Legal & General has acquired a 36% share in ground source heat technology company the Kensa Group as it continues to invest in green energy.
The financial services giant said that there is a significant and immediate opportunity for low carbon heating, as new regulations are likely to outlaw fossil fuel heating systems for new build homes in coming years.
Additionally, retrofitting homes as the UK moves towards net zero emissions by 2050 is likely to provide large opportunities for alternative heating systems such as ground source heat pumps.
Kerrigan Procter, CEO of Legal & General Capital, said the investment would allow Kensa to scale up at pace, providing capacity to the ground source heat sector.
“Our partnership marks a major milestone for Legal & General as we look to invest in the transformation of the energy system, and also add critical capabilities to deliver our own ambitious target to achieve net zero homes."
He added that Legal & General were delighted to play a role in the transition, and support 400 skilled workers in the UK green economy.
“We expect further accelerated growth in employment in the sector as the UK invests for the future post COVID-19 where tackling climate change should dominate the agenda,” said Procter.
The company already has a portfolio of investments in the clean energy space, after pledging back in 2016 to support innovation and the emergence of clean energy.
Recently, Legal & General joined EDF in acquiring electric vehicle charging company Pod Point, taking a c.23% stake in the company. Previous, it has also invested in software company Upside Energy, helping to scale up the company to commercialisation.
Kensa is already the UK’s largest manufacturer and installer of ground source heat pump technology, and the only integrated supplier. As such, partnering with them offers Legal & General a unique opportunity to work with a market leader in a nascent sector, the company said.
Simon Lomax, CEO of the Kensa Group, said they were exciting that Legal & General Capital had recognised that ground source heat pumps will play a “major role” in the UK's energy transition.
“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, contributing towards the UK's ambitious 2050 net zero carbon target.”