The new investment company has already struck a contract with Tesla Motors. Upon IPO, Harmony will buy Tesla’s Megapack batteries, which can be used for two hours, and use the car maker’s Auotbidder AI software, which manages energy trading with the national grid.
Harmony Energy is a UK battery energy storage systems (BESS) project developer with a track record in developing, funding and supervising the construction of such projects and other renewable generation projects in Great Britain and has worked with Tesla since 2016.
The trust’s investment objective is to provide investors with an “attractive and sustainable level of income returns” by investing in commercial scale energy storage and renewable energy generation projects. Its initial focus will be on BESS located in Great Britain.
Norman Crighton, prospective Chairman of Harmony Energy, said: “The company offers investors the opportunity to invest in a rapidly growing part of the renewables sector; as wind and solar renewable energy projects increase, so too will the need for battery storage energy systems.”
Crighton added that “the battery energy storage sector is one that has seen remarkable growth over the past ten years; it will only grow further and the company will be at the forefront of this growth.”
It is targeting a dividend yield of 8% per annum, payable quarterly from 2023 But will pay an initial dividend yield of 2% in 2022.
The investment adviser fee will be 0.9% per annum of the lesser of the company’s net asset value or average market capitalisation, reducing to 0.8% on amounts in excess of £250m.
No other asset management fees or performance fees will be payable to the Harmony Group.
Paul Mason, managing director of the investment adviser team, commented: “Battery energy storage offers exciting growth, with 1.2 GW built and operating today versus a potential energy storage requirement of up to 43 GW by 2050…We believe there is enormous potential in the sector and the 2-hour duration battery will be best placed to take advantage of this. We look forward to building out this opportunity.”