Green Heat (And Cooling) Under Our Feet - Ep154: Tamsin Lishman

Bryony Worthington  
Hello, I'm Bryany Worthington and this is Cleaning Up. One of the challenges in getting to net zero is how to replace fossil fuels burned to generate heat. Currently the dominant provider in the UK and in many countries is fossil gas, distributed to individual homes by networks of pipes and burned in boilers. There's currently a fierce debate about whether the replacement for this greenhouse gas-laden sector should be a substitute fuel or a shift to electric heating, most efficiently through the use of heat pumps. Heat pumps are essentially refrigerators operating in reverse, using electricity to extract heat from the air or the ground and boost it to the temperatures we need to keep our home snug in winter. And as an added bonus, cool in summer. My guest this week is Tamsin Lishman, newly-appointed CEO of UK company Kensa Group. Tamsin leads an experienced team of engineers, product designers and project developers focused on scaling the heat pump market. I wanted to ask Tamsin about Kensa's network ground source heat pump solution, their goals as a company, and also about being a female leader in a traditionally male dominated energy sector. Sadly, there is some background noise as we were recording in central London, but to compensate, viewers of our YouTube channel can enjoy some images of Kensa's products. Please join me in welcoming Tamsin Lishman to Cleaning Up.

Michael Liebreich  
Before we start, if you're enjoying Cleaning Up, please make sure that you like, subscribe and leave a review, and tell all your friends about us. To make sure you never miss an episode, subscribe to us on YouTube or your favourite podcast platform and follow us on Twitter, LinkedIn or Instagram.

ML  
Over the holidays, we moved the Cleaning Up newsletter to Substack, where you can find it on mlcleaningup.substack.com, that's mlcleaningup.substack.com. And don't forget there were over 170 hours of conversations with extraordinary climate leaders on cleaningup.live, that's cleaningup.live. 

ML  
Cleaning Up is brought to you by our lead supporter, Capricorn Investment Group, as well as by the Liebreich Foundation, the Gilardini Foundation, and our newest supporter, EcoPragma Capital.

BW  
Tamsin, welcome to Cleaning Up. I'm very pleased to see you and nice to be in person. I'm going to start off by asking the obvious question, which is could you introduce yourself using your own words, and tell us a little bit about what you do and how you got here? 

Tamsin Lishman  
Yeah, so I'm Tamsin Lishman, I am the CEO of Kensa Group. And at Kensa Group our mission is to decarbonise heat at scale, using network heat pumps. So that's a white heating box and people's homes, connected to pipes in the ground that take that warmth from the ground that comes from the sun, and then boosts that to people's homes. And I would describe myself as a passionate about decarbonising heat, and a practitioner in the energy transition. 

BW  
That's wonderful. And you're newly appointed CEO. 

TL  
Yeah. 

BW  
So how long have you been in post? 

TL  
So I've been in post since October, so I think, what, four months. But it feels- inevitably, when you're doing something you love with an amazing team, it feels like I've been there for years. 

BW  
Amazing. So tell us a little bit about the path to then taking over as CEO of Kensa. What were you doing before?

TL  
So before Kensa, I worked in another heat-decarbonisation scale-up looking at industrial decarbonisation. And then before that, I did a variety of senior roles in running energy generation businesses, in the water industry, and general engineering. So my background is really a combination of strategic partnerships, how to grow businesses and commercial business models, running big complex operational businesses, and building great teams. And that's what I really love doing and solving difficult problems. 

BW  
And, so let's just dig into a bit to Kensa then. So I first came across Kensa, I think I was in the House of Lords working on an energy bill, and one of the board members mentioned it to me, and I had not heard of it. Of course, then found out about it and thought, "oh, wow, another brilliant little jewel in the british crown of energy transition companies," but I felt it had quite a low profile. But tell us themselves a little bit about where Kensa is today and what you're actually currently doing today. 

TL  
Yeah, so where Kensa is today, we've just got investment last year from Legal & General, and Octopus that helps us scale. And so our mission is to grow to 10 times our current size in the next 5 years, creating 1,500 jobs ourselves, decarbonising big chunks the UK's heat, and implementing area-by-area, street-by-street decarbonisation, where residents can sign up, have a white box of their choice fitted by their own plumber in their house with the electricity supply of their choice, pay a small standing charge to Kensa and keep the house cosy and warm, and cool in summer using ground source cooling as well. 

BW  
So let's just talk a little bit about ground source heat pumps, because heat pumps aren't that well known, and if they are known, it's mostly the air source heat pumps, the kind of refrigerant like units on the sides of houses, but the ground source that you do is a network scale. So you want to just describe it to us? 

TL  
Yes. So we do network heat pumps, which is shared borehole, so holes into the ground and then shared pipes that then connect to individual people's homes. Why do we do that? Ground source heat pumps are the most efficient, so they use 40% less electricity typically than an air source heat pump, and that means over the lifecycle of the heat pump, they usually have about 20% lower lifecycle costs. So they're better for consumers and better for the electricity grid, because they use less energy. And what they do is take that heat from the earth - so the ground is always around 10 to 15 degrees throughout the year - take that heat then into the heat pump, and the heat pump then transfers that to a gas, boosts that heat using a compressor exactly like the reverse of our fridges, and then that heat then can heat our hot water and our heating in our homes. So very simple. The technology is designed to be very simple, very robust, long lasting, and really quite boring, which is good-

BW  
But we like boring, boring is good.

TL  
-we like boring.

BW  
And, so the components are, you're drilling down to a certain depth and then you're installing a pipe that's collecting the heat from from the ground, as you say, ultimately, the ground stays a nice level temperature throughout the year. And then you're using the unit within the home to compress that and boost it up to the levels that-

TL  
That's right, a unit within the home, and again, ground source heat pumps can be in a cupboard, under the stairs, exactly where we have our boilers today.

BW  
Right, and you actually call them your shoebox don't you because they're quite compact.

TL  
So our product's called the shoebox and it is the size of a microwave, so goes in a kitchen cupboard. So very compact.

BW  
And then let's just talk about Kensa the business then. So, you're a manufacturer and a developer- a product developer and installer?

TL  
Thats' right, so we're three things: we manufacture heat pumps, we instal them at scale, and then with the support of Octopus and L&G, we fund them, so we take away that barrier which is the higher upfront cost, so we fund the ground arrays, and then we allow consumers to pay a small standing charge, exactly like they do for gas and electricity today. So we do the end-to-end the whole system. And that's actually something we think is really important, is our knowledge about: from borehole-to-radiator, how we keep homes cosy and warm and summer and cool- so again, warm in winter and cool in summer. 

BW  
Yeah, which is an added bonus, right, that the current gas boiler doesn't provide right? We all love our gas boilers, don't we really, but in the summer, they're not very useful, whereas this little white box does both. 

TL  
Yes. So this- actually it's not the white box but it's the ground array, can then also provide cooling in summer. So taking that excess heat, and cool from home, putting it in the ground, and it has the added benefit of warming the ground and then making it actually more efficient in winter. So that cooling in summer then reduces costs and winter for people. So there's a real win, win, win. 

BW  
And the other thing that I think is exciting about this is that, just in terms of energy balances- so you're taking electricity from the grid, putting one unit of electricity in for about four units of usable heat, so  it's incredibly efficient.

TL  
So incredibly efficient. And then again, we've got work that we're working on to create also then the ability to use demand side response, and more flexibility. So today there's flexibility inherently in using a heat pump, and we're looking at how can we provide over 24 hours thermal storage flexibility. So really then allowing us to optimise how we take electricity from the grid to support lowest cost of generation, lowest cost of transmission upgrades. And work we did with L&G last year showed that there's an opportunity of up to 23% lower cost of electricity transmission and generation through using ground source heat pumps. That's matched by the Department of Energy in the US who published a study saying there's an opportunity for 30% lower electricity transmission upgrade using ground source heat pumps. So really big system opportunity through that efficiency. And we imagine those cold days like we had last- we had recently, those cold days in winter everyone wants a cosy house: how do we make sure we've got the lowest demand on the electricity grid overall?

BW  
And that's where the ground really comes into its own because just below the surface, very little changes. 

TL  
Yeah, stili 10 to 15 degrees. 

BW  
Exactly. Now, it all sounds amazing, and I suppose one of the challenges that we have is that people's understanding of the efficiency gains, like at a systems level, perhaps isn't quite there, is it. And regular listeners to Michael's podcast will know that one of the things that we're competing against the moment is this idea that we might perhaps use a like-for-like fuel, so for example, hydrogen, which isn't quite a like-for-like, but- and that sort of idea that we might just reuse the gas network and put a different fuel into it does seem to be causing a bit of confusion. But unlike the heat pumps, instead of getting a big efficiency gain, you're getting an actual efficiency penalty, which is much less efficient to create the hydrogen and the natural gas. So how are we going to communicate this to people that's really clear to understand that one option is efficient and clean and the other option is, you know, actually going to add to our overall energy needs? 

TL  
And it's a great question, because I think this is it. Why are heat pumps so attractive, is because you put one unit of energy in and, for us, four units of heat out. And that's our experience actually, we've done recently 273 tower blocks in Thurrock and there, the residents have been able to drop their energy bills. Actually, they've chosen more comfort interestingly, so- but their energy bills are at the heart. So that's allowing people to have in - and this is in social housing - much more choice over how they spend their money, and more comfort. So I think, you know, this is very much: how do we communicate it? And a bit of why am I here, and what's important to us is sharing that there is- heat pumps are a solution. But also most importantly, for us, networked heat pumps, ground source, heat pumps done at scale, are a critical part of the pathway to decarbonise heat. They are a solution for street-by-street, area-by-area decarbonisation with pipes in the ground, and then allowing consumers to choose as-and-when they want to sign up or not. So again, really mirroring the gas grid today or how we heat our homes today, a white box of our choice providing hot water and heating in a cupboard that we choose, connecting to pipes in the street, funded by institutional investors, a small standing charge, and our own choice of then the electricity use we do. And that's really important to us. I think, you know, we actually are quite encouraged by what we see as the sort of the death throes of perhaps alternative heating, but there's still some way to go. And we see this opportunity about using the most efficient form of heating as really being important to get into the- make sure it's part of the toolkit of policymakers, local authorities, you know, and consumers, this is going to be an ease of switch. And again, our whole mission is how do we- through scaling, we can bring our cost base down by 60%. And so the mission, our mission, is to make it no more expensive, ideally cheaper, for consumers to heat their homes with a ground source heat pump as a gas boiler, maybe not today, but traditionally.

BW  
Yeah, and I guess at the moment, there are two barriers, one is the upfront capital, and then there's the fact that electricity generally is a bit more expensive. But, as you say, you're using a quarter of the electricity to get-

TL  
So the upfront capital, I mean this is something- there are billions of pounds of investor money ready to be deployed. And that ability to deploy institutional investors into the infrastructures, exactly like we do many things, actually, for me isn't a barrier, but more around the policy signals and the confidence in the business model. But there is no shortage of investment ready to be deployed. And certainly, you know, we've got billions of pounds ready to go. The electricity: yes, I mean, it seems in a world where we're looking to decarbonise heat and support electrification in the home, that we put increased taxes on electricity rather than gas, and so create peverse incentives. And I think, you know, it's encouraging to see the focus on that. But anything we can do to support using electricity in the most efficient way for heating clearly is a good thing.

BW  
Yeah. And just going back to the point you made about the fact that this is quite similar to how the gas networks were rolled out, right. It's an infrastructure that's invested in, and then the consumers, presumably, if you're taking the sort of average street, you need about half of them?

TL  
That's right, we would look for about half to sign up - very similar to fibre rollout - half to sign up upfront, and then we're confident that as people see their neighbour and the comfort it's providing, or their gas boilers ready to be replaced, that again, other residents will then sign up. But it isn't then- what can feel for people like that scary mandate, "you must on a date change," we really believe in the importance of consumer choice, and giving the best experience, making easier as it- easier and cheaper, that's everything. How do we make it easier and cheaper?

BW  
Yeah. And again, for those who've been following Michael's work and the work of this podcast, they'll- people may know that one kind of almost cul-de-sac the government was driving this policy down was to mandate that everyone should replace their gas boilers at a village scale with hydrogen boilers and a hydrogen network. And it made- they seem to do it all wrong, I don't know who's to blame, whether it was the local government, the government, national government, or the gas distribution companies who were given the task, but the trials that were, you know, suggested have both fallen over because of lack of public buy-in. So I guess you're learning from all of that and thinking, "how do we make sure we do it much better?"

TL  
Yeah, so Kensa's a 25 year-old company and has been installing network heat pumps - ground source heat pumps - in people's homes for over 10 years. So actually, we've got a lot of experience of, "how do we take residents and our customers through that journey of retrofitting their heating?" We have a project in Cornwall and it's called Heat the Streets, where we've done a mass retrofit of part of the village, five times oversubscribed, and again there, that's heat- pipes in the ground, funded by institutional investors, and actually, in this case, EU money, and then heat pumps. So we've actually got a lot of experience of, "how do we take people on that journey of: what's a ground source heat pump? How will it do?" and we really pride ourselves in that ongoing customer support and keeping people cosy. So this is kind of the heart of Kensa; one of our phrases: "we do the right thing, even if it's difficult," and that's sort of ongoing. So that's something- and clearly we have more to do. But that bit about, "how do we work with people to make sure that they are confident and comfortable, and that their home is going to be warm?"

BW  
So given what you just said about being 25 year-old company, why is it that no one's heard of you? I mean, honestly, you know, you've been sort of doing this great work, but you're not visible that I've seen sort of in the corridors of Westminster. Tell us a little bit about what you want to do in that respect. 

TL  
Yeah. So I mean, I think this is now- we're in this new, I call it the new phase of heat, 2024 is the year of heat. And I think we're seeing heat decarbonisation much more in the public domain and the policy domain. And this is partly, you know, what the role of me and the rest of my team is, how do we share this incredible opportunity for how do we decarbonise heat in the most efficient way, in the way that's best for consumers, so people know what we do? And again, one of my, you know, one of my areas of, you know- it's an opportunity and a threat isn't it, but the threat is no one knows about network heat pumps, they're missed, and we end up with an approach that is more expensive and less fair for consumers. And that really, you know, it drives us in a- the company is very purpose-led, and we're all very purpose-led, it really drives us to why we do it. So yes. And I think, you know, we welcome all the sorts of suggestions, how can we do more and get this on the radar of government, policymakers and consumers?

BW  
Great? Well, I think one of the things is because you're based in Cornwall, is that right?

TL  
We're based in Cornwall, although the headquarters in Cornwall, we are, at our heart, a Cornish, company, thabutt actually we're a UK company. And, you know, we're where homes are and where people live. And so that means we have a UK-wide spread, and people in Kensa, all across the UK. 

BW  
We need to see more of you I think in Whitehall and Westminster because, you know, my experience is: part of politics is just who shows up. And at the moment, there are a lot of lobbies showing up with their solutions, and I think it does- it inevitably just distorts people's awareness if, you know, all they ever hear about is hydrogen-ready boilers or whatever. So yeah, hopefully, you'll have the time to come up here more often and sell the story. 

TL  
And thank you for the tip! 

BW  
You're very welcome! So turning then to policy, right. So it is, you know, a sector which is regulated, we have a price regulator. We have government policies all over the place, you know, trying to guide capital into the right solutions. So tell me about the policies that you're watching that are going to hopefully help. 

TL  
So there are a number of really important policies for us. One of them is heat network zoning. And this is the one where we believe it's really important: network heat pumps are part of the toolkit, part of the solution is heat networks. So this is where we'll designate part of cities and towns to have heat networks. And that can be a number of different solutions-

BW  
-at a local level, city-level?

TL  
A city or area- city-level 

BW  
So this is at the local planning level?

TL  
Local planning level. Network heat pumps are the most efficient form of heat network for what we call mid-density housing. What does that mean in reality? Terraced streets, blocks of flats, the kind of three high blocks of flats. So, if we all picture those really really dense big city centres, centralised plant's best there, and we really-

BW  
Centralised plant meaning...? 

TL  
Centralised air source or some other form of centralised plant that has been- so, with then pipes carrying hot water. 

BW  
So this is just for those sort of five storeys-up kind of tower blocks.

TL  
Really dense city centre, right at the heart. So if we imagine Bristol, just that very tight inner ring, very quickly, we get into what's titled mid-density housing, terraced houses, blocks of flats, flats, that makes up about 50% of the UK's housing stock. And there, network heat pumps are more efficient, because the efficiency of the heat pumps more than, you know, is more effective than the hot water pipes, which have then the heat losses kick in. So for us, heat network zoning really important that our heat pumps are part of the toolkit and part of the solution set. 

BW  
So do you need a positive designation? Or do you just need permissive-

TL  
We just need to make sure in the- that it's part of the solution set.

BW  
And that gives you then an ability to act like a utility in terms of drilling into streets-

TL  
Drilling into streets, being able to bid into areas to be- and also for, then, decision makers to understand the relative choices and the relative benefits to consumers.

BW  
Okay. But would there be- I mean, there's a lot of local authorities to cover. Is there a national policy guideline that can help as well?

TL  
So there's a national policy guideline, there's been one that's rolled out in Scotland, it misses network heat pumps, so that's an area of concern for us at the moment. There's consultation going on across England and Wales, and this is where, for us, we really want network heat pumps to be just part of those guidelines, part of the awareness as local authorities, their advisors, there's other people doing it, that this is part of the solution set, and to be able to- So that's really important to us. Then the other things in the policy landscape that are very important: the future home standard that supports decarbonisation of heat in new build.

BW  
So this is a government policy that guides the building industry as to what they should build and what the standards the houses should reach? Okay.

TL  
Exactly, the standards they should reach. And so that supports electrification of heat in new build housing, and there, actually, we've been able to develop an offer for new build developers about ground source for them for less or the same as the cost of air source, so better for the developer, and then lower costs for the inhabitants of those houses, the end customer, because of the efficiency. So we're really excited about the opportunity in new build, that then gives us that ability to scale. And again, the system benefit that lower electricity demand then allows new build developers to unlock sites that might otherwise have issues with grid capacity.

BW  
Yes, because you're not requiring a huge new line to go in just for heating.

TL  
So those are two. Then there's the Clean Heat [Market] Mechanism, which again, is a effectively a sort of trading mechanism around where a heat pump- there's a sort of token for every heat pump sold, that people who are selling gas boilers then need to have. So that again, that supports- it makes heat pumps cheaper for consumers. 

BW  
Yes. So we're actually doing this interview in a location called Sustainable Ventures in London, just over the road from Westminster, and there are groups here who've worked on a similar policy for transport. There's Zero Emissions Vehicles, their standard as it's called, which is basically what's made it possible for investors to come in and provide electrification of transport services, whether it's the cars or the charge points. And that policy has just come into law in January of this year. And really, what my understanding of the Clean Heat [Market] Mechanism is the sort of equivalent for heat, it asks the current incumbents, who are currently happily providing customers with boilers, to diversify into clean, but they can trade, can't they. If they can't meet their quota, they trade.

TL  
And so what it means is that effectively that allows, and again, it's another way of reducing that upfront cost for people to switch to heat pumps, including ground source heat pumps.

TL  
And it, very importantly, breaks open the market in-

BW  
Breaks open the market, exactly.

BW  
Yes. Okay. But when- what's the status of that policy?

TL  
Goodness me. I feel like I need my my policy director here. I think it's in development, you know, and I think what we're seeing is now that's starting to be factored into the consumer offers, and we're really excited about that. You know, for us, anything that makes it better for consumers, cheaper, and less of a barrier to switching, is a good thing. 

BW  
Right, good.

TL  
I feel like I need to-

BW  
Well in our notes to the show, we'll find out exactly what the status that policy- because that policy does seem like the financial incentive that can make a difference. 

TL  
That's right.

BW  
Yeah. And is there anything else? 

TL  
There are some more. Then there are also, in thepublic sector space, there's the Social Housing Decarbonisation Fund and Public Sector, and those are really important about, in social housing, taking people out of fuel poverty and decarbonising heat. So an example is there's around 4,000 electrically-heated tower blocks in the UK. So these are people who use night-storage heaters. We've just seen that the cost of the electricity to those is going up. And those are, in our words, "a no-brainer" to then change to ground source heat pumps, reduce people's costs substantially. And again, what's important to Kensa is that we look at decarbonisation in the round in the most effective way. And it has traditionally seemed or been very focused on fabric. And I think, you know, we always advocate we should do the most cost-effective things and fabric's important, but then we need also to look at other solutions like network heat pumps. 

BW  
Yeah. So in a sense, what you're saying is, you know, the focus has been on the fabric of the building, the kind of- the walls, the windows, the roof, but actually the real emissions are coming from the heat source, the fuel that's being burned, and more focus on that within within the sector would-

TL  
More focus on that and looking at the most cost-effective form of decarbonisation. 

BW  
Yeah. Because actually, if you're reducing- you're basically increasing the efficiency of the actual heat provision, then it takes the emphasis off, a little bit, the fabric of the building, which we know traditionally in Britain is difficult, right? We've got all of these period homes and retrofitting has proved to be quite troublesome. 

TL  
Yes

BW  
Yeah. Can I ask you about business solutions? Because obviously, your technology is focused mostly on the 50% of homes in Britain that could benefit. But there's a lot of commercial heat and cooling, particularly. Are you focused on that?

TL  
We absolutely are. And actually yesterday, I went to see one of the projects we're doing at a period conference venue and wedding venue in Warrington. So very much an important part- and I come back to our strategy: area-by-area, that opportunity to decarbonise supermarkets, schools, office buildings, swimming pools, in an area. And there's a lovely sort of efficiency improvement where the- if we apply cooling to a supermarket, that heat then makes it more efficient, so more cost-effective for the local inhabitants nearby. So it's a really important part of our strategy. We do some important work in what we call non-domestic, including some schools, as I say, this wedding conference venue, swimming pools, fire stations, so yes, it's a really important part, again, of decarbonising heat.

BW  
And turning back to sort of your role then- because the potential for this to scale seems very high if we can get clarity -if we can get clarity that one of the routes to decarbonising heat is clearly a winner in efficiency terms and cost and comfort. So let's assume the politicians will wake up and realise that's the case and then put the policies in place. How are you going to scale your enterprise? 

TL  
So there are various parts of my role. One part is: how do we get the message out there? Then second, a second really important part is: what's that business model? It's very important to have offers that are competitive, better than the next best alternative. And so we're working again to make sure we've got really compelling offers. So we're really proud of what we've done in the new-build space and how do we continue to make that so it's the best thing for people to do. Then working my team about: how do we scale up, both our own internal, the great people we've got, but recruiting, growing, how do we move from doing 100 projects a year to 1000? And then building the partnerships in the supply chain. We're not going to do all of this ourselves. So if we think about: what's the partnership with someone who does utilities today in doing- putting pipes in the street? What's the- what are the different things? So that bit, how do we scale? And then another really important part of my role is: how do we take people on this journey and keep that- keep that purpose, that teamwork, that ambition, and that kind of entrepreneurial spirit alive?

BW  
And so, for example, you've got a manufacturing facility?

TL  
Yes. 

BW  
That's in Cornwall? 

TL  
That's in Cornwall.

BW  
But your supply chain isn't particularly complicated is it? The inputs are standard?

TL  
No. So, if we take our supply chain: so the inputs that go into our heat pumps are used in many, many different settings, including fridges, so there it's a widely available supply chain. Our factory has capability to scale, and then we can replicate our factories, it's sort of cookie cutter, we can replicate it as the market grows. The next bit of our supply chains, and when we instal them, drilling, and that is a bespoke part of ground source heat pumps. There's some very strong companies in this space, and again, that will be where we look about: how do we work together to grow? Then it's putting- digging temporary holes in the street and putting pipes in, which is a widely available skill. And then the installation. One of the things that's really great about the Kensa heat pumps as they can be installed by any competent plumber. And this started from the origin where the company was small and couldn't go- the small team couldn't drive around the whole of the UK installing them. So it's designed to be installed by any plumber without retraining. So we do a lot of work about supporting plumbers in- it's not a retraining, but just the confidence in installing those, whether it's in new build housing, individual people's houses. So again, they're in this. And we've done a back-of-the-envelope calculation that roughly 98 pence in every pound spent on a Kensa ground source heat pump will be recycled within the UK economy. So that green skills - green jobs multiplier - and the just transition I think is really important. 

BW  
Yeah. So you've touched on something there, which is really interesting. Kensa has all the hallmarks to me of a classically, engineering-lead, brilliant little company. I don't mean for that to sound patronising, but it has huge potential to scale, but facing some fairly stiff headwinds, because you've got an incumbency who are currently very happy providing people with gas into their homes, and the challenge is to sort of get you noticed. And then also, I guess, find the right partnerships. And tell me a little bit about how the Octopus and Legal & General partnership came about, because they're quite, well, certainly Octopus is a new entrant, which is always exciting.

TL  
So Legal and General first invested in Kensa in 2020, and then have invested more in the latest funding round. And it's a very good-

BW  
And for non-UK listeners, Legal & General is an insurance-

TL  
It's an insurance company who also have their own Legal & General Capital, where they invest in things like affordable build-to-rent and various parts of the housing market and energy transition, but very much around decarbonisation and affordable homes.

BW  
So aligned with their mission.

TL  
Very much aligned with their mission. So with them, near that first investment and then investing more, again, being able to work closely in partnership, we've installed ground source heat pumps in one of their company's-inspired villages, who've launched the first net zero retirement village. And you know, again, that opportunity to work together- and if I take that sort of lovely example of, you know, when you get real partnerships, you look at: where's the value creation together? How do we unlock that issue on grid capacity constraints? How can we optimise where maybe solar PV and the ground source heat pump and look for that mutual- rather than maybe a more traditional client can, you know, client-contractor relationship? So that's Legal & General, and then Octopus came in last year and bring in, as well as the investment, that deep expertise into the consumer, the energy transition, and lots of opportunity, again, for us to work together on: how do we create that consumer offer, but also create value from flexibilit?. So we're veru, very excited about our- you know, that partnership that brings more than money.

BW  
Well, it's interesting because, you know, Octopus are new entrants onto the scene, and that have been incredibly successful at establishing themselves. But you know, I know that they've been looking deeply into air source. But it was- I was really encouraged when I heard that they now also are diversifying into the ground source, because they're super focused - laser-focused on customers, and what they want to be able to offer is the best service to the customer. So, the fact that they've recognised this now is, I think, a really good feather in your cap. Yeah, well hopefully, that partnership will lead to great things as well. And then so talking then a little bit outside of the UK-

TL  
Yes. 

BW  
Are these sorts of systems in place in other countries? 

TL  
So it's really interesting; they're starting to really be recognised. So if we look at the USA, is now- national grid in Massachusetts are starting a first pilot of 4 geothermal loops, and that recognition around: there needs to be something different to gas and what looks and feels like gas.

BW  
And is the geothermal loop- is the same -just a different phrase.

TL  
Good catch. Yeah. Same as a network heat pump, just the the American phrase-

BW  
Way of saying it, okay. 

TL  
So they're also in New York. So starting to be in the US, recognising there is a need to decarbonise homes-

BW
And provide cooling, I mean very important in the US 

TL  
-and provide cooling in the most efficient and consumer acceptable way. Same in France, where we're seeing quite strong momentum. And then we're getting a lot of interest from areas that had been more traditional district heating, who realised they've hit the limits of what district heating is effective, and then recognise this as the answer to, you know, the gap between air source heat pumps and district heating. So I think, you know, network heat pumps, or geothermal loops are not yet on the global radar. But we're seeing all of those early signs about the recognition about we've got a housing - or a building - stock we need to decarbonise and we're looking for a solution to fit that. And network heat pumps are the answer.

BW  
So really, you know, UK is your focus, but there's nothing to stop your manufacturing business scaling out into the market.

TL  
I mean, so- and that manufacturing business, actually, that expertise, we're the expert in that borehole to radiator. And that is- gives us I think, something really important around: we can provide confidence and comfort to the home. So that system expertise is also really important to us, as well as the manufacturing.

BW  
Very good. And you've got an engineering background, haven't you? Which is why you're able to speak so eloquently about this topic.

TL  
I do. So I am an engineer and- although I describe myself as: I know enough to be dangerous, but not enough to be useful. So I tell my team, "you don't want me designing, you certainly don't want me installing heat pumps." But I think that ability to understand the engineering behind it, energy systems, but then also bring the partnership and the business and commercial and put it together. And that's what makes it such an incredible company and such an incredible role. 

BW  
Well, and that's what makes you perfect for this, this new phase, I think. So Tamsin, tell me a little bit about what it's like to be a female leader in this space, because energy is quite traditionally dominated by our male colleagues. 

TL  
Yes. So, I mean, first I have to say I think of myself as a leader rather than a female leader. But then when you prompt me and I think about it, a couple of things. So when I was 10, I wrote in my primary six - so a sort of what I wanted to be - I wanted to be a leader of an engineering business in the future- 

BW  
Wow! 

TL  
-along with- you know, along with, "I like lasagna and didn't like my brother," you know that- 

BW  
Yeah.

TL  
Yeah, so quite unusual. And then at university, I was encouraged at school to study engineering, which if we think about the north of Scotland in the 1990s, is pretty unusual. And then, again, you know, I was always interested in how businesses worked, how to things got done, you know, just always was volunteering for additional things, but also then was given a number of really critical- where people gave me quite stretching roles.

BW  
But when you went to university, did you study engineering? 

TL  
I studied engineering.

BW  
And were you the only woman on the course? Or how, what was the balance?

TL  
No. So on the course of time, I think it was about 20% women. I was mates -I mean I made great friends across engineering, but one in particular, a really close friend where we kind of spurred each other on and encouraged and supported each other. So that was very important to both of us at the time, we used to try and catch each other out about how you know, engineering exam questions So engineering- so I think I've always been used to being you know, one of the minority, quite often the only woman in the room. At one point, I realised I'd stopped noticing it. Things that have been important to me actually recognising it's okay to be a woman, the importance of networks sponsorship, and actually, that we can bring- often, you know, have a particular style that may be different that actually can bring the best out of- I don't need to know allthe answers, but I do like to set, you know, create brilliant teams who do things we never thought we could do.

BW  
And you mentioned sponsorship there. So, did you have female mentors or female other leaders that you- 

TL  
Yes, and I think, you know, that's something that, as I came up through my career, there weren't very many female leaders. And actually, one of the people in my network now is one of my old bosses Heidi Mottram, who's a CEO, and I phone Heidi and say, "Heidi, you know, can I-" I've got this phrase, I go, 'what would Heidi do?' You used to have this 'what would Madonna do?' during the 90s. What would Heidi do? So I do think that's really important, and I probably didn't have so many of those role models as I came through my career. I think it's very important for people to have role models. But I did have some very great sponsors, who gave me opportunities to move into frontline roles. I came back from maternity leave and the CEO of the business I worked for gave me- I took on a role running a really big operation. So again, that willingness of people to take, you know, informed risks and give those roles. And I think there are some things for any women listening about the importance of operational roles, and P&L roles, and finding opportunities to get those skills. You know, those have been absolutely critical for me to have the skills to do the job I do today. 

BW  
Yeah. And so in Kensa, then, is it- you know, engineering companies tend to be slightly weighted- but have you got sort of female leaders that you're nurturing?

TL  
Absolutely, absolutely. And we had Women in Science and Engineering Day recently. Actually, we've got- it's about a third of the company's women. Now we've got more to do and we absolutely want to nurture women and people from, you know, all kinds of different- to maximise cognitive diversity. But that was, you know- I think there's something, again, about the culture of the company, about the authentic leadership, has allowed women to thrive and develop within the company It's a credit to my male counterparts for that.

BW  
Yeah, and this is in no way at all criticism- it's just about the balance, isn't it, and the fact that, as you say, the diversity. Because often, you know, at a household level, often it's perhaps the woman who's actually doing the budgeting or making these important decisions. But they perhaps defer, you know, don't don't consider energy as something they should think about. But, you know, having a female leader in this space, I think, actually does help kind of the profile of this issue kind of reach the important decision makers that are out there. 

TL  
Yeah, absolutely

BW  
And then, finally, just- when we're sort of thinking about what people- you know, we've got a broad listenership to this podcast, and I'm just- what are the messages that you'd most like to convey about the sort of next 12 months in Kensa's journey? 

TL  
Well, as you say the most important message for someone to commit at the moment is a world of decarbonising heat without network heat pumps is going to be more expensive and less fair for consumers. And so that importance of getting network heat pumps on the radar of government policymakers is really important. The next thing that's really important for us is then: how do we scale with these opportunities, as we're looking at more of electrification of heat? And finally is honing our business models. But I think it really is that first one: a world of decarbonisation of heat without network heat pumps is more expensive and less fair for consumers. So that's the sort of- if I could- my t-shirt logo-

BW  
Or the positive, which is: it's cheaper and warmer, you know, or-

TL  
Cheaper and fairer. 

BW  
Yeah, exactly. And are there places- so, you know, people- I hope people listening to this are, you know, persuaded by the physics and the economics, but actually seeing something in action is sometimes the thing that tips people into, "oh, right now, you know, I can see this." So if people want to do visits, or they want to see examples of your projects-

TL  
Yes, I mean, we have projects all across the UK, we've got a number of great case studies on our website, whether it's for instance, Stithians' Heat the Streets where it is, you know- this is this is decarbonise- the pilot of mass decarbonisation, tower blocks in Thurrock, fire stations in Northumberland, housing in Scotland, so a range of things across the UK. Now, the other is going to be very boring for people to come and see a project that was done because everything's beneath the ground, and there's a white box in a cupboard providing efficient, reliable heat. But yes, many opportunities

BW  
But that's- as we said at the start-

TL  
That's exactly what we want. 

BW  
-boring is good.

TL  
Boring is good.

BW  
Yeah. Excellent. And obviously there's a play-on-words there because boreing, as in going into the ground, is also what you do. And- is that actually the, thinking about possible constraints, is there a bit of a kind of bottleneck with regard to the actual drilling? Because these are relatively big kit- pieces of kit aren't they? 

TL  
Yes. So the drilling: there is, I mean today, there's more capacity than demand in the UK. As we scale massively, this is an area we're really looking at about: how do we support the drilling industry to scale? The drill rigs range in size but, I mean, if we think about them as like our, kind of, sort of big SUV-size.

BW  
Oh okay.

TL  
So they can come into- the one I saw yesterday, come into a street, not too disruptive. So they're not kind of what we think of as sort of, you know, US fracking drill rig-scale. 

BW  
Okay, and that will do average size- you just need one of these vehicles to do the two big drills down. 

TL  
So this is it, so it's one drill round, size of a dinner plate that goes down 200 to 300 metres- 

BW  
Okay. 

TL  
And, you know, it is the size of a dinner plate. 

BW  
So hopefully, this is a street scene that will become more common, right, that instead of the sort of- you know, we're all used to this sort of, you know, digging up the tarmac and the laying of fibre optics, but hopefully over time, more and more communities are going to get excited about the idea that they're sort of drilling into the latent heat and cooling that's there under their feet. And then it's helping them have a warmer lifestyle, cooler lifestyle, and save money on bills. 

TL  
And savemoney on bills, and a reliable heating source in the depths of winter. 

BW  
And so smart entrepreneurs should be thinking about those service providers and maybe boosting the capacity into those drilling companies and service providers. Excellent. Well, Tamsin, it's been a real pleasure meeting you. Thanks for coming into London. I hope we'll see you in London a lot more, in your new capacity of raising the flag for this really important technology. Really delighted to meet you and looking forward to hearing of the future exploits of Kensa and all your partners. 

TL  
Thank you. 

BW  
Thank you. 

BW  
So that was Tamsin Lishman. To me, Kensa's solution offers some pretty fundamental advantages over others being promoted: it's inherently super efficient, helping to reduce rather than increase our overall energy demand, it carries no risk of dangerous explosions and health impacts from combustion gases, and by signing up half the customers on the street, allowing others to join when ready, you get an economy of scale without forcing change on people who are not yet ready. What's not to like?! As ever, we'll provide relevant links in the show notes, and the YouTube channel will provide some visual illustrations of what we talked about. But as Tamsin said, it's kind of boring. But that's probably exactly what we need: more boring boreing to tap into the free heat under our feet. And just for disclosure, last year, EcoPragma Capital, of which Michael is Co-Managing Partner, helped Kensa to raise £70 million from investors. Thanks to Kensa's Tomas Roberto, and Richard Warren for the help in setting things up, to Eliza Teson and Zak Cebon for their production support. And thanks to you for listening. 

ML  
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