£) Revenue reserves (£) Total shareholders’ equity (£) Shareholders’ equity at 1 January 2023 5,412,904 495,230,993 13,299,017 3,892,537 267,250,491 56,659,720 841,745,662 – – – – (146,897,394) 36,786,494 (110,110,9 0 0) Transactions with owners: Ordinary Shares issued at a premium during the year 20 321,543 49,678,457 – – – – 50,000,000 Share issue costs 20 – (994,378) – – – – (994,378) Dividends paid 20 – – – – – (40,492,884) (40,492,884) Shareholders’ equity at 31 December 2023 5,734,447 543,915,072 13,299,017 3,892,537 120,353,097 52,953,330 740,147,50 0 The notes starting on page 100 Gresham House GRID Annual Report 2024 98 Statement of Changes in Equity Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review For the year ended 31 December 2024 Note 31 December 2024 (£) 31 December 2023 (£) Cash ows used in operating activities Loss for the year (115, 891,611) (110,110, 90 0 ) Net loss on investments at fair value 7 117,9 60, 534 146,752,282 Interest income (10,295,053) (46,028,273) Dividend income – (83,591) Increase in trade and other receivables (251,861) (307,612) (Decrease)/increase in trade and other payables (1, 817, 587 ) 1,861,997 Net cash used in operating activities (10,295,578) (7,916,097) Cash ows used in investing activities Loans made to subsidiaries 11 (4,200,000) (2,004,828) Loans repaid by subsidiaries 11 6 ,111,8 42 7,500,000 Bank interest received 367,226 654,208 Net cash received from investing activities 2,279,068 6,149,380 Statement of Cash Flows Note 31 December 2024 (£) 31 December 2023 (£) Cash ows used in nancing activities Proceeds from issue of Ordinary Shares at a premium 20 – 50,000,000 Share issue costs 20 – (994,378) Share buyback 20 (2,012,553) – Dividends paid 20 – (40,492,884) Net cash (outow)/inow from nancing activities (2,012,553) 8,512,738 Net (decrease)/increase in cash and cash equivalents for the year (10,029,063) 6,746,021 Cash and cash equivalents at the beginning of the year 14,073,513 7,327,492 Cash and cash equivalents at the end of the year 4,044,450 14,073,513 The notes starting on page 100 Gresham House GRID Annual Report 2024 99 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review For the year ended 31 December 2024 1. General information Gresham House Energy Storage Fund plc (the “Company”) is a company limited by shares and is listed on the special fund segment of the London Stock Exchange. The Company was incorporated in England and Wales on 24 August 2018 with Company number 11535957 as a closed-ended investment company. The Company’s business is as an investment trust within the meaning of Chapter 4 of Part 24 of the Corporation Street, London, EC3M 7AF. Its share capital is denominated in Pounds Sterling (GBP or £) and currently consists of Ordinary Shares. Through its subsidiaries, the Company’s utility-scale Battery Energy Storage Systems (BESS), which utilise batteries and may also utilise generators. The BESS projects comprising the investment portfolio are located in diverse locations across Great Britain. comparatives for the year ended 31 December 2023 and comprise only the results of the Company as all its subsidiaries are measured at fair value. 2. Basis of preparation Statement of compliance with UK adopted International Accounting Standards (IFRS UK). The accounts have Where presentational guidance set out in the Statement of Recommended Practice (the SORP) “Financial Statements of Investment Trust Companies and Venture Capital Trusts”, issued by the Association of Investment Companies (AIC) is consistent with the on a basis compliant with the recommendations of the SORP. The supplementary information which analyses the Statement of Comprehensive Income between items of revenue and a capital nature is presented in accordance with the SORP. Functional and presentation currency The currency of the primary economic environment in which the Company operates (the functional currency) is Pound Sterling (GBP or £) which is also the presentation currency. Going concern As at 31 December 2024, the Company had net current assets of £4.2mn including cash balances of £4.0mn (excluding cash balances within investee companies) and no debt. The Company is a guarantor to the £195mn debt facility (£110mn capex facility, £75mn incremental facility and £10mn revolving credit facility) entered into by the MidCo in September 2021 and amended and restated in November 2022 and April 2024 which was £150mn drawn at the year end. The MidCo renegotiated the facility in April 2024 to reset debt covenant levels in line with the lower revenue environment at the time and to completion of the projects already under construction. As set out on page 15 the Company is in advanced discussions with a group of lenders to replace the existing debt facility. The new facility is expected to provide the Company on the current borrowings. Notes to the Financial Statements Gresham House GRID Annual Report 2024 100 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Financial models have been prepared for the going concern period which consider cash generated by the portfolio companies available to be distributed to the Company. debt and interest payments expected within the MidCo, committed expenditure for construction projects, and the ongoing administrative costs of the Company. The upside As described in the Chair’s statement on pages 9 to 11 and in the Investment Manager’s report on pages 12 to 14 the Company’s investments experienced a negative trading environment during large parts of 2024 due to under-utilisation of batteries in the BM. Systems changes made by NESO during 2024 to improve the use of batteries have which has continued into 2025. a base case assessment, based on the blended central case forecasts provided by third-party consultants; and a severe but plausible downside case scenario which assumes a reduction in underlying portfolio revenues of 20% to the base case. Both the base case and the downside case show the Company is expected to have due and that the debt covenants of MidCo’s debt facility, which include interest cover and leverage tests, are expected to be met. The underlying investments have valuable adequate resources to continue its operations for at least 12 months from the date 3. Signicant accounting judgements, estimates and assumptions 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 Assessment as an investment entity subsidiaries unless their subsidiaries provide investment management services to the Company and the subsidiaries are not themselves investment entities. To determine that 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 its investments on a fair value basis. the stated strategy of the Company is to deliver stable returns to shareholders through a mix of battery 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. Gresham House GRID Annual Report 2024 101 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review The Company also meets the typical characteristics of an investment entity as it (via the MidCo) holds more than one investment, has more than one investor, has investors that are not related parties of the Company and it has ownership interests in the form of equity or similar interest. Based on the above factors the Directors are of the opinion that in the standard. The Directors will reassess this conclusion on an annual basis. Assessment of the MidCo as an investment entity The MidCo (see Note 11) is not consolidated by the Company as the MidCo is also considered to be an investment entity. The Board of the MidCo has considered the Company would be required to consolidate the MidCo. The net assets of the MidCo have Note 11 includes an overview of the balances within the MidCo and what would be included in the accounts of the Company if the Company were required to consolidate the entity. Investment Manager not a related party and responsibility for planning, directing and controlling the activities of the entity. The Directors are of the opinion that the AIFM does not meet these criteria as the Board has to approve key decisions. The AIFM is restricted to the delivery of the investment policy. Valuation of investments in subsidiaries recorded for the fair value of the investments. By their nature, these estimates and Note 17 for further details. 4. New standards, amendments and interpretations published New and revised IFRSs in issue that came into eect during the year: annual reporting periods beginning on or after 1 January 2024 and are not deemed to Amendments to IAS 7 and IFRS 7 Amendments to Lease Liability in a Sale and Leaseback – IFRS 16 General Requirements for Disclosure of Sustainability-related Financial Information – IFRS S1 Climate-related Disclosures – IFRS S2 New and revised IFRSs in issue but not yet eective: Certain new accounting standards and amendments to accounting standards and interpretations have been published that are not mandatory for reporting periods ending 31 December 2024 and have not been early adopted by the Company. These standards, amendments or interpretations are not expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future The new and amended standards and interpretations that are issued, but not yet Company intends to adopt these new and amended standards and interpretations, if Amendments regarding deferred tax on leases and decommissioning obligations – IAS 12 (amended) IFRS 17 (amended) Amendments to add requirements for an entity to determine whether a currency is exchangeable into another currency and the exchange rate to use when it is not – IAS 21 (amended) Gresham House GRID Annual Report 2024 102 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 5. Summary of material accounting policies Segmental information The Board is of the opinion that the Company is engaged in a single segment business, being the investment in the United Kingdom in battery energy storage assets. Income and expenses (excluding investments) Income and expenses are accounted for on an accruals basis. The Company’s income and expenses are charged to the Statement of Comprehensive Income. Costs directly relating to the issue of Ordinary Shares are charged to share premium. In the Statement of Cash Flows, accruals for interest income and dividend income are Interest income and dividend income received in cash are added under investing activities if they have been capitalised to the underlying interest or are dividend- earning instruments. Net gain or loss on investments at fair value through prot and loss The Company recognises movements in the fair value of investments in subsidiaries or losses are adjusted for within operating activities. Taxation The Company is approved as an Investment Trust Company (ITC) under Sections 1158 and 1159 of the Corporation Tax Act 2010 and Part 2 Chapter 1 Statutory Instrument 2011/2999 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 Corporation Tax Act 2010 and the Statutory Instrument 2011/2999. 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 2015 there was a single corporation tax rate of 19%. This rate has increased to 25% since 1 April 2023. 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. The Company may use taxable losses from within the Group to relieve taxable corporation tax does impact on the valuation of the Company’s investments. 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 In accordance with the exemption under IFRS 10 Consolidated Financial Statements, the Company is an investment entity and only consolidates subsidiaries that provide investment management services and which are not themselves investment entities. Investments in subsidiaries comprise of equity interests and loans but in respect of each subsidiary are treated as a single investment as investment decisions are made Financial instruments liabilities at initial recognition into the categories of amortised cost or fair value through Financial assets Gresham House GRID Annual Report 2024 103 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Financial assets measured at amortised cost principal and interest on the principal amount outstanding. The Company includes in this and trade and other receivables. Financial liabilities measured at amortised cost Financial assets measured at fair value through prot or loss (FVPL) a) payments of principal and interest (SPPI) on the principal amount outstanding; b) it is not held within a business model whose objective is either to collect contractual c) The Company’s investment in subsidiaries (which comprises both debt and equity of the investment does not meet the SPPI test nor will the Company elect to designate the investments at fair value through other comprehensive income. The debt investment forms part of a group of assets that are managed, and the performance evaluated on a fair value basis. Recognition and derecognition Financial assets are derecognised on the date on which the Company commits to sell an liability is discharged, cancelled or expired. 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. 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 best and highest value use for that asset. or liabilities. fair value measurement is directly or indirectly observable. fair value measurement is unobservable. For assets and liabilities that are carried at fair value and which will be recorded in the have occurred between levels in the hierarchy by reassessing categorisation at the end of each reporting period. Investments in subsidiaries are treated as Level 3 as the inputs used to determine their basis in accordance with IFRS 13. Measurement is discussed in further detail in Note 17. Gresham House GRID Annual Report 2024 104 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 6. Fees and expenses Accounting, secretarial and Directors JTC (UK) Limited has been appointed to act as Secretary and Administrator for the Company through the Administration and Company Secretarial Agreement. JTC (UK) Limited is entitled to a £65,280 annual fee for the provision of Company Secretarial services and a £59,840 annual fee for the provision of fund accounting and administration services, based on a Company Net Asset Value of up to £200mn. An ad valorem fee based on total assets of the Company which exceed £200mn will be 0.04% on the Net Asset Value of the Company in excess of £200mn During the year, expenses incurred with JTC (UK) Limited for administrative and £92,978) being outstanding and payable at the year end. AIFM The AIFM, Gresham House Asset Management Limited (the Investment Manager), is entitled to receive a fee from the Company in respect of its services provided under the AIFM Agreement. Following the year end, the Company and the Manager agreed to a revised management fee arrangement to apply from 1 February 2025. 0.9% on the NAV of the Company in excess of £250mn and up to and including £500mn 0.8% on the NAV of the Company in excess of £500mn Under the new arrangements the management fee will based on an average of the closing daily market capitalisation during the period and the NAV at the beginning NAV of the Company 0.9% on the average of the market capitalisation and NAV of the Company in excess of £250mn and up to and including £500mn 0.8% on the average of the market capitalisation and NAV of the Company in excess of £500mn The AIFM also provides accounting and administration services to the underlying project companies and is entitled to an annual fee of £9,000 per project. During the year, expenses incurred with the AIFM for accounting and administration services amounted payable at the year end. The Investment Manager is a wholly owned subsidiary of Gresham House Limited, a 2.51%) of total issued Ordinary Shares, including direct and indirect holdings. Gresham House GRID Annual Report 2024 105 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 7. Net return on investments at fair value through the prot and loss 31 December 2024 (£) 31 December 2023 (£) Unrealised loss on investments at fair value through (117, 9 60, 534) (146,752,282) Interest on loans to subsidiaries 9,927,827 45,457,656 (108,032,707) (101,294,626) 8. Administrative and other expenses 31 December 2024 (£) 31 December 2023 (£) Administration and secretarial fees 364,149 403,910 Remuneration received by the Company’s Auditor for 393,633 322,252 Depositary fees 98,686 100,298 Directors’ remuneration – salary 335, 812 322,276 Directors’ remuneration – social security contributions and similar taxes 37,724 25,306 Investment Manager fee 6,199,823 7,509,803 Sundry expenses 544,710 443,904 7,974,537 9,127,749 * Included within the Auditor‘s remuneration for 2024 is an amount of £77,599 in relation to additional in relation to the audit of MidCo for FY2024 9. Taxation The Company is recognised as an Investment Trust Company (ITC) for the accounting For the year ended 31 December 2024, the Company may utilise group relief or make 31 December 2024 (£) 31 December 2023 (£) UK corporation tax – – Loss before tax (115, 891,611) (110,110, 90 0 ) (28,972,903) (25,876,062) Net loss on investments at fair value through the 29,490,134 34,486,786 Non-taxable income (1,291,689) – Non-deductible expenses 33,996 34,126 Subject to group relief/designated as interest distributions 740,462 (8,644,850) Tax charge for the year – – Gresham House GRID Annual Report 2024 106 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 10. Earnings per Ordinary Share 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 EPS are identical. Revenue Capital 31 December 2024 Total Shareholders (£) 2,204,909 (118,096,520) (115 , 8 91,611) Weighted average number of Ordinary Shares for the year 570,332,032 570,332,032 570,332,032 Prot per share (basic and diluted) – pence 0.39 (20.71) (20.32) Revenue Capital 31 December 2023 Total Shareholders (£) 36,786,494 (146,897,394) (110,110 ,9 0 0) Weighted average number of Ordinary Shares for the year 560,318,675 560,318,675 560,318,675 Prot per share (basic and diluted) – pence 6.57 (26.22) (19.65) 11. Investments in subsidiaries at fair value through prot or loss consolidate its subsidiaries but, rather, recognises them as investments at fair value support to the subsidiaries, except as a guarantor to the debt facility entered into by the MidCo, and there are no restrictions in place in passing monies up the structure. Immediate parent Place of business Registered oce Percentage ownership Gresham House Energy Storage Holdings Limited (MidCo) The Company The Scalpel, 18th Floor, 52 Lime Street, London, EC3M 7AF Gresham House Asset Management Limited, 5 New Street Square, London, England, EC4A 3TW 100% Refer to Note 17 for valuation disclosures relating to the investments in subsidiaries. The Directors evaluate the performance of the portfolio of energy storage investments through its subsidiary companies on a fair value basis. The income approach is used to value investments as it indicates value based on the sum of the economic income that a project, or group of projects, is anticipated to earn in the future. assess the fair value of the Company’s investments and have provided their opinion on the reasonableness of the valuation of the Company’s investment portfolio. Gresham House GRID Annual Report 2024 107 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Therefore, the investments in subsidiaries are measured at FVTPL under IFRS 9, as these 31 December 2024 (£) 31 December 2023 (£) Equity 610,020,974 114,20 0, 507 Loans – interest bearing 3,816,170 613,781,187 Loans – interest free 4,200,000 – Total equity and loans 618,037,144 727,981,694 Reconciliation 31 December 2024 (£) 31 December 2023 (£) Opening balance 727, 981,694 834,771,492 4,200,000 2,004,828 (613,781,000) – (6 ,111,8 43) (7,500,000) 9,927,827 45,457,656 613,781,000 – (117, 96 0,53 4) (146,752,282) Closing balance 618 ,037,144 727,981,694 The interest-bearing loan of £3,816,170 attracts an interest rate of 8% per annum from the date of advance. Interest compounds on 31 December of each year and the loan is unsecured. During the year, the intercompany loan was capitalised to equity as part of Unless otherwise agreed, the loan principal and any interest accrued on the loans shall be repayable on the earlier of (i) written demand from the Company, or (ii) 31 December 2030. Further analysis The Company owns 100% of the Ordinary Shares in Gresham House Energy Storage Holdings plc (the MidCo) which itself holds a number of 100% owned subsidiaries. The Percentage ownership Total investment 31 December 2024 31 December 2023 31 December 2024 (£) 31 December 2023 (£) Noriker Staunch Limited 100% 100% 9,991,463 14,424,512 HC ESS2 Limited 100% 100% 13,494,479 19,893,490 HC ESS3 Limited 100% 100% 15,206,290 17,16 0, 576 West Midlands Grid Storage Limited 100% 100% 1,467,353 3,428,295 Cleator Battery Storage Limited 100% 100% 5,169,624 10,597,554 Glassenbury Battery Storage Limited 100% 100% 29,208,602 46,761,803 HC ESS4 Limited 100% 100% 34,982,667 41,173,725 Bloxwich Energy Storage Limited 100% 100% 17,273,60 0 21,945 ,511 HC ESS6 Limited 100% 100% 33,041,897 40,552,676 HC ESS7 Limited 100% 100% 36,400,480 42,467,133 Tynemouth Energy Storage Limited 100% 100% 6,467,591 13 ,227,60 6 Gridreserve Limited 100% 100% 14,044,116 18,589,464 Nevendon Energy Storage Limited 100% 100% 10,731,805 10,133,433 South Shields Energy Storage Limited 100% 100% 13,540,097 29,953,750 Enderby Storage Limited 100% 100% 4 4,161,760 33,964,005 Gresham House GRID Annual Report 2024 108 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Percentage ownership Total investment 31 December 2024 31 December 2023 31 December 2024 (£) 31 December 2023 (£) West Didsbury Storage Limited 100% 100% 47,779,392 29,109,414 Penwortham Storage Limited 100% 100% 41,161,144 29,003,841 Grendon Storage Limited 100% 100% 47,174, 003 53,267,283 Melksham East Storage Limited and Melksham West Storage Limited 100% 100% 85,496,352 56,125,569 UK Battery Storage Limited 100% 100% 123,458 ,132 187,812,426 Stairfoot Generation Limited 100% 100% 23,976,915 29,328,616 GreenGridPower1 Limited 100% 100% 33,647,727 18,856,094 Gresham House Energy Storage Solutions Limited 100% 100% 2,075,295 10,565,915 Arbroath Limited 100% 100% 29, 367, 937 28,945,546 Roc Noir Limited 100% 100% 5,717,192 5,509,220 Coupar Limited 100% 100% 32,956,727 27,3 81,435 Total investments in subsidiaries 757,992,640 840,178, 8 92 Working capital in MidCo (139,955,496) (112,197,198) Total investment in MidCo 618 ,037,144 727,981,694 The place of business for all the investments is 5 New Street Square, London, England, EC4A 3TW. A summary of impact on the Company’s Statement of Financial Position if the MidCo was consolidated is included in Note 3. Working capital in MidCo 31 December 2024 (£) 31 December 2023 (£) Cash at bank 22,448,024 20,767,752 Trade and other receivables 123,139 381,450 Loan arrangement fees 2,907,959 5,702,146 Trade and other payables (14,582,564) (25,712,253) Facility loan (150,000,000) (110,000,000) Interest payable on facility loan (2,487,083) (1,968,783) Derivative asset/(liability) 1,635,029 (1, 367, 510) (139,955,496) (112,197,198) 12. Loans receivable During the year, £613,781,000 of the principal balance of the loan to the MidCo was repaid through the issuance of new shares. Subsequently, the Company made a £4,200,000 interest-free loan to the MidCo – see Note 11. 13. Cash and cash equivalents 31 December 2024 (£) 31 December 2023 (£) Cash at bank 94,550 10,00 8,138 Investment in liquidity funds 3,949,900 4,065,375 4,044,450 14,073,513 * The liquidity fund is a liquid, short-term instrument which can easily be converted into cash Gresham House GRID Annual Report 2024 109 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 14. Trade and other receivables 31 December 2024 (£) 31 December 2023 (£) Prepayments 61,241 77, 6 89 Accrued income 329,640 311,228 VAT receivable 386,292 136,393 777,173 525,310 15. Trade and other payables 31 December 2024 (£) 31 December 2023 (£) Administration and secretarial fees 72,762 92,978 Audit fee accrual 240,740 206,480 Other accruals 301,929 2,133,559 615,431 2,433,017 16. Categories of nancial instruments 31 December 2024 (£) 31 December 2023 (£) Financial assets Financial assets at amortised cost: Cash and cash equivalents 4,044,450 14,073,513 Trade and other receivables 329,640 311, 228 Fair value through prot or loss: Investment in subsidiaries 618,037,144 727, 981,694 Total nancial assets 622,411,234 742,366,435 Financial liabilities Financial liabilities at amortised cost: Trade and other payables (615,431) (2,433,017) Net nancial assets 621,795,803 739,933,418 * Excludes prepayments and VAT As at 31 December 2024, the Company had an outstanding charge with Santander UK plc in respect of its position as guarantor to MidCo’s debt facility, held against all the assets and undertakings of the Company. There are no liabilities recorded in respect of this position. cost except for the investment in subsidiaries which are measured at fair value. Gresham House GRID Annual Report 2024 110 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 17. Fair value measurement Valuation approach and methodology The Company, via the MidCo, used the income approach to value its underlying investments. The income approach 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 economic income. The income approach is the DCF approach and the method discounts Valuation process The Company, via the MidCo, held a portfolio of energy storage investments with a capacity of 845 megawatts (MW) (the “investments”) with a further 227MW in construction at 31 December 2024 and 694MW of longer-term pipeline. The wholly owned portfolio comprises 30 projects held in 27 special project vehicles. All of the investments are based in the UK. The Directors review and approve the valuations of these assets following appropriate challenge and examination. The current portfolio consists of non-market-traded investments, and valuations are analysed using forecasts from external parties, adjusted for contracted revenues from Capacity Market and tolling contracts, to determine the fair value of the Company’s investments and the For the year ended 31 December 2024 the revenue forecasts utilised are blended forecasts from two providers. As at 31 December 2024, the fair value of the portfolio of investments has been determined by the Investment Manager and reviewed by Grant Thornton UK LLP. in each project have been discounted to 31 December 2024, using discount rates assumptions and forecasts for revenues, operating costs, macro-level factors and an appropriate discount rate. When acquiring new investments, the Company’s valuation approach is based on the status of the projects. If projects are under construction but not expected to be completed within nine months the project will be held at cost. After this date, during construction and once certain key milestones which reduce risk are met, the project will be fair valued. However, a construction premium of 0.75% will be added to the discount rate. When the investment reaches Provisional Acceptance (PAC) a project will be fair valued with a reduced construction premium for 60 days as a proving period. After 60 days the project will be fair valued without a construction premium. Conditional acquisitions, where the price of an acquisition has been agreed but shares have not been transferred, result in the recognition of a derivative at fair value. No value is attributed to pipeline which is not under construction. The determination of the discount rate applicable to each individual investment project considers various factors, including, but not limited to, the stage reached by each project, the period of operation, the historical track record, the terms of the project agreements and the market conditions in which the project operates. The Investment Manager exercises its judgement in assessing the expected future models for each underlying project. The Investment Manager makes amendments a) discount rates (i) implied in the price at which comparable transactions have been announced or completed in the UK energy storage sector (if available); (ii) publicly disclosed by the Company’s peers in the UK energy storage sector (if available); and (iii) applicable for other comparable infrastructure asset classes and regulated energy sectors; b) changes in power market forecasts from leading market forecasters and the current revenue environment; c) changes in the economic, legal, taxation or regulatory environment, including changes in retail price index expectations; d) technical performance based on evidence derived from project performance to date; e) the terms of any power purchase agreement arrangements and/or tolling agreements; f) accounting policies; g) h) claims or other disputes or contractual uncertainties; and i) changes to revenue, cost, or other key assumptions (which may include an operating and capital expenditure assumptions and asset life. Gresham House GRID Annual Report 2024 111 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Valuation assumptions include consideration of climate-related matters such as expected levels of renewable energy entering the grid system, demand patterns and current regulatory policy. These are factored into the pricing assumptions which are prepared by independent consultants. In respect of the valuations at 31 December 2023 the Investment Manager made certain downward adjustments to the revenue the revenue curves received take into account the lower revenue environment. used in the valuation of the Company’s underlying portfolio and approves them based on the recommendation of the Investment Manager. 31 December 2024 31 December 2023 Key valuation input Range Weighted average Range Weighted average WACC/WADR 9.8% – 11.4% 10.7% 9.8% – 11.4% 10.9% RPI 2.5% 2.5% 2.6% – 2.7% 2.6% Another key assumption in the valuation models is the volatility of power prices. Due of revenue streams including arbitrage on power price volatility or Firm Frequency Response (FFR) and other similar income streams. Due to the nature of the assets owned by the investments, should one revenue stream be impacted the asset is able to switch to alternative sources of revenue to seek to maintain total revenue targets, as mentioned in the Investment Manager’s report. Sensitivity analysis movements of the Company’s investments, via the MidCo. The sensitivity analysis does not include an assessment of the fall in the power price as underlying power information is provided on a net revenue basis as the investment portfolio generates value through maximising on the volatility in the market, therefore adjusting revenue as a total is a more relevant measure. We have therefore provided a sensitivity based on percentage changes in revenue overall. Investment Project Valuation technique Signicant inputs description Sensitivity Estimated eect on fair value 31 December 2024 (£) Estimated eect on fair value 31 December 2023 (£) Noriker Staunch Limited Staunch DCF Discount rate +1% -1% (67 7, 5 0 9) 756,892 (989,754) 1,111, 6 9 0 Revenue +10% -10% 127,095 (127,112) 98,616 (99,187) HC ESS2 Limited Lockleaze, Littlebrook DCF Discount rate +1% -1% (976,327) 1,096,488 (1,384,337) 1,554,621 Revenue +10% -10% 2,040,784 (2,249,778) 2,151,930 (2,254,280) HC ESS3 Limited Roundponds DCF Discount rate +1% -1% (1,161,663) 1,333,815 (1,263,738) 1,445,053 Revenue +10% -10% 1,419,403 (1,441,585) 1,497,622 (1,534,323) West Midlands Grid Storage Two Limited Wolves DCF Discount rate +1% -1% (146,524) 166,150 (246,278) 276,236 Revenue +10% -10% 399,540 (399,923) 418,288 (4 57,701) Cleator Battery Storage Limited Cleator DCF Discount rate +1% -1% (312 ,116) 347, 978 (383,187) 427,916 Revenue +10% -10% 436,278 (4 37,204) 484,269 (485,793) Glassenbury Battery Storage Limited Glassenbury A and B DCF Discount rate +1% -1% (1,689,869) 1,890,633 (2,096,784) 2,349,623 Revenue +10% -10% 2,319,967 (2, 325,747) 2,608,642 (2,611, 329) HC ESS4 Limited Red Scar DCF Discount rate +1% -1% (3,049,230) 3,555,687 (3,378,646) 3,924,386 Revenue +10% -10% 3,972,613 (3,988,759) 4,463,582 (4,488,432) Bloxwich Energy Storage Limited Bloxwich DCF Discount rate +1% -1% (1,396,081) 1,580,041 (1,596,398) 1,792,901 Revenue +10% -10% 2,105,026 (2,494,163) 2,813 ,160 (2,883,980) HC ESS7 Limited Thurcroft DCF Discount rate +1% -1% (3,241,479) 3,778,607 (3,455,743) 4,000,692 Revenue +10% -10% 3,627,409 (3,633,332) 4,487,571 (4,507,638) HC ESS6 Limited Wickham DCF Discount rate +1% -1% (2,489,175) 2,828,238 (2,906,428) 3,294,299 Revenue +10% -10% 3,768,464 (3,799,937) 4,231,794 (4,273,310) Gresham House GRID Annual Report 2024 112 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Investment Project Valuation technique Signicant inputs description Sensitivity Estimated eect on fair value 31 December 2024 (£) Estimated eect on fair value 31 December 2023 (£) Tynemouth Battery Storage Limited Tynemouth DCF Discount rate +1% -1% (562,580) 655,857 (785,644) 910,977 Revenue +10% -10% 1,205,364 (1,223,872) 1,289,339 (1,295,822) Gridreserve Limited Byers Brae DCF Discount rate +1% -1% (1,082,788) 1,221,510 (1,266,615) 1,425,018 Revenue +10% -10% 1,548,968 (1, 557,910) 2,018,014 (2,023,244) Nevendon Energy Storage Limited Nevendon DCF Discount rate +1% -1% (696,618) 772,403 (777,887) 863,613 Revenue +10% -10% 1,013,581 (1,125,214) 1,123 , 819 (1,124,293) South Shields Energy Storage Limited South Shields DCF Discount rate +1% -1% (536,482) 575,951 (714,481) 768,923 Revenue +10% -10% 1,126,946 (1,128,843) 1,301,237 (1,301,461) Enderby Storage Limited Enderby DCF Discount rate +1% -1% (3,640,641) 4,171, 825 (3,713,689) 4,256,663 Revenue +10% -10% 4,581,705 (4,629,888) 4,991,172 (5,034,671) West Didsbury Storage Limited West Didsbury DCF Discount rate +1% -1% (3,623,541) 4,154,441 (3,509,794) 4,010,765 Revenue +10% -10% 3,948,311 (3,948,020) 4,587,518 (4,648,492) Penwortham Storage Limited Penwortham DCF Discount rate +1% -1% (3,209,097) 3,630,138 (3,069,697) 3,470,007 Revenue +10% -10% 3,485,973 (3,420,556) 4,295,182 (4,359,672) Melksham East Storage Limited and Melksham West Storage Limited Melksham DCF Discount rate +1% -1% (6,779,377) 7,75 4, 3 67 (6,893,088) 7,902,313 Revenue +10% -10% 8,585,144 (8,683,823) 9,073,680 (9,142,253) Arbroath Limited Arbroath DCF Discount rate +1% -1% (2, 537,155) 2,943,971 (2,640,359) 3,047,59 9 Revenue +10% -10% 2,593,530 (2,603,341) 3,217,043 (3,245,071) Grendon Storage Limited Grendon DCF Discount rate +1% -1% (3,779,055) 4,344,298 (4,134,740) 4,741, 8 02 Revenue +10% -10% 4,621,904 (4,629,766) 5,052,662 (5,096,692) Investment Project Valuation technique Signicant inputs description Sensitivity Estimated eect on fair value 31 December 2024 (£) Estimated eect on fair value 31 December 2023 (£) UK Battery Storage Limited Elland DCF Discount rate +1% -1% (3,026,521) 3,418,522 (3 ,128,791) 3,520,488 Revenue +10% -10% 3,547, 625 (3 , 571,134) 4,422,703 (4,471,803) UK Battery Storage Limited York DCF Discount rate +1% -1% (2,662,618) 3,011,685 (2,721,348) 3,063,902 Revenue +10% -10% 3,768,14 8 (3,797,850) 4,070,74 0 (4,116, 8 24) UK Battery Storage Limited Bradford West DCF Discount rate +1% -1% (4,853,276) 5,478,942 (5,359,658) 6,033,651 Revenue +10% -10% 5,843,580 (5,879,326) 7,702,758 (7,801,266) Stairfoot Generation Limited Stairfoot DCF Discount rate +1% -1% (2,021,854) 2,322,627 (2,211,726) 2,532,851 Revenue +10% -10% 2,296,992 (2,324,247) 2,974,098 (2,989,066) Greengridpower1 Limited Shilton Lane DCF Discount rate +1% -1% (2,782,011) 3,194,033 (3,003,628) 3,455,697 Revenue +1% -1% 2,913,181 (2,926,420) 3,730,729 (3,770,427) Coupar Limited Coupar Angus DCF Discount rate +1% -1% (2,557,068) 2,879,950 (2,733,868) 3,083,283 Revenue +10% -10% 2,932,432 (2,951,651) 3,752,746 (3,785,451) All other projects are held at cost. Portfolio sensitivity of RPI Sensitivity Estimated eect on fair value 31 December 2024 (£) Estimated eect on fair value 31 December 2023 (£) +0.25% –0.25% 20,336,539 (19,677,170 ) 19,038,472 (18,479,800) Gresham House GRID Annual Report 2024 113 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review The level in the fair value hierarchy within which the fair value measurement is of a particular input to the fair value measurement in its entirety requires judgement, 31 December 2024 Level 1 (£) Level 2 (£) Level 3 (£) Investment in subsidiaries – – 618 ,037,144 – – 618,037,144 31 December 2023 Level 1 (£) Level 2 (£) Level 3 (£) Investment in subsidiaries – – 727,981, 694 – – 727,981,694 Valuation of nancial instruments and the reconciliation in the movement of this Level 3 investment is presented in Note 11. No transfers between levels took place during the period. 18. Financial risk management The Company is exposed to certain risks through the ordinary course of business and risks. The management of risks is performed by the Directors of the Company and the Counterparty risk The Company is exposed to third-party credit risk in several instances and the possibility that counterparties with which the Company and its subsidiaries, together the Group, contracts may default by failing to pay for services received from the Company or its subsidiaries 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 plants, 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 locating of the assets, contractual counterparties who acquire services from the Company underpinning revenue generated by each project or the energy suppliers, demand aggregators, insurance companies who may provide coverage against various risks applicable to 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 unable to identify alternative counterparties, this may materially adversely impact the investment returns. Management has completed a high-level analysis which considers both historical and forward-looking qualitative and quantitative information, to assess the credit risk of these exposures and has determined that the credit risk as at 31 December 2024 is low 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 Investment Manager regularly assesses the creditworthiness of its counterparties where necessary, the sourcing of alternative arrangements in the event of changes in the creditworthiness of its present counterparties. Gresham House GRID Annual Report 2024 114 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Concentration risk The Company’s investment policy is limited to investments (via MidCo) in battery energy storage infrastructure, which will principally operate in the UK. This means that the result in greater volatility in the value of the Company’s investments, and consequently returns to shareholders. The Fund’s BESS projects generate revenues primarily from FFR, Asset Optimisation, Capacity Market (CM) and other grid connection-related revenues, including TRIADs and Dynamic Containment. Revenues from the portfolio’s BESS projects were historically skewed to FFR revenues, FFR being the provision to the National Grid of a dynamic response service to maintain the grid’s electrical frequency at 50Hz. Since the end of 2022 operations were increasingly targeted towards Asset Optimisation, revenue opportunities emerging for the portfolio as a series of regulatory changes are implemented. The Investment Manager is of the view that the UK’s exposure to renewable energy lessened despite the removal of legacy subsidies to onshore wind and solar. This is generation, have started to materialise following a weak trading environment for BESS in 2023 and H1 2024. Credit risk Cash and other assets that are required to be held in custody will be held at bank. Cash and other assets may not be treated as segregated assets and will therefore not be segregated from the bank’s own assets in the event of the insolvency of a custodian. Cash held with the bank will not be treated as client money subject to the rules of the FCA and may be used by the bank in the ordinary course of its own business. The Company will therefore be subject to the creditworthiness of the bank. In the event of the insolvency of the bank, the Company will rank as a general creditor in relation thereto and may not be able to recover such cash in full, or at all. The Investment Manager regularly assesses its credit exposure and considers the creditworthiness of its customers and counterparties. Cash and bank deposits are institutions with Moody’s credit ratings of A1 and Aaa-mf respectively. impairment requirements. For interest receivables on cash balances and loans receivable, the Company uses a 12-month expected loss allowance. The Company has completed some high-level analysis and forward-looking qualitative and quantitative information to determine if the interest and receivables are low credit risk. Based on this analysis the expected credit loss on interest and receivables is not material and therefore no impairment adjustments were accounted for. Liquidity risk The objective of liquidity management is to ensure that all commitments made by the Company which are required to be funded can be met out of readily available and secure sources of funding. As noted below, this includes debt funding. BESS projects have limited liquidity and may not be readily realisable or may only be realisable at a value less than their book value. There may be additional restrictions on divestment in the terms and conditions of any sale agreement in relation to a particular BESS project. In 2021, the Company assessed its ability to raise debt and the MidCo entered into a debt facility for £180mn, which was subsequently amended and restated in 2022 for a total of £335mn. During 2024, the facility has been resized and total commitments reduced by £140mn to £195mn. The Company is permitted to provide security to lenders in order to borrow money, which may be by way of mortgages, charges or other security interests or by way of outright transfer of title to the Company’s assets. The Company is a guarantor to the MidCo debt facility – should there be a default by the MidCo the Company may be liable to repay all debt drawn. The Directors will restrict borrowing to an amount not exceeding 50% of the Company’s NAV at the time of bank. As at year end the MidCo was in compliance with covenant requirements. obligations when they fall due. Gresham House GRID Annual Report 2024 115 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review As at 31 December 2024 < 1 year (£) 1 to 2 years (£) 2 to 5 years (£) > 5 years (£) Total (£) Financial assets Cash and cash equivalents (see Note 13) 4,044,450 – – – 4,044,450 Trade and other receivables (see Note 14) 329,640 – – – 329,640 Fair value through prot or loss: Investment in subsidiaries – – – 618 , 037,14 4 618,037,14 4 Total nancial assets 4,374,090 – – 618,037,144 622,411,234 Financial liabilities Financial liabilities at amortised cost Trade and other payables (see Note 15) 615,431 – – – 615,431 Total nancial liabilities 615,431 – – – 615,431 As at 31 December 2023 < 1 year (£) 1 to 2 years (£) 2 to 5 years (£) > 5 years (£) Total (£) Financial assets Cash and cash equivalents (see Note 13) 14,073,513 – – – 14,073,513 Trade and other receivables (see Note 14) 311,228 – – – 311, 228 Fair value through prot or loss: Investment in subsidiaries – – – 727,981, 694 727,981, 694 Total nancial assets 14,384,741 – – 727,981,694 742,366,435 Financial liabilities Financial liabilities at amortised cost Trade and other payables (see Note 15) 2,433,017 – – – 2,433,017 Total nancial liabilities 2,433,017 – – – 2,433,017 * Excludes prepayments and VAT Gresham House GRID Annual Report 2024 116 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Market risk 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 Price risk due to changes in market prices. At 31 December 2024, the valuation basis of the Company’s investments was valued at market value. This investment is driven by market factors and is therefore sensitive to movements in the market. The Company relies on market knowledge of the Investment Manager, the valuation expertise of the third-party valuer and the use of third-party market forecast information to provide comfort with Note 17 for trading revenue sensitivities. Interest rate risk to interest rate risk on its cash balances held with counterparties, bank deposits, loans receivable, advances to counterparties and through loans to subsidiaries. Loans to from the lender or 31 December 2030. The Company may be exposed to changes in variable market rates of interest and this could impact the discount rate and therefore the valuation of the projects. The borrowings entered into by MidCo are subject (SONIA) but the majority of these borrowings are also subject to hedging instruments Currency risk All transactions and investments during the current year were denominated in Pounds to time, incur expenditure in currencies other than Pounds Sterling. 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 and reserves. The Board continues to monitor the balance of the overall capital structure so as to maintain capital requirements. 19. Net Asset Value (NAV) per Ordinary Share Basic NAV per Ordinary Share is calculated by dividing the Company’s net assets as 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 Ordinary Share are identical. 31 December 2024 31 December 2023 622,243,336 74 0 ,147,500 Ordinary Shares in issue 569,064,139 573,444,694 NAV per Ordinary Share – basic and diluted (pence) 109.35 129.07 Gresham House GRID Annual Report 2024 117 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 20. Shareholders’ equity Ordinary Shares number Treasury shares (£) Share capital (£) Share premium (£) Merger relief reserve (£) Capital reduction reserve (£) Total (£) Allotted and issued share capital As at 31 December 2023 573,444,694 – 5,734,447 543,915,072 13,299,017 3,892,537 566,841,073 Issue of Ordinary Shares of £0.01 – – – – – – – 573,444,694 – 5,734,447 543,915,072 13,299,017 3,892,537 566,841,073 Cancellation of share premium reserve – – – (543,915,072) – – (543,915,072) Cancellation of merger relief reserve – – – – (13,299,017) – (13,299,017) Transfer to capital reduction reserve – – – – – 557,214,089 557,214,089 Issue of class B shares 569,064,139 – 13,299,017 – – – 13,299,017 Cancellation of class B shares* (569,064,139) – (13,299,017) – – – (13,299,017) Shares repurchased (4,380,555) (2,012,553) – – – – (2,012,553) As at 31 December 2024 569,064,139 (2,012,553) 5,734,447 – – 561,106,626 564,828,520 * During the year the Company cancelled the share premium reserve via a court process that concluded on 1 November 2024. As part of this process there was an issue and subsequent cancellation of class B Ordinary Shares to the existing holders of class A Ordinary Shares as a “bonus issue” ** During the year, the Company repurchased 4,380,555 Ordinary Shares for £2,012,553 which are held as treasury shares at the year end Ordinary Shares number Share capital (£) Share premium (£) Merger relief reserve (£) Capital reduction reserve (£) Total (£) Allotted and issued share capital As at 31 December 2022 541,290,353 5,412,904 495,230,993 13,299,017 3,892,537 517,835,451 Issue of Ordinary Shares of £0.01 32,154,341 321,543 49,678,457 – – 50,000,000 Share issue costs – – (994,378) – – (994,378) As at 31 December 2023 573,444,694 5,734,447 543,915,072 13,299,017 3,892,537 566,841,073 Share capital The Company’s capital is represented by the Ordinary Shares. Treasury shares as a reduction of equity at its cost price and are disclosed as a separate component in the statement of changes in equity. No gain or loss is recognised in the statement of comprehensive income on the purchase of the Company’s own equity instruments. Amounts to be received when treasury shares are sold or reissued will be recognised or from retained earnings. No dividends were received on treasury shares during the year. Treasury shares are treated as a deduction from the weighted average number of shares in issue. Share premium The surplus of net proceeds received from the issuance of new shares over their par value is credited to this account and the related issue costs are deducted from this account. The reserve is non-distributable. During the year the Board approved a resolution to cancel the share premium reserve and transfer the amount into the capital reduction reserve. Gresham House GRID Annual Report 2024 118 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Merger relief reserve The merger relief reserve relates to shares issued for shares to acquire investments. This reserve is not distributable. During the year the Board approved a resolution to cancel the merger relief reserve and transfer the amount into the capital reduction reserve. Capital reduction reserve Following a successful application to the High Court and lodgement of the Company’s statement of capital with the Registrar of Companies in a prior period, the Company premium and merger reserve account. This was completed on 13 February 2019 by a transfer of the balance of £97,009,475 from the share premium account to the capital reduction reserve. Following a successful application to the High Court and lodgement of the Company’s statement of capital with the Registrar of Companies during the year, the Company was permitted to cancel its share premium account and merger relief reserve. This was completed on 16 October 2024 by a transfer of the balance of £543,915,072 from the share premium account and £13,299,017 from the merger relief reserve to the capital reduction reserve. The capital reduction reserve is classed as a distributable reserve and dividends to be Share capital and share premium account and capital reduction reserve account On incorporation the Company issued 1 Ordinary Share of £0.01 which was fully paid up and 50,000 redeemable preference shares of £1 each which were paid to one quarter of the nominal value. These 50,000 redeemable preference shares were subsequently redeemed. Revenue reserve The revenue reserve represents a distributable reserve of cumulative net gains and losses recognised in the revenue account of the Statement of Comprehensive Income. Capital reserve The capital reserve represents a non-distributable reserve of cumulative net capital gains and losses recognised in the Statement of Comprehensive Income. Dividends For the year ended 31 December 2024 No dividends have been declared or paid for the period ended 31 December 2024. For the year ended 31 December 2023 Period in relation to which dividend was paid Announcement date Ex-dividend date Payment date Amount per Ordinary Share Total amount 1 January to 31 March 2023 5 May 2023 18 May 2023 8 June 2023 1.8375p £9,946,210 1 April to 30 June 2023 7 September 2023 14 September 2023 29 September 2023 1.8375p £10 , 5 37,0 4 6 1 July to 30 September 2023 17 November 2023 7 December 2023 21 December 2023 1.8375p £10 , 5 37,0 4 6 Ordinary shareholders are entitled to all dividends declared by the Company and, in a winding up, to all of 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. Gresham House GRID Annual Report 2024 119 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 21. Cash and non-cash ow items The non-cash movements for the year ended 31 December 2024 predominantly relate to repayment of the loan to the MidCo through the issuance of new shares and movement in the investments. These non-cash movements are reconciled and discussed in Note 11. 22. Transactions with related parties and other signicant contracts 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. Directors 31 December 2024 (£) 31 December 2023 (£) Directors’ remuneration 335,812 322,276 Employers’ NI 37,724 25,306 Total key management personnel 373,536 347,582 All Directors’ remuneration is short-term salary. The remuneration arrangements of Directors are disclosed in the Directors’ remuneration report on page 76. Dividends paid by the Company to the Directors are disclosed in the Directors’ remuneration report on pages 76 to 80. No dividend amounts were payable as at The aggregate fees of the Directors will not exceed £500,000 per annum. There are no performance conditions attaching to the remuneration of the Directors as the Board does not believe that this is appropriate for Non-Executive Directors. The Directors are Loans to related parties Loans receivable represent amounts due to the Company from its subsidiary and are disclosed in Note 11. 31 December 2024 (£) 31 December 2023 (£) Principal advanced 4,200,000 568,323,528 Interest accrued 3,816,170 45,457,656 Total loans 8,016,170 613,781,184 23. Capital commitments 24. Post balance sheet events The Company and the Manager have agreed to a revised management fee arrangement to apply from 1 February 2025. Thereafter, rather than being calculated solely based on the published NAV, the management fee will be based on an average of the closing daily market capitalisation and the NAV. There were no further events after the reporting date which require disclosure. Gresham House GRID Annual Report 2024 120 Notes to the Financial Statements Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review For the period from 1 January 2024 to 31 December 2024 1. Dividend per Ordinary Share Dividend per Ordinary Share is a measure to show the distributions made to shareholders during the year. Dividend period: 12 months to 31 December 2024 No dividends have been declared or paid for the year ended 31 December 2024. Dividend period: 12 months to 31 December 2023 Dividend paid per share (£) Number of shares on dividend payment date Total dividend paid (£) Q1 2023 (declared 5 May 2023) 0.018375 541,290,353 9,946,210 Q2 2023 (declared 7 September 2023) 0.018375 573,444,694 10, 537,046 Q3 2023 (declared 17 November 2023) 0.018375 573,444,694 10 , 537,0 46 0.0551 31,020,302 2. Ordinary Share price total return Ordinary Share price total return is a measure of the return that could have been 31 December 2024 pence 31 December 2023 pence Share price at end of the year 45.90 109.00 Dividends paid from inception to end of the year 31.02 31.02 Dividend reinvestment impact (17. 92) 0.08 (100.00) (100.00) Ordinary Share price total return since inception (41.00) 4 0.10 Ordinary Share price total return since inception % (41.0%) 40.1% 3. Net asset value (NAV) per Ordinary Share 31 December 2024 31 December 2023 NAV at end of the year £622,243,336 £740,147,50 0 Ordinary Shares in issue 569,064,139 573,444,694 NAV per share (pence) – Basic and diluted 109.35 129.07 Alternative Performance Measures Gresham House GRID Annual Report 2024 121 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 4. NAV per Ordinary Share total return for the period NAV per Ordinary Share total return is a measure of the success of the Investment Manager’s strategy to grow the NAV, showing how the NAV has changed over a period of time, considering both capital returns and dividends paid to shareholders. 31 December 2024 (pence) 31 December 2023 (pence) NAV per Ordinary Share at end of the year 109.35 129.07 Dividends paid from inception to end of the year 31.02 31.02 Dividend reinvestment impact 1.99 7.93 NAV per Ordinary Share at end of the year including dividend reinvestment 142.36 168.02 NAV per Ordinary Share at beginning of the year including dividend reinvestment (168.02) (192.87) NAV total return for the year (25.66) (24.85) NAV per Ordinary Share total return for the year (15.27%) (12.88%) Dividend reinvestment impact recalculated to compound the dividend reinvestment as at the date of payment, consistent with the Ordinary Share price total return calculation. 5. Gross asset value (GAV) GAV is a measure of the total value of the Company’s assets. 31 December 2024 (£’000) 31 December 2023 (£’000) Total assets reported in the Company at end of period 622,859 742,581 Debt held by intermediate holding company (A) 150,000 110,000 GAV (B) 772,859 852,581 Gearing as dened by the Company (A/B) 19% 13% 6. Ongoing charges gure (OCF) OCF measures the Company’s recurring fund management costs incurred during the year expressed as a percentage of the average of the net assets at the end of each quarter during the year. 31 December 2024 (£’000) 31 December 2023 (£’000) Fees to Investment Manager 6,200 7, 510 Legal and professional fees 771 880 Transaction fees 36 53 Administration fees 301 343 Directors’ remuneration 374 348 Audit fees 394 322 Other expenses 670 551 Total expenses 8,746 10,007 Non-recurring expenses not in OCF calculation (136) (145) Total ongoing expenses (A) 8,610 9,862 Average NAV for the year (B) 666,842 830,129 Ongoing charges for the year (A/B) 1.29% 1.19% Gresham House GRID Annual Report 2024 122 Alternative Performance Measures Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 7. Operational Dividend Cover Operational Dividend Cover is a measure to demonstrate the Company’s ability to pay dividends from the earnings of its underlying investments after accounting for external interest costs, facility commitment fees and administrative costs of the Company but excluding historic transaction costs and historic debt arrangement fees. 31 December 2024 (£’000) 31 December 2023 (£’000) EBITDA of underlying group companies (unaudited) 29,071 25,796 Ongoing costs in the Company (8,610) (9,862) Net earnings before interest 20,461 15,934 Bank interest received in the Company and the MidCo 1,069 1,086 Interest income on construction capital deployed to non-owned SPVs – 64 Facility commitment fees (1,312) (2,428) External interest costs in the MidCo (8,349) (6,908) Net earnings for dividend cover calculation (A) 11,869 7,748 Interest income on construction capital deployed to owned SPVs 15,600 17, 612 Net earnings for dividend cover as previously calculated 27,469 25,360 Dividends declared by the Company in respect of the period (B) – 31,020 Dividend cover (A/B) n/a 0.25x 8. Dividend yield Dividend yield is a measure to show the dividend return received by shareholders for the year. 31 December 2024 31 December 2023 Dividend per share declared in respect of the period (pence) – 5.51 Share price at end of period (pence) 45.90 109.00 Dividend yield for the period 0.0% 5.1% 9. Operational capacity of the portfolio Operational capacity of the portfolio is a measure to show the revenue-generating capacity of the underlying investments. 31 December 2024 31 December 2023 Operational capacity (MW) 845 690 Operational capacity (MWh) 1,207 788 Gresham House GRID Annual Report 2024 123 Alternative Performance Measures Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review 10. Aggregated nancial information of the Company and its portfolio. 31 December 2024 (£’000) 31 December 2023 (£’000) Net operating revenue in SPVs (unaudited) 46,522 38,717 Operating SPV administrative and other costs (unaudited) (17, 343) (12,879) Ongoing administrative and other costs in the MidCo (108) (42) Portfolio operational earnings before interest, depreciation and amortisation 29,071 25,796 Company administrative and other expenses (8,610) (9,862) Bank interest income 1,069 1,086 Facility interest expense and commitment fees (9,661) (9,336) Other interest 192 (77) Non-recurring transaction, FX and similar costs (767) (1,445) Non-operational SPV administrative and other costs (unaudited) (243) (354) Depreciation and amortisation (unaudited) (40,062) (29,134) Net aggregated earnings (29,011) (23,326) Gresham House GRID Annual Report 2024 124 Alternative Performance Measures Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Other information Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Administrator and Secretary JTC (UK) Limited The Scalpel 18th Floor 52 Lime Street London EC3M 7AF Registrar and Receiving Agent Computershare Investor Services plc The Pavilions Bridgewater Road Bristol BS13 8AE Legal Adviser Eversheds LLP 1 Wood Street London EC2V 7WS Depositary INDOS Financial Limited 54 Fenchurch Street London EC3M 3JY Investment Valuer Grant Thornton LLP 30 Finsbury Square London EC2A 1AG Ticker GRID Corporate Brokers and Financial Adviser 100 Bishopsgate London EC2N 4JL Peel Hunt LLP 100 Liverpool Street London EC2M 2AT Tax Adviser Blick Rothenberg Chartered Accountants 16 Great Queen Street London EC4V 6BW Independent Auditor BDO LLP 55 Baker Street London W1U 7EU Non-Executive Directors John Leggate – Chair Isabel Liu Duncan Neale Catherine Pitt David Stevenson Registered oce The Scalpel 18th Floor 52 Lime Street London EC3M 7AF Investment Manager and AIFM Gresham House Asset Management Limited 5 New Street Square London EC4A 3TW Company information Gresham House GRID Annual Report 2024 126 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Balancing services National Grid procure services to balance demand and supply and to ensure the security and quality of electricity supply across Britain’s transmission Black start Demand side response Dynamic Containment (DC) Enhanced Frequency Response (EFR) Firm Frequency Response (FFR) Optional Downward Flexibility Management (ODFM) Short-Term Operating Reserve (STOR) www.nationalgrideso.com/ balancing-services Capacity Market (CM) The income received by generators to ensure generation capacity is available to meet shortfalls. Combined Cycle Gas Turbine (CCGT) Energy generation technology that turbine. The design uses a gas turbine to create electricity and then captures the resulting waste heat to create steam, which in turn drives a steam turbine. Curtailment Large wind farms are connected to the UK’s high-voltage network and National Grid balances electricity supply and demand. As demand rises and falls during the day, electricity supply mirrors these peaks and troughs. from electricity generators to increase or decrease electricity generation as and when required. As such, it may mean that there are times when generators are paid to curtail their output (constraint payments). www.nationalgrideso.com/news/ grounds-constraint Dividend yield The annual dividends expressed as a percentage of the current share price. EBITDA of underlying group companies EBITDA includes earnings before interest, tax, depreciation and amortisation and includes liquidated damages earned by SPVs. Earnings are calculated on an accruals basis and therefore only SPVs which were owned in the accounting period have their earnings included here. Transactions completing after the period will have locked box income recognised once the transaction is completed. This is important to measure the underlying performance of the investments and ensure cash earnings are available to payment of costs in the Company and dividends to shareholders. Engineering, Procurement and Construction (EPC) contract This relates to a “turnkey” construction project where the EPC contractor takes full responsibility for the delivery of a project. Engineering, Procurement and Construction Management (EPCM) contract This is a type of professional engineering services contract where the EPCM contractor is responsible only for the management of the construction project. Asset Optimisation (Trading) Asset Optimisation involves buying and selling electricity in order to capture a spread between the high and low electricity prices on any given day. This can be done via one or more market mechanisms, hence the expression “Asset Optimisation” and includes trading in the to National Grid via the BM. AUM assets of the Company. Balancing Mechanism (BM) A tool used by the ESO to balance the electricity supply and demand close to real time. The BM is used to balance supply and demand in each half hour trading period of every day. Where the ESO predicts that there will be a discrepancy between the amount of electricity produced and the level of demand during a certain period, they may or decrease generation (or even increase consumption in the case of storage assets). Sites must be registered in the BM to receive such actions but once registered they are able to set their own prices for being used. Glossary Gresham House GRID Annual Report 2024 127 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Net Asset Value (NAV) per Ordinary Share The total net assets in the Company divided by the total number of Ordinary Shares in issue. This is an important measure to understand the capital return to shareholders. Ongoing Charges Figure (OCF) The Ongoing Charges Figure includes all charges and costs incurred by the Company which relate to the ongoing operation of the Company. This includes management fees, administration fees, audit fees, Directors’ remuneration, depositary services costs and other similar costs. It excludes capital costs and costs of raising new capital. The Ongoing Charges are then divided by the weighted average NAV and annualised. National Energy System Operator (NESO) Refers to National Energy System Operator Limited, which has taken over the electricity system operation from National Grid Electricity System Operator Limited. The NESO is responsible for ensuring Great Britain has the essential energy it needs so that supply meets demand on the electricity system every second of every day. www.neso.energy NAV Total Return A measure showing how the NAV per share has performed over a period of time, considering both capital returns and dividends paid to shareholders. NAV Total Return is shown as a percentage change from the start of the period. It assumes that dividends paid to shareholders are reinvested at NAV at the time the shares are quoted ex-dividend. NAV Total Return shows performance discounts and premiums (share prices). levels of dividends. Liquidated damages (LD) Liquidated damages are presented in certain legal contracts as an estimate of losses to one of the parties. It is a provision that allows for the payment of a in breach of contract. Liquidated damages are meant as a fair representation of losses in situations where actual damages Liquidated damages are often included circumstances where a party faces a loss from an asset. The Company typically uses these in EPC arrangements to protect earnings from an asset in the result of delays to construction but are also common in other contracts such as for O&M arrangements. Market capitalisation Market capitalisation is the total value of the publicly traded outstanding shares, calculated by multiplying the current share price by the number of outstanding shares. Frequency Response services (FR) A subset of Balancing Services which relates to services performed by batteries to manage the frequency on the electricity system. This includes the Dynamic Containment (DC) Dynamic Moderation (DM) Dynamic Regulation (DR) Enhanced Frequency Response (EFR) Firm Frequency Response (FFR) Optional Downward Flexibility Management (ODFM) Gross Asset Value (GAV) Gross Asset Value is the total value of the investments and cash under the management of the Company including debt held by the MidCo. UK adopted International Accounting Standards (IFRS UK) UK adopted International Accounting Standards are accounting standards issued by the International Financial Reporting Standards UK Board (IASB) as adopted by the UK and have been applied by the Company in the preparation of the Gresham House GRID Annual Report 2024 128 Glossary Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review TRIADs of highest demand on the Great Britain electricity transmission system between November and February each year; the TRIADs are part of a charge-setting demand at three points during the winter in order to minimise energy consumption. However, TRIADs must be at least ten days apart. This is to avoid all three potentially falling in consecutive hours on the same day, for example during a particularly cold spell of weather. www.nationalgrideso.com/news/triads- why-three-magic-number Symmetrical A symmetrical grid connection is where the import and export capacities are the same. System inertia Inertia works to keep the electricity system running at the right frequency by using the kinetic energy in spinning parts in power plant generator turbines. When needed, the spinning parts in generator turbines can rotate slightly faster or slower to help balance out supply and demand. The more turbines there are, the more energy there is in the system and the greater the system inertia, which helps to stabilise the frequency. www.nationalgrideso.com/information- about-great-britains-energy-system- and-electricity-system-operator-eso/ technical-terms-explained Tolling A tolling agreement allows the toller to take operational control of the batteries and operate them, within the technical constraints of the BESS, in return for a Share price total return shows movements in discounts and premiums. levels of dividends. Proving period A period of 30 days after a project has achieved PAC. During this time, the project is fair valued subject to a premium added to the base discount rates of 50 bps to capture risk during the commissioning of the project. After this period, the project is fair valued without any additional premium. Seed assets The assets acquired at IPO known as and Roundponds. Skip rates when an action is taken by the control room even though there is a cheaper alternative to achieving the same outcome – so the cheaper action is “skipped”. Site uptime Calculation for the average level of availability in the portfolio or for an asset in Frequency Response services. This is calculated by taking the average MWs available in each period as a percentage of total capacity contracted. Operational Dividend Cover Operational Dividend Cover for the purpose of this report refers to a calculation for the ratio between net earnings of the underlying investment portfolio in the review period and dividends paid in respect of the same review period. This measure aims to add clarity on the Company’s ability to pay dividends from the earnings and cash generation of its underlying investments after deducting Company costs. This measure includes the EBITDA of underlying group companies less Company and holding company costs (excluding capital-related costs and debt arrangement fees but including external interest expense) and interest income on construction capital deployed to SPVs. Ordinary Share Share in the Company with a nominal value of 1p. Ordinary Share price total return A measure showing how the share price has performed over a period of time, considering both capital returns and dividends paid to shareholders. Share price total return is shown as a percentage change from the start of the period. It assumes that dividends paid to shareholders are reinvested in the shares at the time the shares are quoted ex-dividend. Gresham House GRID Annual Report 2024 129 Glossary Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Sustainable Finance Disclosure Regulation (SFDR) Under the EU SFDR, the Company is required to provide periodic disclosure as referenced in Article 8 of Regulation (EU) 2019/2088. The following section provides required disclosures as per Annex IV. Product name: Gresham House Energy Storage Fund plc Legal entity identier: 213800MSJXKH25C23D82 Environmental and/or social characteristics Sustainable investment means an investment in an economic activity that contributes to an environmental or social objective, provided that the investment does any environmental or social objective and that the investee companies follow good governance practices. Does this nancial product have a sustainable investment objective? l l Yes l l No sustainable investments with an environmental objective: % qualify as environmentally sustainable under the EU Taxonomy that do not qualify as environmentally sustainable under the EU Taxonomy sustainable investments with a social objective: % 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 objective in economic activities that qualify as environmentally sustainable under the objective in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy with a characteristics, but did not make any sustainable investments The EU Taxonomy is a down in Regulation (EU) 2020/852, establishing a list of environmentally sustainable economic activities. That Regulation does not lay down a list of socially sustainable economic activities. Sustainable investments with an environmental objective might be aligned with the Taxonomy or not. l To what extent were the environmental and/or social characteristics promoted by this nancial product met? The environmental characteristic promoted by the Gresham House Energy Storage Fund plc (the “Company”) is its commitment to investing in and increasing Battery Energy Storage System (BESS) capacity to support systems. BESS play an essential role in supporting the decarbonisation of energy systems and consequently the broader economy. In this way, the Company aims to contribute positively to climate change mitigation and net zero strategies. The Company retains its commitment to invest in and increase BESS capacity to support the decarbonisation of energy systems. In the last reporting year, the Fund invested £59mn into BESS assets and successfully completed the development of 155MW of new operational capacity. The increased adoption of BESS contributes, through enabling increased penetration of renewables, to the decarbonisation of the UK energy system where the Company has historically focused its investment activity. Sustainability indicators measure how the environmental or social characteristics product are attained. l How did the sustainability indicators perform? The Manager uses the following sustainability indicators to assess the adherence of the Company to the Total operational battery energy storage capacity (megawatts (MW) and megawatt hours (MWh)) Total battery energy storage capacity under construction (megawatts (MW) and megawatt hours (MWh)) Gresham House GRID Annual Report 2024 130 Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review the Company intended to measure, monitor and report on carbon emissions avoided (tCOe) as a result of the operation of BESS and increase in BESS capacity. The Manager has determined an interim methodology to estimate the carbon emissions avoided through the increased adoption of BESS in energy systems. This is reported below for 2024. The table below shows the performance of the Company against its sustainability indicators for 2024 and 2023. The indicators show an increase in the total operational battery energy storage capacity and an increase in capacity under construction. This demonstrates that the Company is continuing to contribute to supporting the decarbonisation of energy systems. Indicator 2024 2023 Total operational BESS capacity (MW) 845 690 Total operational BESS capacity (MWh) 1,207 788 Total BESS capacity under construction (MW) 227 382 Total BESS capacity under construction (MWh) 454 879 Total carbon emissions avoided from operations (tCO) 596,764 677,775 The EU Taxonomy sets out a “do no signicant harm” principle by which Taxonomy-aligned investments should not signicantly harm EU Taxonomy objectives and is accompanied by specic EU criteria. account the EU criteria for environmentally sustainable economic activities. The investments underlying the account the EU criteria for environmentally sustainable economic activities. Any other sustainable investments must also not signicantly harm any environmental or social objectives. The list includes the investments constituting the greatest proportion of investments of the the reference period 1 January to 31 December 2024 l What were the top investments of this nancial product? Largest investments Sector % of portfolio by value at 31December 2024 Country Melksham BESS 11.3% United Kingdom West Bradford BESS 6.58% United Kingdom West Didsbury BESS 6.30% United Kingdom Grendon BESS 6.22% United Kingdom Enderby BESS 5.83% United Kingdom Penwortham BESS 5.43% United Kingdom Thurcroft BESS 4.80% United Kingdom Elland BESS 4.66% United Kingdom York BESS 4.64% United Kingdom Red Scar BESS 4.62% United Kingdom * West Bradford, Elland and York are held under one SPV (UK Battery Storage Ltd) Gresham House GRID Annual Report 2024 131 Sustainable Finance Disclosure Regulation (SFDR) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Asset allocation describes the share of investments in l What was the proportion of sustainability- related investments? l What was the asset allocation? All assets invested in by the Company were battery energy storage system assets. c.98% of the Company’s investments, based on connection capacity (MWs), are aligned with the environmental and/or social characteristics of the Company. The sustainable investments. Investments #1 Aligned with E/S characteristics – 98% #2 Other – 2% #1 Aligned with E/S characteristics includes the environmental or social characteristics promoted by the #2 Other includes the remaining investments of the sustainable investments. l In which economic sectors were the investments made? All assets invested in by the Company (100%) were in the were into battery energy storage system assets. Taxonomy-aligned activities are turnover the “greenness” of investee companies today. capital expenditure (“capex”) shows the green investments made by investee companies, relevant for a transition to a green economy. operational expenditure (“opex”) operational activities of investee companies. l To what extent were the sustainable investments with an environmental objective aligned with the EU Taxonomy? l Did the nancial product invest in fossil gas and/or nuclear energy related activities complying with the EU Taxonomy? * Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they contribute to limiting climate change 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 Gresham House GRID Annual Report 2024 132 Sustainable Finance Disclosure Regulation (SFDR) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review Sustainable investments with an environmental objective that do not take into account the criteria for environmentally sustainable economic activities under Regulation (EU) 2020/852. l What investments were included under “other”, what was their purpose and were there any minimum environmental or social safeguards? “Other” category investments include a legacy asset that uses mostly gas engine technology to provide power to the grid although it does have a small amount of BESS (used as primary energy source before gas takes over) and a small amount of diesel generator capacity across three sites (primarily used as back up for Capacity Market Obligations) which was disposed in Q4 2024. The Company no longer makes, and is not able to make under its investment policy, new investments in assets using fossil fuels. l What actions have been taken to meet the environmental and/or social characteristics during the reference period? As discussed above, the Company continued to invest in and build out BESS capacity during the period. In addition, the Manager worked to improve carbon emissions data measurement and quality, and to develop a methodology to estimate carbon emissions avoided through the Company’s BESS assets. The Manager continues to work to gather more carbon- related data at construction stage and across the lifecycle of BESS components to understand the lifecycle carbon emissions impact. In addition, the Manager continues to engage with relevant government and industry stakeholders to drive forward initiatives to support the decarbonisation of energy systems and understanding of the mechanisms required to support greater renewables penetration in the future. A key example of this has been the Manager taking part in the Review of Electricity Market Arrangements (REMA) consultation through 2022 and ongoing through meetings with BEIS and the ESO. As a result of this consultation the Manager has combined with other energy market leaders to form part of an industry study into the possible impact and design of a wholesale market using locational pricing. 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 graph shows the Taxonomy alignment in relation to all the bonds, while the second graph shows the Taxonomy product other than sovereign bonds. 1. Taxonomy-alignment of investments including sovereign bonds 2. Taxonomy-alignment of investments excluding sovereign bonds Tu rnover Capex Opex Ta xonomy-aligned (no gas and nuclear) Non-Taxonomy-aligned 0% 50% 100% Tu rnover Capex Opex Ta xonomy-aligned (no gas and nuclear) Non-Taxonomy-aligned 0% 50% 100% * For the purpose of these graphs, “sovereign bonds” consist of all sovereign exposures 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. l What was the share of investments made in transitional and enabling activities? The Company did not make any Taxonomy-aligned investments, including investments in transitional and enabling activities. The share was therefore 0%. l What was the share of sustainable investments with an environmental objective not aligned with the EU Taxonomy? The Company did not make any sustainable investments, including sustainable investments with an environmental objective not aligned with the EU Taxonomy. The share was therefore 0%. Gresham House GRID Annual Report 2024 133 Sustainable Finance Disclosure Regulation (SFDR) Overv iew Portfolio Sustainability Accounts Other information Governance Market and nancial review
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