Legal & General takes major stake in Kensa Group
The deal follows Legal & General’s increased stake in Pod Point, one of the UK’s largest electric vehicle charging companies, alongside EDF.
Heating and hot water for UK homes make up 25 per cent of total energy use and 15 per cent of greenhouse gas emissions. By 2025, the current consultation on new building regulations will likely outlaw fossil fuel heating systems for new build homes, presenting a significant and immediate opportunity for an alternate low carbon heating solution. Retrofit represents a significant market opportunity, with around 23m homes in Great Britain using mains gas as their heating fuel, 2m homes electrically heated, and the remaining 2m using heating oil or other fossil fuel systems.
As the UK’s largest manufacturer and installer of ground source heat pump technology, Kensa claims to be the only integrated supplier and one of the most developed and effective for delivering homes with the lowest operational carbon emissions.
Alongside offering an alternative heat solution to existing and new build houses across the UK, this partnership will provide Legal & General’s extensive ecosystem with a low carbon heating solution, as it works with local authorities, government and key industry players to create scaled solutions.
Within Legal & General’s own fast-growing housing platform, which spans build-to-rent, build-to-sell, later living and affordable housing, as well as modular construction, plans are already under way to make all its new housing stock operationally net carbon neutral between now and 2030. As part of this, its later living business, Inspired Villages Group, is in advanced discussions with Kensa to put in place ground source heat and has rolled out Pod Point electric car chargers, amongst other initiatives.
Kerrigan Procter, CEO of Legal & General Capital, said: “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 investment in Kensa will enable the business to scale up at pace, bringing vital capacity to the 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."
Simon Lomax, CEO of the Kensa Group, added: “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.”
Legal & General’s partnership with Kensa coincides with the completion of a new 900m2 manufacturing premises in Cornwall, which will enable the production of up to 30,000 ground source heat pumps every year.
