Flexible generation and storage, financed privately.
What this asset class is, how opportunities of this kind are usually structured, and what you should expect to be able to assess before committing to anything.
No specific investment is offered on this website. Specific terms are provided by the sponsor directly, after your investor status has been confirmed.
The asset class
Flexible power generation and battery storage sites are built to respond to the grid. They run when demand is high or renewable output is low, and they sit idle the rest of the time. Modern sites combine fast-start reciprocating engines with battery capacity, and increasingly are specified so that they can be converted to run on hydrogen as the fuel supply chain develops.
Revenue typically comes from three sources: Capacity Market agreements, which pay for availability; wholesale power sales during high-price periods; and balancing and ancillary services. The mix varies by site and by how the operator chooses to dispatch the asset.
How these opportunities are usually structured
Development projects of this kind are usually financed through a special purpose company that owns the single site. Private investors participate through instruments issued by that company, with the money used to fund construction and commissioning.
Because the vehicle owns one asset, the investment stands or falls on that asset. There is no diversification within the structure. Security arrangements are common but vary considerably in strength, and a charge is not the same thing as a guarantee of recovery.
Specific terms, structure, security, documentation and financial information are provided to you by the sponsor directly, after your investor status has been confirmed. We do not provide them, and we are not able to discuss them before that point.
What you should expect to be able to assess
Before committing to anything, you should expect the sponsor to give you, and you should expect to understand:
- Audited accounts for the issuing company and its parent, and the group structure
- The full information memorandum and the executed loan or subscription documentation
- What the security actually is, who holds it, what it ranks behind, and what it would realistically realise in a downside
- Grid connection status — is the connection agreement signed, and what are the dates
- Planning consent status and any conditions outstanding
- The Capacity Market position: which auction, which delivery year, what the obligations and penalties are, and what happens if the agreement is terminated
- Construction contracts, the contractor’s covenant, and who carries cost-overrun and delay risk
- The revenue model and its assumptions, including the power price curve used
- What happens if the project is late, over budget, or fails to reach commercial operation
- Whether the developer has previously repaid investors of this type, on time and in full
If a sponsor is unwilling to provide any of this, that is information in itself.
The risks
- Total loss of capital. You may lose everything you invest. This is a realistic outcome, not a formality.
- No FSCS protection. The Financial Services Compensation Scheme does not cover these investments. If the issuer fails, there is no compensation scheme.
- No Ombudsman access. You are unlikely to have recourse to the Financial Ombudsman Service.
- Illiquidity. There is no secondary market. You should assume you cannot sell, transfer, or exit early, and that you will not get your money back before the end of the term — if at all.
- Concentration. A single asset, a single site, a single counterparty. There is no diversification.
- Construction and commissioning risk. Delay, cost overrun, contractor failure, equipment supply problems, or failure to reach commercial operation.
- Grid connection risk. Connection dates can move. UK connection queues are long and reform is ongoing.
- Merchant power price risk. Wholesale prices are volatile. Revenue forecasts are forecasts.
- Capacity Market risk. Agreements are won at auction and carry delivery obligations. They can be terminated and penalties applied. Availability payments are not the same as guaranteed revenue.
- Technology and conversion risk. “Hydrogen-ready” describes a specification, not a fuel supply. Conversion depends on infrastructure that does not yet exist at scale.
- Security risk. A charge may rank behind other creditors and may realise far less than the sums owed.
- No income until maturity. Returns of this type are commonly paid at the end of the term, meaning you receive nothing in the interim and your exposure runs the full period.
- Currency risk. If you invest in a currency other than sterling, exchange rate movements may reduce your return or your capital.
- Tax. Treatment depends on your individual circumstances and may change. No tax is withheld at source; you are responsible for your own tax position. We do not provide tax advice.
- Dilution and subordination. Later financing may rank ahead of your position.