Gresham House Energy Storage (GRID ) has overcome the damaging first-quarter slump and expects to post an increase in operating revenues for 2024.

In a trading update, the energy trading company said full-year portfolio revenues should exceed last year’s £38.7m due to improving market conditions, support for battery storage from the new Labour government and the tolling arrangement announced in June with Octopus Energy.

Following a 12.8% drop in first-half revenues to £17.9m, second-half revenues have recovered with £15.9m in the first four months to 31 October to give GRID a 10-month total of £33.8m.

Given the improving trends in recent months, the company is confident of outperforming last year.

Fund manager Ben Guest said the government’s Clean Power 2030 agenda had brightened the outlook for UK battery energy storage systems (BESS) by reversing the previous ‘inexplicable recommendation’ to exclude lithium-ion batteries from the ‘cap and floor’ revenue support scheme for energy storage developers.

Guest said Labour’s decarbonisation timetable was ‘moving the focus to immediately deployable technologies and hence onto the benefits BESS can offer the whole system today.’

The update comes ahead of a capital markets day on 27 November when GRID hopes to win back investor confidence after a painful year that has seen the dividend scrapped and the share drop 56%. In early trading, the stock firmed 0.5p to 48.1p, less than half the 100p level at which it launched six years ago.

Last week, the fund announced that it had energised one battery and increased the duration of two more projects, lifting total portfolio capacity to 845 megawatts. It added that almost half the contracted amount had been onboarded to Octopus Energy in line with the £43m tolling agreement struck over the summer. Part of the capacity is under fixed-price contracts above current GB revenues.

Panmure Liberum’s Shonil Chande noted that new government initiatives, such as GB Energy and the National Wealth Fund, would help to boost battery revenues in the longer term, a point made by Octopus Renewables Infrastructure (ORIT ) in its capital markets day in the City last week. 

Chande said that while it was very much in the early stages, GB Energy could prioritise investments in long-duration energy storage and other novel technologies that would help squeeze more gas off the system.

‘Finally, electricity demand is not expected to increase much by 2030, but a significant jump in demand is anticipated by 2050. Growth in the electrification of industry and electric vehicles were identified as key drivers of this future demand increase,’ he said.