Christmas arrived early today for Octopus Energy Group, as Britain’s fast-growing generator-retailer commanding nearly 6% of domestic power accounts welcomed a $300 million equity injection from Toronto-based public sector pension providers Canada Pension Plan Investment Board (CPP).
Designated in US not Canadian dollars, the equity stake is stressed by both parties as an ‘initial commitment’.
More looks set to follow, then, as both parties stressed their ”aspiration to grow the level of committed capital over time to support Octopus”.
Global expansion by the UK firm, not least of its Kraken transactional and intelligence platform, is the objective of today’s maple-leafed mega-sweetener. Developed inhouse, Kraken earns licencing fees already from competitors including EDF, E.On and Good Energy in the UK, and Australia’s Origin Energy.
Today’s injection by CPP raises the value of privately held Octopus Energy Group to around US$ 5 Billion, the parties calculate.
Humungous injections of US greenbacks may be becoming commonplace for Octopus founders Greg Jackson, brother and finance director Stuart Jackson and James Eddison. Three months ago, ex-US-vice president Al Gore’s Generation Investment fund bought 13% of the group, pumping in the even larger US equivalent of £ 483 million.
The group has a quoted investment and development arm, Octopus Renewables Investment Trust ( ORIT )
The five year old vertically integrated supplier now serves 3.1 million British accounts. It generates enough renewable power, it claims, to furnish directly two million of them. In direct energy sales, this year alone Octopus has expanded into Spain and Italy, adding to existing operations in Germany, U.S.A., Japan and New Zealand.
Jackson – “hotter than a pepper sprout”
Joining climate campaigners Greenpeace at the age of 16, Octopus founder and serial entrepreneur Greg Jackson, now 50, began his working life as a video games programmer, while hankering to be a cycle courier, ideally riding an electric bike.
Despite employing 1,200 staff, the group has neither an IT nor an HR department. Jackson rejects both as ‘bureaucratic’, and says he trusts his staff to resolve internal disputes themselves.
“Make no mistake, this partnership is huge,” Octopus Energy’s group CEO told the world today.
“Octopus has pioneered the technology that allows citizens to benefit from cheaper energy as it gets greener”, Jackson went on.
“Innovating new ways to accelerate investment into the renewable energy revolution is vital to delivering governments’ net zero goals. The CPP Investments-Octopus partnership is globally significant, paving the way to billions of dollars of investment in the UK and globally.
Besides Kraken, today’s injection is intended to put wind behind Octopus Energy’s Fan Club. Currently operating in Caerphilly and Market Weighton, Yorkshire, Octopus claims this as the UK’s first renewables tariff that gives neighbours of specific wind turbines cheaper power when the blades are spinning at least 80% of the time. Thirty more turbines for the Fan Club are planned, according to today’s announcement.
Canada’s public sector pension funds have been big investors in UK energy. Ontario’s Teachers’ Pension Plan in August completed a deal to up its stake in Scotia Gas Networks to 37.5%. The deal was controversial, given OTPP’s commitment to reach Net Zero across its portfolio by 2050.