Octopus Energy’s generation arm has partnered with Legal & General Capital to invest £70 million in UK ground source heat pump manufacturer, The Kensa Group.
This is the “biggest investment ever made in ground source tech in Britain” according to the energy supplier.
The investment will allow Kensa Group to expand at scale, targeting 50,000 ground source heat pump installations by 2030 – almost 10% of the Government’s target of 600,000 yearly installations by 2028.
Kensa expects its growth to create more than 7,000 green jobs in the UK by 2030.
Earlier this year, the Government announced the launch of a new £5 million Heat Training Grant to support 10,000 trainees to become “low-carbon heating experts”.
The funding will also make heat pumps more accessible, as finance will allow Kensa to offer house builders, housing association and non-domestic customers its ‘Networked Heat Pumps’ solution at a lower cost.
According to Octopus this will great a “new renewable asset class” catalysing a sector that could exceed £1 billion by 2030.
Kensa will also offer retrofit services for social and terraced houses as well as non-domestic buildings.
“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,” said Dr Matthew Trewhella, CEO at The Kensa Group.
“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.”
Last year saw record growth for MCS-certified heat pump installations, an upward trajectory which continued into 2023 with a 10% increase in MCS-certified heat pump installed between February and March.
To support this growth, the Government recently announced that it would extend the Boiler Upgrade scheme to March 2028, however the Energy & Climate Intelligence Unit warned that the scheme could run out of vouchers ahead of its end date.
“The heat pump revolution is off to a flying start: it’s a tried and tested replacement for gas boilers and can drive down consumers’ energy bills for good. Backing Kensa will help rapidly expand Britain’s fast-growing ground source heat pump industry,” said Zosia North-Bond, CEO of Octopus Energy Generation.
“This deal is a huge milestone for our exciting new energy transition fund, as we invest in ambitious companies rolling out tech to turbocharge the clean energy shift.”