Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
Octopus Energy Generation and Legal & General have together invested £70 million in ground source heat pump manufacturer and installer, The Kensa Group.
This represents the first deal from Octopus’ new £500 million Energy Transition Fund and is the biggest investment ever made in ground source technology in Britain.
It will allow Kensa to rapidly expand and have the capability to install 50,000 ground source heat pumps a year by 2030.
Kensa will offer finance to house builders, housing associations and non-domestic customers for their ‘Networked Heat Pump’ solution at a lower cost.
This effectively creates a new renewable asset class, kick-starting a sector that could exceed £1 billion by 2030.
Kensa expects its growth to create over 7,000 green jobs in the UK by 2030.
The government has set a target of 600,000 heat pump installations a year by 2028 as part of its efforts to reach net zero.
Ground source heat pumps work by harnessing freely available heat energy in the ground or in water using electricity and produces around four units of clean heat for every one unit of electricity that they consume.
The deal represents the third significant investment by Legal & General Capital into Kensa.
Since its first investment in April 2020 the company has grown quickly, opened a new factory and delivered new build and retrofit installations across the UK.
Octopus Energy Generation chief executive Zoisa North-Bond said: “The heat pump revolution is off to a flying start: it’s a tried and tested replacement for gas boilers and can drive down consumers’ energy bills for good.
“Backing Kensa will help rapidly expand Britain’s fast-growing ground source heat pump industry. This deal is a huge milestone for our exciting new energy transition fund, as we invest in ambitious companies rolling out tech to turbocharge the clean energy shift.”
Dr Matthew Trewhella, chief executive of The Kensa Group, said: “This is a monumental moment for ground source heat pumps. This investment will help unlock Kensa’s vision of a mass transition to low carbon heating by replacing the gas grid with its 21st-century equivalent – an ambient temperature heat network.
“Our approach harnesses the power of investment capital funding infrastructure, reduces the strain on our electricity grid and enables a just transition – keeping heating costs low and addressing fuel poverty simultaneously with climate change mitigation.
“We’re extremely proud to partner with Octopus Energy and Legal & General Capital who show incredible leadership in bringing about our low carbon energy future.”
This latest Kensa investment is subject to applicable regulatory approval and is expected to complete in the third quarter of 2023.
Please login or Register to leave a comment.