Octopus Energy’s generation arm and Legal & General Capital are looking to boost the UK’s heat pump rollout by investing £70 million in the The Kensa Group, the Cornwall-based manufacturer and installer of ground source heat pumps. The investment is aimed helping to drive down costs and enabling Kensa to expand its current output and install 50,000 ground source heat pumps a year by 2030.
The plan is to make ground source heat pumps more accessible to more properties, including retrofits for social housing, terraced housing and non-domestic buildings. Finance will also be provided for Kensa to offer its ‘networked heat pumps solution to house builders, housing associations and non-domestic customers.
Dr Matthew Trewhella, CEO of The Kensa Group, comments: “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.”
The deal heralds Octopus Energy Group’s entry into the ground source heat pump market, and complements the energy supplier’s existing air source heat pump expertise. The investment from Octopus Energy Generation – which manages £6bn of renewable assets and energy transition projects – is the first deal from its new £500m Octopus Energy Transition Fund (OETF), which is currently raising capital from investors. OETF is backing companies rolling out technologies decarbonising the economy, with projects in the pipeline globally in storage, grid and low carbon transport, green hydrogen and e-fuels.
This investment is subject to applicable regulatory approval and is expected to complete in the third quarter of 2023.
