The Kensa Group, UK manufacturer and installer of ground source heat pumps, today announced Legal & General Capital (LGC) has made a further £8 million investment into the company, bringing LGC’s total investment to £15.7 million over two years.
17 Jun 2022
The capital will support the Kensa Group as it continues to scale up rapidly to accelerate the deployment of ground source heat pump technology and networks to meet demand, whilst meeting LGC’s ambitions to continue to support the clean energy transition.
Dr Matthew Trewhella, Kensa Group CEO: “This second investment from Legal & General Capital cements the successful partnership we have built together these past two years and marks a major milestone in the development of Kensa’s ground source heat pump solutions.
“The whole heat pump supply chain, including Kensa, will have to expand dramatically to meet the UK’s 2028 heat pump installation target. This investment will allow us to significantly step up our efforts in areas such as R&D and operations, as we continue to prepare for further rapid growth.”
The Climate Change Committee and the Government’s Heat and Buildings Strategy made clear that low carbon heat pumps are a key component in the UK’s journey to zero carbon and they can reduce an average household’s fuel bill of up to 27%, saving them approximately £261pa1, helping people out of fuel poverty.
Both the Climate Change Committee and the Government have ambitions for the UK to install 600,000 heat pumps per year by 2028. To date, between 30,000 to 40,000 pumps are installed annually.
Kensa Group and Legal & General Capital joined forces in April 2020 with the shared aim of securing a safe, reliable clean energy future. Legal & General Capital invests in green businesses providing scalable solutions to tackle the climate crisis. Kensa is the onlyintegrated supplier of ground source technology and its networked heat pump and infrastructure solutions are one of the most developed and effective for delivering the lowest carbon heating to homes for the lowest cost.
John Bromley, Head of Clean Energy at LGC: "We invest our capital in clean energy assets, businesses and technologies which will help accelerate the UK’s progress to a low-cost, low-carbon economy. Our partnership with Kensa is delivering at pace and this further investment in Kensa will enable the business to continue to scale up, bringing vital capacity to the sector.
We are delighted to continue to support a business which is playing a major role in the transition to low carbon heating in the UK, whilst supporting significant job creation in the low carbon sector.”
Kensa’s solution for the mass transition to decarbonised heat which embraces the scaled benefits of the technology, as featured at COP26, is a street-by-street deployment of ground array infrastructure to enable the connection of networked heat pumps as carbon intensive fossil fuel systems reach the end of their lifetimes and new properties are ready to connect.
James Standley, Kensa Group COO: “Deploying ground source heat pumps at scale is one of the very lowest cost ways to decarbonise our heating systems and we are confident that Kensa will play a key part in demonstrating and delivering this solution as part of the UK’s pathway to net zero.”
In the two years since Legal & General Capital made its initial investment, Kensa Group has been through a period of accelerated growth, bringing in highly skilled professionals to grow the business from 70 to 180 employees, subsequently bolstering the green economy. The Group revenue has doubled, from £15.5 million to £31.5 million, cementing the organisation’s position as UK market leader in a time when the market is growing rapidly and seeing increased competition.
Kensa Group’s manufacturing facility increased its production by 150% during the pandemic, breaking records for the number of ground source heat pumps made in the UK, and is working towards a further twofold increase in capacity by 2023. In addition, an estimated 8 million tonnes of carbon will be saved per year by Kensa ground source heat pumps that have been installed since April 2020. This is the equivalent of removing 2,797 combustion engine cars from the road.
1Figures provided by The Regulatory Assistance Project (RAP) February 2022
Legal & General Capital (LGC) is Legal & General Group’s alternative asset platform, creating assets for Legal & General Retirement and third-party clients in order to achieve improved risk-adjusted returns for our shareholders. LGC has built its capabilities in a range of alternative sectors, including in residential property; specialist commercial real estate; clean energy; alternative credit; and venture capital, which are all supported by long-term structural growth drivers, meet a financing gap and respond to a scarcity of supply that is underpinned by enduring societal needs.
Its purpose is to invest society’s capital for society’s benefit. Investing in the real economy and supporting the Group’s focus on climate and inclusive capitalism, LGC’s investments create jobs, change lives and contribute towards a net zero carbon future.
Legal & General has invested over £29bn in levelling-up regional economies, including through major UK-wide regeneration schemes and has recently made a commitment to enable all its new homes to operate at net zero carbon emissions from 2030.
(As of June 2021)
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.4 trillion in total assets under management* of which a third is international. We also provide powerful asset origination capabilities. Together, these underpin our leading retirement and protection solutions: we are a leading international player in pension risk transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
*at 31 Dec 2021