Richmond Council’s pension fund to invest in green energy project
24 May 2023
Richmond Council’s pension fund is backing Britain’s biggest investment in the UK’s ground source heat pump industry. The Council has pledged to reduce the fund’s investment in fossil fuel-based industries and switch fund to green energy projects.
Councillor Julia Neden-Watts, Chair of the Council’s Environment, Sustainability, Culture and Sports Committee said:
“When we declared a climate emergency in 2019, we committed to looking at every part of the Council’s operations and become a carbon neutral organisation by 2030. This includes the investment portfolio and two years ago we approved a policy to decarbonise our investments.
“Ground source heat pumps are a crucial part of the UK’s future, sustainable, energy security, reducing our reliance on gas, and our emissions. I’m really pleased we are supporting the industry in this way.”
Last year the pension fund announced plans to invest up to £80m in two energy transition funds based on non-traditional renewable projects such as battery storage, green hydrogen and other carbon reduction investments.
One of these funds - the Octopus Energy Transition Fund – is using those pension funds to invest £70m in ground source heat pump business Kensa Group – as part of efforts to replace polluting gas boilers with eco-friendly heat pumps.
The investment will allow Kensa to rapidly expand and install 50,000 ground source heat pumps a year by 2030 – driving down the costs of heat pumps and reducing reliance on gas boilers. It will also help create around 7,000 jobs by 2030.
Zoisa North-Bond, CEO of Octopus Energy Generation, said:
“The heat pump revolution is off to a flying start: it’s a tried and tested replacement for gas boilers and can drive down consumers’ energy bills for good. Backing Kensa will help rapidly expand Britain’s fast-growing heat pump economy. This deal is a huge milestone for our exciting new energy transition fund, as we invest in ambitious companies rolling out tech to turbocharge the clean energy shift.”
The Pension Fund has a value of £2.7bn. It has set a net-zero target of 2050, with the goal of achieving a 60 per cent reduction in emissions by 2030.
Richmond and Wandsworth Councils operate a joint pension fund following the 2016 decision to combine the two sets of employees into a shared staffing arrangement (SSA) with a single workforce serving the two councils. The fund is supported by contributions from employees – with most members of staff contributing more than seven per cent of their salaries into the scheme.
Up to: May 2023
Updated: 24 May 2023