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Construction News

29 August 2025

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Welsh house-builder pilots innovative heat pump model

13 minutes A housing development is going up near Pontypridd could prove the catalyst for new £100bn clean energy asset class.

Working going on at Parc Eirin in Tonyrefail
Working going on at Parc Eirin in Tonyrefail

The UK’s first investor-funded ground source heat pump network has broken ground in Tonyrefail in South Wales.

The heat network is being installed for affordable housing developer Tirion Homes by British heat pump manufacturer Kensa and backed by funds managed by Octopus Energy’s renewable arm, Octopus Energy Generation

Funded networks, like the one being installed for 114 new homes at the Parc Eirin development in Tonyrefail, are set to be a cornerstone of the UK’s energy transition. By 2040, some 250,000 homes a year are expected to connect to one of these networks.

The funded network model creates a new, subsidy-free way to install clean heat that, according to Kensa, “makes it easier than ever for millions of households to benefit from the high-efficiency and reliability of ground source heat pump technology”.

Once complete, each Parc Eirin property will be fitted with a Kensa Shoebox NX ground source heat pump, housed inside each 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 does not have to pay the upfront installation cost.

The system 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 reduced carbon emissions.

The renewable heating method has been fitted in more than 100 other properties at Parc Eirin, completed during a previous phase of the development. Each new property 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.

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Tirion Homes, alongside its contractor Morganstone, is building the new homes. The not-for-profit housing provider received funding from the Development Bank of Wales and the Welsh government to complete this phase of the Parc Eirin development. Private investors, including pension funds, will fund the long-life heat pump infrastructure, expected to last beyond 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 provider 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.

Kensa chief executive Tamsin Lishman 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… Parc Eirin is a flagship initiative showing how we can deliver game-changing renewable heating at scale.”

 Tirion Homes chief executive David Ward said: “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.”

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MPU

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