Octopus Eyes Japan’s Power Market with Tokyo Gas Joint Venture
(Bloomberg) -- Octopus Energy Ltd., the U.K. green power provider, is expanding in Japan as it joins other European utilities seeking a foothold in the budding Asian electricity market.
In a partnership with Tokyo Gas, Octopus will provide 100% renewable electricity to consumers as Prime Minister Yoshihide Suga targets net-zero emissions by 2050, it said in a statement. Renewables only accounted for 19% of Japan’s energy mix in 2019, compared with 38% in the U.K., Octopus said.
“The key is finding the right partner with local experience and expertise,” said Greg Jackson, Octopus Energy’s chief executive officer and founder. “Since customers got to choose an energy supplier a couple of years ago, it’s increasingly looking like the same characteristics as the markets in the U.K., Europe and Australasia.”
Energy companies from Royal Dutch Shell Plc to German utility RWE AG have set their sights on the growing electricity market in the world’s third-biggest economy, which is taking shape similarly to the way European trading did 20 years ago.
The new retail venture, TG Octopus Energy, will launch in 2021. Tokyo Gas will also take a 9.7% equity share in Octopus Energy for $200 million, while Sydney-based Origin Energy Ltd. will invest an additional $50 million to maintain its 20% stake. The investments bring Octopus Energy’s valuation to $2.1 billion, the company said.
Octopus Energy started in the U.K. in 2016 and is majority owned by the London investment group Octopus Capital Ltd. The company has won about 1.7 million customers in the U.K., and is among a small group of start ups that are challenging the dominance of traditional utilities.
The Japan move follows forays into the U.S., German and Australian power markets.
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