Big thinking is required to enter an industry somewhat controlled by not one but five, formerly six, existing heavyweights. What needed to come together to make it happen and in what order?
Octopus Energy was founded with a vision to bring cheaper, greener power to all. We wanted to disrupt an industry that we felt was bloated and inefficient, where consumers felt ripped off and they desperately needed revolution to green energy, a critical step in the fight against climate change, was floundering. Our founders came from an ecommerce background and had seen time and time again how innovative technology could transform sectors, and we were certain that they could do the same in energy with a relentless focus on customer, and innovation. So we set out with a vision, and a tech heritage, an incredibly committed, passionate team, and a supportive financial backer - and the rest is, as they say, history.
What is so different about your business model and customer proposition(s) when a number of other "challenger" energy companies have collapsed by the wayside?
We're a pioneer in entech. Our proprietary technology platform Kraken is a cutting-edge global platform for energy businesses. It delivers groundbreaking operating efficiency and customer service today, but also enables the smart grid capabilities required for a low cost transition to a green energy system.
It consistently delivers the lowest cost to serve (by a mile) than any other energy company and also unlocks revolutionary smart tariffs which are bringing the future of the global renewable energy system here today.
Is Octopus involved in sustainable energy projects at ground level, not just as a purchaser of renewable energy?
Yes, absolutely. We think about green energy from generation to customer. We have contracts with over 100 independent renewable generators through our Community Power scheme - small numbers at the moment but growing all the time, and part of our commitment to create more renewable energy infrastructure across the UK. One of the more recent ones is Ripple, a project that allows anybody to invest in Graig Fatha wind farm in the heart of South Wales. Essentially, Ripple crowdfunded investors to get the money to build it, and those investors will get the same amount back as renewable energy to power their homes.
We've also got super green heritage - our original and still our biggest investors, Octopus Renewables, are the largest commercial investors in solar generation in Europe, and a leading investor in onshore wind, with over £3bn committed globally.
How is the company's expansion into electric vehicles going?
Electrification of transport is a critical part of our journey and, apart from the actual manufacturing of the cars, we're involved in all aspects that accelerate their adoption. Our Octopus Electric Vehicles arm is an expert in leasing electric vehicles; we also provide electricity to most of the national charge point providers; and we install them in homes and businesses through our engineering arm. But through that work, we realised there was a problem. Currently charging your EV when you're out and about is a hassle. Sometimes it feels like you have to download an app for every chargepoint you visit. We wanted to disrupt that, and so recently launched the Electric Juice Network to turn out-of-home charging on its head. The EJ network lets you easily charge your EV on charge points across the UK without the hassle - you don't have to mess about with lots of different cards or apps, wherever you charge, we just charge it back to your Octopus Energy bill. So whether you're using power at home, or out and about, it's billed to the same place. We've got hundreds of charge points involved already, including the awesomely innovative and brand new chargers in lampposts (which we believe could unlock charging capability on every street), and we're adding new charge point partners all the time.
From zero to 1.4 million energy customers at the start of 2020, in five years is remarkable. Was that level of scalability planned in as a possibility?
It's really funny actually, our initial business plan felt like a target of 600,000 UK customers by 2021 was a stretch... but we realised some time ago that we had massively underestimated the demand for the green energy revolution, and we threw away the targets. Now, with 1.5 million customers across our brand in the UK, and over 17 million energy accounts moving onto our Kraken platform via our licensing deals with Origin Energy, E.ON and others, we are fully intending to reach 100 million customers globally in the next ten years.
How is that level of expansion controlled?
Our tech is cloud-based, and AWS deployed, and our innovative working model means that as we get bigger, it gets more efficient. It works hand in hand with our operating model - all our customer-facing team are ‘universal agents', fully trained on every aspect of a customer's account. We aim for 95% first time fix from the first point of contact because of this level of skill - customers don't get passed around. We also have an innovative way of scaling that customer team - all customers are assigned to a particular team when they join us and will always be looked after by that one team. When that team is performing exceptionally, we split the team, like a biological cell. Experienced members leave to form their own team, new joiners are fed in to bolster the old team, and to grow the new team. It means our people can have rapid progression, purely based on merit, and we are constantly recruiting as the business grows. The fact that we are the only energy supplier to be Which? recommended for three years in a row, as we scaled from 0 to over 1 million customers, shows that the model works.
Does the big thinking extend beyond these shores?
Yes - our 100 million target is global. We're active in Germany and Australia right now and are targeting 6-10 new countries in the next two years.
Can the next five years be anywhere near as successful as the last five?
If 2020 is anything to go by, anything is possible. We were so proud that even during the disruption of Covid-19, we worked with one of Australia's biggest energy companies, Origin Energy, to ink a deal for significant additional investment that saw us recognised as one of the only UK tech unicorns (privately owned businesses worth over £1 billion). We'll be using that investment to supercharge our expansion abroad, and start up the first Future Energy Research Centre, to bring together scientists, engineers and activists to see how we can change the energy system for the good of our planet, before it's too late to do so.
