UK heat pump sector boosted by Octopus' RED investment

Octopus Energy Group has announced a strategic investment into heat pump manufacturer Renewable Energy Devices (RED) to scale production capacity to over 1,000 heat pumps a month.

The companies say the partnership will enable the production of quiet, highly efficient and stylish-looking heat pumps initially for UK customers. The products will come in a range of different sizes, with a focus on smaller options suitable for the most common homes in the UK.

The multi-million-pound deal sees Octopus take a controlling interest in Northern Irish firm RED, with a full acquisition by the end of this year.

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The investment is the latest in a long line of commitments Octopus Energy has made to building an industry around low carbon heating and heat pumps, following £10 million (€12 million) invested into the UK’s first research and development centre for the decarbonisation of heat based in Slough.

RED’s existing factory in Craigavon will see a significant expansion following the investment, creating 100 new green engineering jobs by 2024. Octopus is expecting the factory to produce over 1,000 heat pumps a month by the end of this year and keep growing from there. The partners are also in the process of scoping other locations to build further heat pump manufacturing facilities.

Octopus plans to incorporate its “smart grid” technology into the heat pumps. This will enable the pumps to make the most of “spare” capacity on the electricity grid and distribution networks, and reduce the load at peak times - and lower running costs for customers.

"This agreement will involve major investments into heat pump manufacturing, creating valuable green jobs across the UK and helping increase our energy security by getting more homes off gas, and drive down costs for customers," said Greg Jackson, Founder and CEO of Octopus Energy Group.

"This is the “Model T” moment for the heat pump industry. Thousands of heat pumps rolling out of RED’s Craigavon factory a month is just the beginning. Like the original Ford, we’re planning to scale production every year, cutting costs even further and making heat pumps affordable for everyone."

Heat pumps are one of the main pillars of the UK's roadmap towards energy security and decarbonisation. In its Energy Security Strategy, which was published last week, the Government announced the launch of a Heat Pump Investment Accelerator Competition in 2022.

The £30 million (€36 million) scheme aims to create a UK-based heat pump manufacturing sector with a goal of creating 600,000 heat pumps a year by 2028, increasing the country’s energy independence by reducing the demand for gas. 

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Dr. Jason Cassells, Founder and Managing Director of RED, said: "When I founded RED, I had a dream to make heat pumps affordable, to put as many heat pumps in as many homes as possible and to make green heating accessible to everyone.

"With Octopus’ financial backing, industry knowledge and tech expertise combined with our heat pump know-how, this dream will finally become reality. We’re at the cusp of a clean heating revolution, and Octopus is leading it."

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