UK-based energy retailer Octopus Energy plans to expand into the Middle East, potentially setting up a technology centre in the region, its chief executive Greg Jackson has said.
The company, which recently closed its acquisition of Bulb, has been an outlier in a market where high gas prices have pressured margins of peers.
“I am seeing the Middle East, and particularly the UAE, as thought leaders in creating sustainable energy solutions,” Mr Jackson told The National in an interview.
“We need to really start talking to potential partners about establishing a centre here to work together on the technologies that will help tackle climate change.”
Octopus Energy, which was valued at $5 billion after its last funding round in 2021, has grown on the back of its proprietary Kraken technology, a platform designed to promote smart grid use, increase efficiency and improve customer service.
Kraken, which uses algorithms to reduce suppliers’ and customers’ costs, has been licensed to more than 45 million accounts in 13 countries, through deals with companies such as EDF Energy and Good Energy.
Retailers such as Octopus Energy buy power in wholesale markets and sell it to end users, usually at fixed prices. However, this also makes them vulnerable to volatile gas markets.
The Dutch TTF gas futures, the benchmark European contract, hit a record high of €343 ($374) per megawatt hour in August after Russia reduced natural gas exports to Europe during its conflict in Ukraine.
The benchmark has since lost about 80 per cent of its value amid rising imports of liquefied natural gas (LNG) and high storage levels.
“We're still looking at gas prices at probably three times the average in the last decade, and so there's still probably another year of challenge, particularly in Europe,” said Mr Jackson.
In the year ahead, there is going to be “incredible volatility”, with prices dependent on weather and geopolitics, he added.
“But, over the next two or three years, what we'll see is an emerging new energy system.”
Despite the rising adoption of renewable energy in most parts of the world, natural gas is expected to play the role of a key transition fuel.
“Until we have a system that can make the most of renewables, gas is the perfect gap filler,” said Mr Jackson.
The move from fossil fuel-backed power generation to renewables will involve “decades of increasing electrification” with rising adoption of batteries required to store energy produced from solar and wind, he said.
“In the short term, some of the changes in the world energy system are: countries that won't deal with Russia getting new [energy] sources [and] countries that will deal with Russia taking on Russian gas and oil."
The Octopus Energy chief said an opportunity for energy retail existed in the Middle East.
“Whether you have competitive markets or state-owned markets and monopolies, it's [applicable] across the world … it also opens the gateway to driving down costs and making a more efficient system [especially] when you've got the intermittency or the variability of renewables,” said Mr Jackson.
Although energy-rich, some countries in the region have lagged in terms of infrastructure. But, a recent move towards having more interconnected power grids is seen as a positive.
Last year, several agreements were signed to connect the electricity networks of GCC states to Iraq's grid.
In 2021, Egypt and the Saudi Arabia also signed $1.8 billion worth of contracts to build transmission plants and connect each other's power grids.
“The more we link the [power grids], the more we can balance between different time zones,” said Mr Jackson.
“I think we'll end up with a global grid … it creates a more resilient and dramatically more efficient energy system.”
Octopus Energy is currently expanding its operations globally and has invested in a solar and wind farm in Morocco, he said.
The project, which will become operational in 2027, is expected to supply 3.6 gigawatts of clean power to the UK through subsea power cables.
In December, an Octopus Energy subsidiary also said it was investing in Spain-based renewables developer FF New Energy Ventures to expand activities in Spain and enter the Portuguese market.
The Iberian region is set to be an energy powerhouse given its abundant sunshine, strong winds and mature natural gas infrastructure.
"As they build sufficient capacity to exceed local demand, you're then exporting across Europe on the various use interconnected grids," Mr Jackson said.
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Sheikh Abdullah bin Zayed, Minister of Foreign Affairs and International Co-operation, unveils the Cop28 logo with President-designate Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, at Abu Dhabi Sustainability Week. Victor Besa / The National -
The Masdar display at the event. Victor Besa / The National -
The Mohamed Bin Zayed University stall. Victor Besa / The National -
Visitors walk past the Masdar stall. Victor Besa / The National -
The Adnoc display. Victor Besa / The National -
The National signage on display at the event. Victor Besa / The National -
The government of Fujairah's stall. Victor Besa / The National -
The Abu Dhabi Department of Energy's display. Victor Besa / The National -
Another view of the Adnoc stand. Victor Besa / The National -
Another view of the Masdar display. Victor Besa / The National -
Visitors at Abu Dhabi Sustainability Week. Victor Besa / The National -
Day two of Abu Dhabi Sustainability Week. Khushnum Bhandari / The National -
Abu Dhabi Sustainability Week aims to accelerate sustainable development and advance economic, social and environmental progress. Khushnum Bhandari / The National -
The Envision stand at Abu Dhabi Sustainability Week. Khushnum Bhandari / The National -
Masdar's stand at Abu Dhabi Sustainability Week. Khushnum Bhandari / The National -
The Tadweer stand. Khushnum Bhandari / The National -
The event brings together heads of state, industry leaders, entrepreneurs, investors and senior policymakers. Khushnum Bhandari / The National -
A solar energy diorama on Day 2 of Abu Dhabi Sustainability Week at Adnec in Abu Dhabi. Khushnum Bhandari / The National -
Abu Dhabi Sustainability Week plays host to some very big names in international business, including Huawei of China. Khushnum Bhandari / The National -
Saeed Al Tayer, managing director and chief executive of Dubai Electricity and Water Authority, delivers a speech. Khushnum Bhandari / The National -
Mahmoud Mohieldin, executive director of the IMF, left, in discussion on Day 2 of Abu Dhabi Sustainability Week at Adnec in Abu Dhabi. Khushnum Bhandari / The National -
Visitors at the Dubai Electricity and Water Authority stand at Abu Dhabi Sustainability Week in Adnec, Abu Dhabi. Khushnum Bhandari / The National -
Awaidha Al Marar of the Abu Dhabi Department of Energy, an Abu Dhabi Executive Council Member and Member of Enec's board of directors, delivers opening remarks on Net-Zero Ambitions in Energy on Day 2 of Abu Dhabi Sustainability Week at Adnec. Khushnum Bhandari / The National -
The Dubai Electricity and Water Authority (Dewa) stand at Abu Dhabi Sustainability Week in Adnec, Abu Dhabi. Khushnum Bhandari / The National -
The Aldar stand at Abu Dhabi Sustainability Week in Adnec, Abu Dhabi. Khushnum Bhandari / The National -
The Bee'ah stand at Abu Dhabi Sustainability Week in Adnec, Abu Dhabi. Khushnum Bhandari / The National -
Mariam Al Mheiri, Minister of Climate Change and Environment, and Ahmed El Hoshy, chief executive of Fertiglobe, right, in a panel discussion titled A Manifesto for Food Systems at Abu Dhabi Sustainability Week in Adnec, Abu Dhabi. Khushnum Bhandari / The National -
Sharif Al Olama, Undersecretary of the Ministry of Energy and Infrastructure, delivers a speech promoting solar power at the opening of Abu Dhabi Sustainability Week. Khushnum Bhandari / The National -
Laurent Fabius (2nd L), president of the constitutional council of France, speaks to guests at Abu Dhabi National Exhibition Centre. Photo: Presidential Court -
President Sheikh Mohamed speaks to John Kerry, US presidential envoy for climate, at a reception before the opening ceremony. Photo: Presidential Court -
President Sheikh Mohamed meets Hakainde Hichilema, President of Zambia. Photo: Presidential Court -
President Sheikh Mohamed meets Nana Akufo-Addo, President of Ghana. Photo: Presidential Court -
Dr Sultan Al Jaber, right, Minister of Industry and Advanced Technology Group, chief executive of Adnoc and chairman of Masdar, receives Prince Abdulaziz bin Salman, Saudi Arabia’s Minister of Energy. Photo: Presidential Court -
President Sheikh Mohamed greets Kassym-Jomart Tokayev, President of Kazakhstan. Photo: Presidential Court -
President Sheikh Mohamed stands for a photograph with heads of state and government. (Front row: R-L) presidents Surangel Whipps Jr of Palau, Nana Akufo-Addo of Ghana, Kassym-Jomart Tokayev of Kazakhstan, Yoon Suk Yeol of South Korea, Ilham Aliyev of Azerbaijan, Joao Lourenco of Angola, Filipe Nyusi of Mozambique and Abiy Ahmed, Prime Minister of Ethiopia. (Back row: R-L) Aziz Akhannouch, Prime Minister of Morocco, Wavil Ramkalawan, President of Seychelles, Hakainde Hichilema, President of Zambia, Yoweri Museveni, President of Uganda, Tiemoko Meyliet Kone, Vice President of Ivory Coast and Dr Sultan Al Jaber. Photo: Presidential Court -
President Sheikh Mohamed greets a guest. Photo: Presidential Court -
Dr Al Jaber with Ilham Aliyev, President of Azerbaijan. Photo: Presidential Court -
President Sheikh Mohamed greets Abiy Ahmed, Prime Minister of Ethiopia. Photo: Presidential Court -
(Back row L-R) Siaosi Sovaleni, Prime Minister of Tonga, Aziz Akhannouch, Prime Minister of Morocco, Wavil Ramkalawan, President of Seychelles, Hakainde Hichilema, President of Zambia, Surangel Whipps Jr, President of Palau, Nana Akufo-Addo, President of Ghana, Kassym-Jomart Tokayev, President of Kazakhstan, Yoon Suk Yeol, President of South Korea, President Sheikh Mohamed, Ilham Aliyev, President of Azerbaijan, Joao Lourenco, President of Angola, Filipe Nyusi, President of Mozambique, Abiy Ahmed, Prime Minister of Ethiopia, Yoweri Museveni, President of Uganda, Olafur Ragnar Grimsson, former president of Iceland and chairman of Arctic Circle, Tiemoko Meyliet Kone, Vice President of Ivory Coast, and Dr Sultan Al Jaber, Minister of Industry and Advanced Technology. Photo: Presidential Court -
President Sheikh Mohamed presents the 2023 Zayed Sustainability Prize for East Asia & Pacific Global High Schools to a representative from Kamil Muslim College, Fiji. Photo: Presidential Court -
Kassym-Jomart Tokayev, President of Kazakhstan (L), and President Sheikh Mohamed present the 2023 Zayed Sustainability Prize for Americas Global High Schools, to a representative from Fundacion Bios Terrae in Colombia. Photo: Presidential Court -
(L-R) Sheikh Saif bin Zayed, UAE Deputy Prime Minister and Minister of Interior, Kim Keon Hee, first lady of South Korea, Yoon Suk Yeol, President of South Korea, President Sheikh Mohamed, Ilham Aliyev, President of Azerbaijan, Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of the Presidential Court, Joao Lourenco, President of Angola and Ana Dias Lourenco, first lady of Angola. Photo: Presidential Court -
Guests stand for the national anthem during the opening ceremony of Abu Dhabi Sustainability Week. Photo: Presidential Court -
Children sing the UAE national anthem . Photo: Presidential Court -
Dr Sultan Al Jaber, Cop28 President-designate and the UAE's special envoy on climate change, speaks at the opening of Abu Dhabi Sustainability Week. Khushnum Bhandari / The National -
Mr Yoon, a keynote speaker at Abu Dhabi Sustainability Week. Khushnum Bhandari / The National -
US climate envoy John Kerry, centre. Khushnum Bhandari / The National -
Azerbaijan’s President Ilham Aliyev. Khushnum Bhandari / The National -
From left, Phillip Cornell, senior fellow of Atlantic Council Global Energy Centre; Christian Bruch, president and chief executive officer of Siemens Energy; Lorenzo Simonelli, chairman, president and chief executive of Baker Hughes; and Marisa Drew, chief sustainability officer of Standard Chartered. Khushnum Bhandari / The National
