Energy supplier acquires heat pump manufacturer RED
UK: Octopus Energy has taken a controlling interest in Irish heat pump manufacturer Renewable Energy Devices (RED), with the promise of scaling production to over 1,000 units per month.
The multi-million pound deal sees energy supplier Octopus completing the full acquisition of the Craigavon-based business by the end of this year.
Octopus says that the deal will disrupt the market, allowing the companies to build 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.
When bought with the UK government’s new Boiler Upgrade Scheme, the company says they will cost about the same as a gas boiler. By scaling production, the partners are planning to bring costs down even further, with a view to eliminating the need for government support over time.
RED’s existing factory in Craigavon will see a significant expansion following the investment, creating 100 new 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.
Renewable Energy Devices Ltd was incorporated in March 2014 and produces a range of air source heat pumps along with controls, hot-water distribution and storage systems.
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.
“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 Octopus Energy Group founder and CEO Greg Jackson.
“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.”
RED founder and MD Dr Jason Cassells commented: “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.”