Octopus Energy’s generation arm and Legal & General Capital are to invest £70 million in the Kensa Group.
The investment will allow Kensa, which manufactures and installs ground source heat pumps, to rapidly expand and install 50,000 ground source heat pumps a year by 2030.
Ground source heat pumps extract around four units of clean heat from the environment for every one unit of electricity they consume, making them much more efficient than gas boilers.
This investment will help make heat pumps accessible to more properties, including retrofits for social housing, terraced housing and non-domestic buildings. Finance will also be provided for Kensa to offer house builders, housing associations and non-domestic customers its ‘Networked Heat Pumps’ solution at a lower cost. This effectively creates a new renewable asset class.
Dr Matthew Trewhella, CEO 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.”
Octopus Energy Generation – which manages £6bn of renewable assets and energy transition projects – makes this investment as the first deal from its new £500m Octopus Energy Transition Fund (OETF), which is currently raising capital from investors.
OETF includes a cornerstone investment from Wandsworth Pension Fund. 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 latest Kensa investment is subject to applicable regulatory approval and is expected to complete in the third quarter of 2023.