Investing £70m in Kensa - A Significant Step Forward for the Heat Pump Maker
This morning, Octopus Energy and the capital investment division of Legal & General revealed that their joint investment into ground source heat pump technology was the largest ever in the UK.
Kensa was told that their £70 million expenditure would make it feasible for them to set up around 50,000 ground source heat pumps annually by the year 2030, helping to make the technology accessible to various kinds of dwellings and other buildings, such as retrofits, terraced houses, social housing, and non-domestic edifices.
Heat pumps can take heat from the ground and convert it into energy to power radiators, underfloor heating, and hot water cylinders. They are much more logical than gas boilers, providing up to four times as much zero-carbon heat for the same amount of electricity.
Kensa's plans to create a 'networked heat pump' for home builders, housing associations, and non-domestic properties will be supported by new investment. This shared communal loop of pipes could develop into a "new renewable asset class" worth £1bn by 2030.
North-Bond, CEO of Octopus Energy Generation, declared that the "heat pump revolution" was beginning with a burst of success.
"The replacement of gas boilers with Kensa has been proven to work and can save customers money," she added. "We are excited to invest in companies deploying innovative technology to accelerate the transformation to clean energy, and this deal marks a tremendous achievement for our new fund."
Octopus Energy Group has taken the step to enter the ground-source heat pump industry, having already released their air-source heat pump earlier in the year for domestic use.
Octopus Energy has launched a £500m Transition Fund, and the investment is the first to be made from the pool of capital raised from investors.
The Kensa Group's CEO, Matthew Trewhella, labeled the agreement as a "noteworthy moment" for ground source heat pumps.
He asserted that this investment would facilitate Kensa's vision of a widespread shift to low-carbon heating, which would involve substituting the gas grid with a heat network suitable for the 21st century. According to him, their approach takes advantage of investment capital to fund infrastructure, lessens the burden on the electricity grid, and allows for a fair transition - keeping heating bills low and tackling fuel poverty while addressing climate change mitigation.
Legal & General's capital investment arm has conducted its third investment in Kensa through this deal.
Legal & General Capital's managing director, John Bromley, noted that the company's partnership with Kensa began in April 2020, intending to enlarge the implementation of ground source heat pumps in the UK. He added that, since their initial investment, Kensa had developed rapidly, launching a new factory and performing some notable new-build and retrofit works around the UK.
The collaborators predicted their investment could create 7,000 positions by 2030.