Tackling the climate crisis

Legal & General and Kensa: Heat the Streets

Heat the Streets is a 2 year project, part funded by the ERDF, demonstrating a sustainable pathway to net-zero for UK housing through networked ground source heat pumps and funded arrays, providing the 21st century alternative to the gas grid for rural and urban areas alike.

11 Apr 2023

The Kensa Group

The Kensa Group is a fast-growing collective of British businesses involved in the manufacture and installation of ground source heat pump networks. Kensa is a long-established market leader and the only UK manufacturer of heat pumps. Over the past two years, Legal & General has invested a total of £15.7 million into the company.

Heat the Streets

Heat the Streets is a two-year initiative spearheaded by Kensa Utilities that aims to make clean, efficient, and renewable heating widely accessible. The scheme involves installing ground-source technology in new and existing homes across Cornwall; and it intends to act as a ‘greenprint’ for how we can decarbonise the streets of Britain. Crucially, each system will be connected to a communal network of underground piping that will extract renewable heat from boreholes – the shared element of which ensures that more buildings, whether they be residential or commercial, can easily be added to the system.

The boreholes are drilled 100 metres underground where liquid can absorb heat at a constant 10C-12C, which is then pumped into the home where the warmth can be condensed by the ground source heat pump to provide 100% of the home’s heating and hot water needs. Ground source heat pumps are renewable heating systems that harness heat from the ground or water sources and use it to heat radiators, underfloor heating systems, and hot water. They can also be used to provide cooling. As the ground temperature in the UK typically remains between 8C – 12C all year round, ground source heat pumps are more efficient than air-source, which are subject to temperature changes in the mornings, evenings, and in the winter. A ground source heat pump is typically five times more efficient than a gas boiler.

The networked model of heat pumps is no different from the gas grid model. A ‘white box’ ground source heat pump is installed in the home, and the consumer pays a standing charge to connect to the heat network.

Ground source heating systems have the lowest carbon footprint, the lowest grid impact, and according to Kensa, can achieve efficiencies of 550% – meaning 5 times more energy is extracted than is put in. As such, the pumps can reduce the carbon output associated with heating each home by 70%, which also means lower operating costs. As the cost-of-living crisis continues, with an estimated 8.4 million people living in fuel poverty from April 2023, innovative solutions are required to ensure that people will be able to heat their homes without falling below the poverty line. At Legal & General, we recognise that ground source heat pumps are one of those solutions, which is why we have invested in Kensa to help increase production volume and create more energy savings for more end users.

Ground source technology

Ground source technology is likely to have the greatest impact in off-grid villages, new developments, terraced or medium density housing and social housing communities.

Off-grid villages

In Stithians, a Cornish village that is not on the gas grid, residents have only ever had limited options for heating like: oil boilers, lpg, electric heaters and air source heat pumps. None have proved to be a great option, as the oil boiler leaks odorous fumes while the air source heat pump fails to generate an adequate amount of heat. Recently, however, residents were given a new option through the Heat the Streets scheme.

Residents involved in the project reported an immediate difference in the amount of heat in their homes, and in terms of price, will pay an estimated average of £130 pounds per month – which will save them money each month compared to a gas boiler.

With 4 million households in the UK not on the gas grid, the majority of which in villages, Stithians is proving that ground source heat pumps could be an ideal solution. Wouter Thijssen, managing director of Kensa Utilities, says, “We see Stithians as a blueprint for decarbonising millions of UK Homes. Burton-Upon-Trent was the first part of the UK to convert to natural gas in the late 1960s [rather than using gas that derived from coal] – we see Stithians as the first part of the UK to convert to the 21st-century version: networked heat pumps.”

Existing UK housing stock

The UK has 27.8 million households, and to effectively reach the decarbonisation targets, a robust and efficient deployment strategy is necessary. Networked Heat Pumps/Ambient Loop Heat Networks have not yet become a mainstream solution due to their high upfront cost.

Kensa Utilities’ funded array model eliminates these costs and designs, installs, and operates networked heat pump solutions at scale.

Based on a Whole Life - Whole Cost Benefit Analysis, Ambient Loop Networked Heat Pumps are the lowest cost, lowest carbon decarbonisation pathway, particularly in dense urban areas, allowing entire streets to quickly switch to the technology. Communities can install the underground infrastructure required for ground source heat pumps a whole street at a time, which would take place over time, similar to the original gas grid rollout.

New developments

Following the success at Stithians, networked heat pumps are capturing the attention of some housebuilders, especially those building new estates, as it would be easy to lay a heat network alongside the water, power, and telecoms prior to paving the roads. Despite the higher installation fee, ground source technology has lower maintenance costs, making it a viable option for new developments. According to Persimmon Energy Director Gus Watt, who is in the process of assessing 12 potential sites for implementation, the technology could be scalable to developments with 100 to 1,000 units. Through Kensa’s funded array model they are able to offer ground source for the price of air source, allowing developers to offer a more efficient low carbon heating solution to homeowners.

Social housing

As the shared ground array technology was pioneered in projects involving council-owned tower blocks, Kensa has shown that networked heat pumps are capable of heating larger developments – and improving the quality of life for the residents within.

According to Ieman Barmaki, Sustainability Director of Kensa Contracting, the average annual income for social tenants is around £15-16,000, while the average rent sits between £7-8,000 a year. He says, “If you’re charging those residents £2-3,000 for heating, something’s got to give. They’re not going to heat their homes properly because they still have to eat.”

This is the case for many social tenants, including Colin Bridgehouse of Gooderham House, who says “I literally can’t afford to put the heating on because it just swallows my money”. For Diane Barr, a long-time resident at George Tilbury House, a tower block that has since been retrofitted with Kensa’s networked heat pumps, heating was a major concern, “The heating is a big expense. At the moment, it’s about £70 a week – that’s just the heating, not the washing or drying or anything like that.”

Kensa, and the ground source heat network, is a beacon of hope for these residents. “It’s going to make such a difference”, says Barr.

Barmaki explains, “By retrofitting those properties with ground source heat pumps and giving that saving back to the residents, it can help alleviate some of those concerns and means they don’t have to choose between heating and eating. It’s a very significant difference in quality of life for the residents here.”

Octopus Energy investment

In May 2023 Legal & General Capital and Octopus Energy’s generation arm announced a £70 million investment in The Kensa Group.

This marks the biggest investment ever made in ground source tech in Britain. It will allow Kensa to rapidly expand and install 50,000 ground source heat pumps a year by 2030. The move will drive down costs of heat pumps and reduce reliance on polluting gas boilers.

  • £70m investment to scale ground source heat pump business Kensa Group
  • Further demonstrating Legal & General Capital’s dedication to scaling innovative businesses that reduce emissions
  • Next step in Octopus’ drive to replace polluting gas boilers with heat pumps
  • Investment will create 7,000+ green jobs in Britain by 2030