JEFF PRESTRIDGE: Energy storage trusts that could help you generate a profit

It is National Grid’s responsibility to ensure that households always have access to electricity to light and heat their homes. It’s a mammoth task that becomes increasingly difficult, especially in times of high demand, when cold snaps bite and with Russia’s continued disruptive influence on the energy market.

At the beginning of this year, several energy suppliers encouraged customers to join a National Grid initiative, where they were paid for reducing their consumption at certain times. The idea was to ward off the threat of blackouts.

It appears the scheme – the jazzy-named Demand Flexibility Service – was an overall success and will become a regular feature, although some participants complained irritably that the cash rewards could be counted in pence rather than pounds.

But, crucially, this service is not the solution to keeping the country’s lights burning.

Much more important is building a network of storage facilities that would allow National Grid to effectively control the amount of electricity in the system at any given time. The units replenish supply during high demand and store it when demand is less.

These storage units – not particularly aesthetically pleasing and at their crudest resembling shipping containers dumped in the middle of a field – have grown in importance with the movement (both in the UK and globally) towards renewable energy such as solar and wind.

Where the supply of nuclear energy and that of energy from coal-fired power stations is reliable, renewable energy is not. When the sun doesn’t shine and the wind dies down, solar panels and gigantic wind turbines generate little energy.

Likewise, when the sun is burning brightly and the wind is blowing like a storm, they over-deliver. Storage facilities put an end to this supply inconsistency, supplying electricity to the National Grid when it is needed and hiding it for another day when it is not.

Major energy storage players in the UK include Highview Power. A few days ago, research from consultancy Stonehaven published that over a four-month period (October to January this year), enough wind energy was wasted to power 1.2 million homes. the weather is inclement or the sun is shining.

Rupert Pearce, chief executive, said: ‘Renewable energy storage is essential for a cleaner, cheaper, always available Britain.

“By capturing and storing excess renewable energy – which is now the cheapest, safest and most common form of fuel in the UK – we can supply UK homes and businesses with renewable green energy, removing millions of tonnes of carbon from the atmosphere. achieved and an end to a culture of dependence on expensive foreign imports.’

While Highview Power is a pioneer in this field, a number of listed investment funds are also stepping in to finance the construction of new energy storage units.

This opens up investment opportunities for those seeking to diversify their sources of dividend income – while indirectly supporting the movement towards the elimination of greenhouse gas emissions.

Investment funds active in this area include Gore Street Energy Storage, Gresham House Energy Storage, and Harmony Energy Income.

A few days ago, I had a long conversation with Alex O’Cinneide, CEO of Gore Street Capital, the private equity firm that manages Gore Street Energy Storage.

The trust has storage assets worth £527 million in its portfolio – located in the UK, Ireland and abroad. The units it owns can store electricity on a large scale. They are leased to National Grid, among others, which can use them to collect excess energy or to provide extra electricity when the grid is under pressure.

The income the trust generates is distributed in three ways. It is used to pay management fees; part is set aside to finance the construction of more storage facilities; and the remainder (the portion you may be interested in) is used to pay dividends to shareholders.

The trust’s dividend record is stable. In the three full fiscal years it has negotiated to date, it has paid an annual dividend of 7 pence per share. With shares trading at around £1.09, this represents a healthy dividend of around 6.4 per cent per annum.

As the trust’s assets increase in value, O’Cinneide says, there is every chance that dividend payments will also increase. Return on capital is of secondary importance. Echoing Rupert Pearce’s words, O’Cinneide told me: ‘Without storage, we can’t rely on more renewable energy to light our homes and power UK industries. It means being dependent on gas imports from terrible regimes.’

Coincidentally, Gresham House Energy Storage has also paid annual dividends of 7 pence per share, although the shares look quite expensive compared to the value of the trust’s underlying assets. Harmony Energy Income only launched late last year.

These trusts are not without risk. Significant delays can occur between the construction of storage units and connection to the grid. Construction costs – including key components such as lithium batteries – are also rising. Greater reliance on nuclear energy could also upset the apple cart.

But these storage units will play an increasingly important role in the energy infrastructure of our country (and also elsewhere in the world). Income seekers should rule over them.

Better, I’d say, than receiving a dividend from BP.

Please really review

It really pains me when financial organizations ask me to review their customer service before they’ve even delivered an ounce of it.

It happened 12 days ago when I reported a Heathrow savings bond scam to the Financial Conduct Authority through the online channel that consumers are being asked to use. I wrote about the fraudulent bonds a week ago.

Instead of responding to the information I had already sent, the response (two days later) was an email asking for more details. It then asked me to complete a survey rating my experience – stating it would help improve its future service.

How can I rate a ‘service’ when none has been given? Instead of having consumers fill out questionnaires proclaiming their service is wunderbar, the FCA should put all of its energy into catching fraudsters.

When it comes to fraud, delays on behalf of the regulator can cost the consumer serious money.

Beware of these ATM crooks

ATMs continue to attract criminals, intent on stealing our card details through techniques such as skimming (capturing your PIN) and trapping (taking your card).

Of all the card machines I use – at work, at home or when traveling – one set of two ATMs is more prone to crime than any other: the NatWest ATMs outside the branch on Kensington High Street in west London.

I have been a victim of skimming at least twice when using these machines. I even complained to the bank only to be told they are not exactly targeted by criminals.

Of course I have to trust my instincts, but nine days ago I simply used one of the ATMs to withdraw some cash. When I opted for cash I spit out £10 (without choosing how much I wanted) and then my debit card. All very suspicious. When I looked at the adjacent ATM, someone had scribbled a note: “Do not use, police have contacted.”

I immediately called my bank and the card was canceled before any fraud. But it has left me without a debit card – and access to cash – while a replacement card is issued.

I won’t be using the machines again, that’s for sure. Lesson learned. Have you become a victim of ATM fraud? Let me know by emailing: jeff.prestridge@mailonsunday.co.uk.