30th April 2020
Octopus Receives Investment From Origin To Power Its Global Clean Energy Expansion
Greg Jackson, Founder
In 1929, Russian scientist Konstantin Tsiolkovsky proposed the concept of a multi-stage rocket. He knew that the best way to make a rocket fast enough to escape the pull of gravity was to launch it from another rocket.
I’ve always been inspired by this thought. Many businesses try audacious goals, but gravity usually wins out.
Which is why I’m over the moon to announce Stage 2 of Octopus Energy’s mission to make the green energy transition cleaner and cheaper.
Stage 1 of our journey has been powered entirely by our eponymous backers, Octopus Group (who remain majority shareholder). This has propelled us to 1.5m domestic customers in the UK across Octopus Energy, M&S Energy, Affect Energy, London Power, Co-op Energy and Tesla Power, over 12,000 business customers on innovative proprietary energy solutions with Octopus Energy Business, including Arsenal and the National Space Centre. Octopus Electric Vehicles helping make clean transport cheaper and easier, and Octopus Energy Services bringing smart products to thousands of homes.
All driven by our globally leading technology platform, Kraken, which enables our operating model to deliver the best service in energy (according to Which? and plenty of others), put us at the vanguard of making energy cheaper (we were a major proponent of the energy price cap) and greener (we are the energy supplier doing most to make a renewables-powered smart grid a reality).
Our ambitions have always been bold. We are aiming for 100 million customers worldwide on our platform. Stage 2 of our rocket ship will help drive that growth, and the prospect of supporting this attracted potential investors from around the world.
We’re now delighted to announce that we’ve selected Origin Energy - Australia’s largest energy company as our partner in this continuing mission.
The deal will see well over £300m of new funds injected into the business over the next three years, with most of it in the first year.
This will help power our growth into new markets, build more tech to make energy greener, and increase our investment in service and growth in our existing markets (the UK and Germany).
I’m particularly excited that it will help us invest millions of pounds in creating The Future Energy Research Centre, bringing together climate experts, data scientists, economists and policy specialists to devise plans and models to make net zero faster and more affordable. Octopus Energy will freely contribute our data and technology expertise to give these experts unique insight into how customers, networks and grids can contribute to a faster, more affordable transition to renewables.
We chose Origin after speaking to dozens of potential investors because, more than anyone else, they understood our mission to use technology to improve service, drive down costs and make energy greener. Indeed, as part of this partnership, Origin will themselves license our Kraken platform, to make their Australian business even more efficient, improve customer experience and support their renewables expansion.
Speaking of which, I’m sure some people will question our choice of a partner with some serious fossil-fuel operations. Origin owns a large coal-fired power station, and also exports Liquid Natural Gas.
What we found in our conversations in Europe, Asia, North America and Australia was that almost every potential investor with deep enough pockets had some interest in fossil fuels. Even financial investors, like pension funds, usually had stakes in traditional energy companies, and others get their funds from oil and other sources. So I personally spoke to senior managers of each company we got into serious discussions with to understand their plans in this area.
With some potential investors, I was disappointed that whilst there were many great people who wanted to make the world cleaner, at senior levels, some saw a relationship with us as an avenue to expanding their fossil fuel operations. Others I think saw us as potential greenwash to invest in a ‘renewables’ business. Others loved what we’d done but wanted to divert us to profit rather than growth.
Origin were not only excited to back our ambitions, but refreshingly upfront that they need to become greener. It’s in their mission statement (but there again, it seems to be in everyone’s) - but the steps they had already taken were encouraging -
- Australia's largest buyer of utility scale solar and installed over 1m solar panels on rooftops
- Over the last 4 years it has doubled its proportion of generation from renewable sources to deliver its aim of 25% of capacity to be renewable by the end of 2020. It now has more than 7,000 MW of owned and contracted generation capacity including 1,200 MW of wind and solar energy.
- Origin are also principle sponsors of Australia’s largest clean tech start up accelerator, Energy Lab
- Committing to closing their coal-fired power station (currently scheduled for 2030s, as it’s a critical part of Australia’s energy infrastructure, although I hope this could come sooner as our technology makes renewable energy more able to replace fossil fuels)
And their public statement about the partnership with us:
“We have been on a path to make energy easier and simpler for customers, to transform our retail business by putting customers at the heart, and to accelerate the rollout of cleaner and smarter energy solutions. By partnering with Octopus and deploying its technology platform, we can fast-track our ambitions and achieve better outcomes for our customers, people and shareholders.”
It was easy to see how we could be part of speeding up the move to more renewables in Australia. And nothing brought home the importance of that more than visiting them during the bushfires. As the sky over Sydney glowed orange, and you had to flick ash off your shoulders as the caustic air stung your throat, there was a real sense that something had to change - and I’m very pleased that Octopus are going to be part of that.
Moreover, Origin were happy in our discussions to leave Octopus Energy with the freedom to pursue our green energy mission globally, with no restrictions. They will appoint a director to sit on our board, but the day to day management and senior team of Octopus Energy will not change. But we’ll have more resources and access to more expertise.
Perhaps most importantly, this next stage will give the whole of our team the opportunity to put their skills and dedication to work at a bigger scale. Whilst I’m proud and privileged to lead the company, this rocket is the work of hundreds of people.
When I meet new starters, most tell me they joined Octopus because they want to tackle climate change. Many tell me they’re here to fight for social justice - fairer energy costs here in the UK and other developed economies, and over time the opportunity to democratise clean energy globally. They’re proud of the technology they build - and the interest it’s attracted from around the world. Delivering outstanding customer service is in their DNA, and proving that clean energy can be cheaper, better energy is at the heart of what we do.
This will not change. Indeed, it will be strengthened. And we’re so excited to get on with it.
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