Gresham House starts construction on three UK BESS sites after £141m financing round
UK storage fund converts pipeline to shovels as 397 MW of new capacity begins buildout, signalling a shift from consent chasing to delivery.
Gresham House Energy Storage Fund has secured £141m in project financing and broken ground on three battery energy storage systems totalling 397 MW/794 MWh, marking the London-listed fund's largest single construction tranche to date.3
The move signals a shift in the UK storage market away from consent-hunting towards delivery. GRID has been criticised by some investors for a slow buildout pipeline relative to its portfolio ambitions, and this financing round directly addresses that gap by funding construction across multiple sites simultaneously rather than staggered single-asset starts.3
Alongside the construction start, GRID has conditionally acquired a 480 MW BESS project near Rayleigh in Essex. That acquisition would nearly double the fund's under-construction capacity if completed, and it points to a growing appetite among listed storage vehicles for larger, shovel-ready assets over speculative greenfield development.3
The timing is notable given the broader market backdrop. Australia commissioned 2 GW of large-scale battery capacity in 2025, a 233% year-on-year increase, and the US posted its best first quarter for grid-scale battery installations on record in Q1 2026, driven largely by data center demand.3,1
UK storage economics have tightened as merchant revenue stacks have come under pressure from falling balancing mechanism prices and increased competition in the ancillary services market. Yet GRID's decision to commit £141m suggests the fund sees sufficient long-term value in the capacity market and wholesale arbitrage to justify the capital outlay now.3
The UK market has also seen fresh entry at the development stage. NextEnergy-owned Starlight Energy secured planning consent in July (2026-07-14) for a 240 MW/960 MWh battery at Thorpe Thewles near Stockton-on-Tees, its largest UK project to date, adding to a pipeline that now stretches well beyond the established listed funds.6
Longer-duration storage is gaining ground too. RWE received sign-off in May (2026-05-27) to operate Australia's first eight-hour battery system at full capacity, the 50 MW/400 MWh Limondale unit in New South Wales, and Hydrostor has announced a 500 MW/4,000 MWh compressed air project across two sites in Ontario.4,3
Technology diversity is widening beyond lithium-ion. Invinity Energy Systems has been selected to design a vanadium flow battery of up to 1.5 GWh for a technology campus in Laufenburg, Switzerland, while Antora Energy has commissioned a 5 GWh multi-day thermal battery at a bioprocessing facility in South Dakota.3
But the economics of these alternatives remain unproven at scale. Flow batteries and compressed air carry higher upfront capital costs and longer construction timelines than lithium-ion, and merchant revenue uncertainty cuts deeper when assets take three-plus years to reach COD.3
In the US, the policy picture is mixed. GridStor acquired Accelergen's 199 MW/796 MWh Birdseye project in Adams County, Colorado, in May, but the industry continues to navigate federal headwinds on tariffs and IRA incentives that have clouded the cost outlook for domestic cell supply.2
California is attempting to build a domestic manufacturing base. A pioneering battery factory in the state won $10.5m in tax credits from the California Competes program, tied to hiring milestones, and its leadership has partnered with GM to co-develop onshore cell production.5
What bears watching is whether GRID's construction tranche converts into revenue-generating assets on schedule. Storage funds that have struggled with commissioning delays face pressure on NAVs and distribution cover, and the Rayleigh acquisition adds integration risk alongside growth. A slip in the expected COD dates for any of the three sites would test investor patience that is already thin after several years of compressed merchant spreads.3