Mitsubishi Corporation has acquired a 20% stake in UK independent energy supplier Ovo. The Japanese conglomerate will pay £216m.
Ovo said it will use the money to expand overseas, primarily Europe, Australia and Japan, and continue its push into electric vehicles, smart charging and vehicle to grid (V2G) services, where vehicles and storage infrastructure are used to help balance the grid. It will also develop smart home services via the new Kaluza division.
The investment is well timed for the company.
Ovo has 1.5m customers, swelled recently by 500,000 after taking on those of failed competitors.
Being appointed supplier of last resort by Ofgem may help Ovo curb the significant costs of acquisition that ordinarily contribute to making new customers loss leaders for up to two years, according to its 2017 annual report.
Most recently filed group accounts show it turned a profit for the full year 2017, but was carrying some £250m in total liabilities.
Ovo was founded ten years ago by Stephen Fitzpatrick. In a statement on Mitsubishi’s involvement, he said:
“Transitioning away from fossil fuels is the biggest challenge we face in the 21st Century. The costs of EVs, battery storage and wind and solar power have fallen dramatically in recent years, but it’s becoming increasingly complex to integrate them onto the grid. To succeed, we will need to develop new technology and redesign the energy system around the customer. We want to be at the forefront of that global, tech-enabled transition to a zero carbon energy system. This investment from Mitsubishi Corporation will help us get there.”
Katsuya Nakanishi, Mitsubishi’s incoming executive vice president, group CEO of Power Solution Group, stated:
“Ovo’s business model, long-term vision for the energy sector and culture align well with our own. They are precisely the sort of technology driven and innovative firm we have been looking for in order to strengthen the downstream business in the energy sector.”
He added that Mitsubishi was “uniquely placed” to help Ovo expand domestically and internationally, as well as help build its technology capabilities.