Octopus Energy Boosts Generation Capability With Renewables Buy
(Bloomberg) -- Octopus Energy Group has acquired a 2.8 gigawatt-portfolio of renewables assets spread across Europe worth 3.4 billion pounds ($4.7 billion) that will boost the U.K. energy supplier’s expansion into power generation.
Octopus Energy is a relative newcomer to the U.K. energy market and this acquisition aligns its business with much larger international suppliers such as EON SE and Electricite de France SA that combine renewable generation with customer supply.
The assets are mostly wind and solar installations in Britain, Ireland, France, Finland, Sweden and Spain. Last year the portfolio generated enough to supply 1.2 million homes, according to a statement published Friday. Octopus Energy declined to say how much it paid for the assets acquired from its biggest shareholder Octopus Group.
Octopus Energy is now Britain’s fifth-largest energy supplier and attributes some of its growth to its Kraken Technologies unit that helps automate processes such as customer service and power trading. Kraken will bring down costs within the company’s generation portfolio.
“We can bring our tech mindset to that because if you can create efficiencies, all along that chain and get it to the end customer, then you’re driving down the cost of energy,” Zoisa North-Bond, chief executive officer of Octopus Energy Generation, said in an interview.
Octopus guarantees its customers a supply of green electricity. That’s currently not possible using the nation’s grid system where natural gas-fired power meets 40% of demand. The company fulfills its obligation through contracts with green producers and by buying renewable energy certificates to cover the electricity customers use.
The renewables portfolio was previously held by a separate company called Octopus Renewables, a fund managing green energy assets. From June, Octopus Energy will oversee the portfolio under a new arm to the supply business called Octopus Energy Generation.
The move follows an announcement in December of the purchase of two wind turbines to supply Octopus Energy customers with Britain’s first electricity tariff linked to wind generation. By 2027, the company’s goal is to supply and generate enough energy to power more than 50 million homes globally.
Octopus Starts U.K.’s First Tariff Linked To Wind Energy
While the two wind turbines directly supply Octopus Energy customers, only 250 megawatts of the acquired portfolio is contracted directly to the utility, according to North-Bond. Octopus Energy would like to increase that supply to its customers.
The company said it reached a $2 billion valuation at the end of last year following its second large-scale investment round. As well as Britain, it has operations in the U.S., Germany, New Zealand, Australia, and Japan.
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