Legal & General Capital has acquired 36% of ground source heat pump company The Kensa Group.
Legal & General said the acquisition complemented its clean energy investment portfolio, which recently included an increased stake in vehicle charging company Pod Point. It highlighted its “fast-growing housing platform” with build-to-rent, build-to-sell, later living and affordable housing, saying it wants to make all its new housing stock operationally net carbon neutral between now and 2030. As part of this, its later living business, Inspired Villages Group, is in advanced discussions with Kensa to put in place ground source heat and has rolled out Pod Point electric car chargers.
The company said that there was a “significant and immediate opportunity” for low carbon heating solutions because new building regulations are set to outlaw fossil fuel heating systems for new build homes. In addition, retrofit represents “a significant market opportunity, with around 23 million homes in GB using mains gas (carbon intensive) as their heating fuel, two million homes electrically heated (high running costs) and the remaining two million using heating oil or other fossil fuel systems (carbon intensive and high running costs)”.
Legal and General Capital said it invests in sub-scale industries that it can use its platform to grow rapidly in the post-crisis period. The Kensa investment “supports Legal & General’s ambition to form part of the UK solution to reaching net zero carbon emissions by 2050”. It will also use Kensa with a low carbon heating solution to create scaled solutions with local authorities, government and other industry players.
Simon Lomax, chief executive of the Kensa Group, said: “This significant investment will allow the Kensa Group to strengthen its market-leading position by accelerating Kensa Heat Pumps’ research and development programme, expanding Kensa Contracting’s district heating shared ground loop array activities, and providing zero-cost ground arrays via innovative funding programmes through Kensa Utilities. The investment also provides the opportunity to install our systems at scale at sites being developed by Legal & General’s property business portfolio.”
Legal & General’s partnership with Kensa coincides with the completion of new manufacturing premises in Cornwall, which will enable the production of up to 30,000 ground source heat pumps every year.