Kensa has begun installation of one of the UK’s first investor-funded ground source heat pump networks with funding from Octopus Energy Generation.
The scheme has broken ground in South Wales, and will see a heat network for 114 new homes at the Parc Eirin development in Tonyrefail. By 2040, 250,000 homes a year are expected to connect to one of these networks.
Once complete, each Parc Eirin property will be fitted with a Kensa Shoebox NX ground source heat pump, housed inside the property like a traditional gas boiler. The shared underground infrastructure mirrors the way existing utilities like water, gas, and broadband are delivered, where the customer doesn’t have to pay the upfront installation cost.
The funded network model creates a new, subsidy-free way to install clean heat, making it easier for households to benefit from the high-efficiency and reliability of ground source heat pump technology.
It uses underground pipes connected to a compact heat pump inside each home, offering the “familiarity of a gas boiler but with lower running costs and dramatically reduced carbon emissions”, Kensa said.
Each new property at the development from this latest phase will feature a ground source heat pump, solar panels and battery storage, with all works expected to be completed by the end of 2027.
Private investors, including pension funds, will fund the long-life heat pump infrastructure, expected to last over 100 years, with households paying a standing charge to connect and use it.
Octopus Energy Generation’s investment at Parc Eirin comes after it received £330m from pension providers, Smart Pension, to support and invest in these projects. It also follows a £70m joint investment in Kensa from Octopus Energy Generation and Legal & General in 2023.
Tamsin Lishman, CEO at Kensa, said:
“Kensa’s unlocking of third-party institutional investment is a major milestone for ground source heat pump deployment and will unlock access to deliver energy-secure heating for millions of homes, whether new build or existing homes.
“By turning ground source infrastructure into an attractive investable asset for pension funds, we can address the financial barriers to adoption and empower the installation of highly efficient and affordable heating and hot water systems that cut both energy bills and carbon emissions.
“At Kensa, we are proud to be working with Tirion Homes, Octopus Energy Generation and the Welsh Government on this project. Parc Eirin is a flagship initiative showing how we can deliver game-changing renewable heating at scale.”
Alex Brierley, Co-Head of Octopus Energy Generation, said:
“Decarbonising heat is one of the biggest hurdles on the UK’s path to net zero, and it calls for practical, scalable solutions. This project shows how we can do things differently – harnessing proven technology to deliver clean, affordable warmth from the ground up, without the usual upfront costs. Working with Kensa, we’re proving a model that can grow to heat communities nationwide, helping households save money while moving the UK closer to a low-carbon future.”
David Ward, CEO at Tirion Homes, said:
“We are delighted to be delivering the heating solution for Parc Eirin with Kensa with the support of the Welsh Government. The delivery of renewable energy infrastructure remains a huge challenge, particularly in marginal locations, where project viability is challenging.
“Tirion has been working hard to identify opportunities to reduce the cost burden of energy infrastructure, and the Kensa model provides a commercial route to delivering our future heating needs without prohibitive up-front costs to consumers, whether they be house purchasers or those renting homes.
“Tirion is at the forefront of developing new partnerships and collaborating with energy investors and looks forward to rolling out these technologies with our partners on all our future schemes.”
The Cabinet Secretary for Housing and Local Government, Jayne Bryant, said:
“The homes at Parc Eirin will be climate-friendly and future-proof – a fantastic example of how the ground source heat pump network can be both innovative and commercially viable.
“I’m so proud of our work with partners like Tirion Homes to deliver even more affordable and energy efficient homes across Wales, and I can’t wait to see this project delivering for households, the local economy and the environment for many years to come.”
Image courtesy of Kensa
