Gore Street Energy Storage Fund plc announced on 12 October 2026 that it has signed a two-year tolling agreement with MAG Energy Solutions Inc., a North American energy solutions provider.

The agreement covers 80% of the capacity of three of the company's operational assets in Texas: Snyder, Sweetwater, and Westover, which together total 29.85 MW / 59.7 MWh of capacity, with 23.9 MW / 47.8 MWh under the toll.

The agreed toll price is approximately USD 76,348.64/MW/year, equivalent to USD 8.72/MW/hour, payable on 80% of each project's capacity and adjusted for asset performance.

Terms of the Agreement

From 19 October 2026, MAG will manage the bidding, scheduling, and dispatch of all three assets, taking over from GSET, the current optimiser. MAG will pay a fixed toll for the right to operate the 80% contracted portion of the assets' capacity over the two-year term.

The remaining 20% of capacity will retain its merchant exposure. Under the arrangement, MAG will trade this capacity, and the resulting revenue will be shared between MAG and the company.

Rationale: Contracts as a Downside Hedge

The agreement forms part of an ongoing portfolio-wide effort to diversify revenue. The company stated that contracts provide a reliable base and limit downside risk, while retained merchant exposure maintains the opportunity for upside. Contracted revenues already support the company's assets in Ireland, Great Britain, and California.

Tolling structures have long been used in US power markets to give generators predictable income and are becoming more common in battery storage. Under the Agreement, MAG pays a fixed toll fee for the right to operate 80% of the assets' capacity for two years.

Alex O'Cinneide, CEO of the Investment Manager, said the company had "consistently explored commercial strategies to mitigate downside risk," pointing to the Resource Adequacy contract in the US and the DS3 contract in Ireland, and noted the tolling agreement had been "several months in the making."

He said it provides the projects with stable, contracted revenues and visibility for the next two years while keeping a portion of capacity exposed to merchant revenues, allowing the company to "bridge the gap between higher expected returns in Texas in future years and current market conditions."

He added that MAG brings deep experience across North American electricity markets.

Context: A Cyclical Texas Market

The company described contracting as particularly valuable in Texas, which has been a highly cyclical market for the fund. Revenues reached record highs in 2022-23, driven by summer scarcity pricing and volatility. Since then, rapid growth in installed capacity has compressed spreads, and revenues have fallen to cycle lows.

The company's Texas assets averaged approximately USD 19,821.54/MW/year on an annualised basis in the quarter to 30 June 2026, well below the agreed toll price of USD 76,348.64/MW/year.

The company stated that the longer-term outlook for Texas remains strong, supported by data centers and industrial electrification, which are expected to drive a sharp rise in demand across the state.

The agreement will support the assets through current conditions while keeping exposure to merchant upside expected as the market recovers.

Expected Contracted Revenue Share and Next Steps

O'Cinneide said that, based on present contracts, the company expects contracted revenue to account for approximately 40% of total revenue over FY26/27.

He added that the company "continues to explore similar structures where they add value to the portfolio, complementing our in-house trading, which continues to deliver significant outperformance," and that it looks forward to updating shareholders as these initiatives progress.

Company Contacts

Further information is available from Gore Street Investment Management Limited (Alex O'Cinneide / Ben Paulden), with Shore Capital and J.P. Morgan Cazenove acting as Joint Corporate Brokers and Burson Buchanan handling media inquiries.

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