From nothing to everything, in less than a decade. Octopus Energy was born in the summer of 2015 as another tentacle of the eponymous group to take on the big six, the electricity companies that had been fighting over the British market since its liberalisation in the nineties. Today, the pink octopus company has passed them all on the left, breaking that balance into a thousand and one pieces: at the end of 2023 it became the largest electricity supplier on the islands, with almost seven million customers. It has 22% of the total, several bodies ahead of giants such as British Gas, E.ON, OVO, EDF or Scottish Power (Iberdrola). This meteoric growth – in 2017 it had barely 100,000 customers; in 2019 it crossed the barrier of one million, all of them in the United Kingdom – has given it the credentials and muscle necessary to go abroad with the same airs with which it has devoured the local market. An internationalisation that has already allowed it to exceed 7.7 million customers in 18 countries on four continents. And that has led it to go live in Spain, where it has set the goal of reaching two million domestic customers by 2027. If it achieves this, it would become – with current figures in hand – the fourth operator, hot on the heels of Naturgy. The challenge is huge: two years after its arrival it has barely 140,000 contracts. «In France, Italy, Germany, Japan or Spain we are growing as fast as we did in the United Kingdom. And we continue to open new markets,» says the founder and CEO of Octopus Energy, Greg Jackson, in conversation with EL PAÍS during a recent visit to Madrid. In the Spanish case, with four priorities in mind: grow in marketing; get more people to install solar panels, aerothermal energy and batteries at home, and buy more electric cars; grow in generation; and that Spanish electricity companies “understand the benefits” of Kraken, their own technological platform, which already covers —according to their figures— half of the British market. Octopus Energy closed the last financial year in the green for the first time in its history: 283 million pounds sterling (335 million euros) with which it left behind the almost 166 million lost in the previous 12 months. Not listed, its valuation is now around 8.5 billion euros. From Spain, Jackson, with a casual t-shirt and attitude more typical of a Silicon Valley entrepreneur than the head of the largest British electricity company, is attracted above all by the cruising speed that renewables have taken. Also that, in contrast to the ideal of matching demand to the hours in which renewables generate the most, many consumers still do not make their consumption more flexible in order to save a few euros and, also, a few kilos of carbon dioxide (CO2) in the atmosphere. “What we want is for them to also benefit from green energy: with the bargains we already offer in other markets during sunny and/or windy hours, we are already managing to reduce their bills. We send messages to our customers to tell them: today electricity is free between noon and three in the afternoon. Charge your cars, bake… Take advantage. Or, on the contrary: tonight electricity is going to be very expensive; we will pay you if you consume less. Batteries are and will be necessary, but first we have to bring as much consumption as possible to those time slots.” Until recently, he adds, “being green always meant assuming a higher cost.” Not anymore: “Now it is exactly the opposite: renewable energy is not only the cheapest, but it is becoming cheaper and cheaper every year.”
Cost in free fall
The cost of generating solar energy, he recalls, is today —on average— 10 times lower than in 2012. “But for people to benefit, consumption needs to be shifted to sunny or windy hours and days.” Four of its seven million customers in the United Kingdom already have meters that allow this flexibility. “And, of these, two million are adapting their consumption to the production at any given time.” On the islands, Octopus also works directly with the builders of new-build homes designed to not pay a single electricity bill, thanks to the combination of solar panels, aerothermal energy and batteries. “And the reality is that we earn more money with these houses than with those that are powered solely by the grid.” The company attributes much of the success achieved in the United Kingdom to Kraken, the technological platform that Octopus itself has developed, and with which it boasts of improving the efficiency of the supply and demand of electricity. In addition to its own customers, Octopus serves another 54 million of its most direct competitors – EDF, E.ON, Good Energy and Origin, among others – in 17 countries. And it controls 40% of the batteries that help to stabilize the British electricity system. Although most of its growth is organic, in its constant quest to gain size, Octopus has also pulled out its chequebook without hesitation. At the end of 2022, the year marked from start to finish by the energy crisis, it took over the also British company Bulb, taking advantage of its sudden fall from grace. It thus added 1.5 million customers in one fell swoop. Not even 12 months later, it closed the purchase of the Shell oil company’s electricity retailer, with which it added another 1.4 million supply points and 300,000 in Germany. Octopus started out as a pure retailer, but entered generation four years ago – even before the energy crisis – and is already in that segment in 15 markets, where it has generation assets valued at 6.5 billion euros. “Our goal is to increasingly approximate the volumes sold and generated by us.” It also favors those who live near one of its solar or wind farms, with lower prices than for the rest. “With this policy we have managed to get 22,000 communities to contact us at a time when some prefer to live far from renewable installations, asking to be close and benefit from cheaper electricity.” In this way, the company manages to reduce the cost of transporting energy. Octopus, like the rest of the large electricity companies, sees a huge opportunity in the electric car. And here, he says, Europe is moving with a worrying delay. “We have hardly any companies dedicated entirely to electric cars. In the US they have Tesla, Rivian, Lucid… In China, BYD, which is already the largest manufacturer in the world. Here, meanwhile, we are just waiting for the incumbents to transform themselves. And the reality is that it is not being easy for them,” he warns. “There is a real risk of being left behind: we have to go much faster than we are going.” However, he says, reality will end up imposing its law: “Electric cars are seven times cheaper to use and soon they will also be cheaper at the time of purchase.” Follow all the information on Economy and Business on Facebook and Twitter. Xor in our weekly newsletter