On May 7, Octopus Energy, an electricity sales company, announced that its existing shareholders Generation Investment Management and CPP Investments had increased their shares in the company. This transaction makes the valuation of the global energy and technology group, which has only been established for eight years, 15% higher than that of the previous round of investment, with a total amount of $9 billion (equivalent to 65.2 billion yuan).
"I think it is not too much to call Octopus Energy the prodigy of the energy industry in the past decade." Zoisa North Bond, CEO of Octopus Energy Generation, said in a speech at the 9th International Energy Agency Energy Efficiency Conference held in Nairobi, Kenya.
Al Gore, former vice president of the United States and founding partner and chairman of Generation Investment Management Company, also praised Octopus Energy as a model of mission oriented and sustainable future company.
"Octopus is a living example of the kind of company that this generation invested when it was founded. It is the promoter of a truly sustainable system led by a mission driven team." Al Gore praised it.
Octopus Energy is a British electricity selling company specializing in sustainable energy, founded by Greg Jackson, a digital entrepreneur and angel investor, in 2016. It aims to subvert traditional utilities by using technologies such as artificial intelligence, machine learning, cloud computing and data analysis.
On April 28, according to the latest data from Ofgem, Octopus Energy has grown from a start-up to a global energy leader after only eight years of development, and is regarded as a "subverter in the field of energy supply". At present, Octopus Energy has surpassed British Natural Gas, a veteran enterprise in the industry, and become the largest electricity selling company with the largest number of customers in the UK.
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"Continuous technology entrepreneurs" who have dropped out of school
Greg Jackson, the founder and CEO of Octopus Energy, is not only a typical representative of modern CEOs, but also a veritable serial technology entrepreneur.
Jackson grew up in a poor family near Middlesbrough. After his parents divorced, his mother worked as a barmaid and later studied on welfare. In the early 1980s, Greg Jackson began to be interested in electronic and computer coding. At the age of 16, Greg Jackson dropped out of school to write computer games, turning his love of making computer games into a full-time job.
At that time, Greg Jackson needed to join a large game studio to be promoted, but he wanted to make his own decisions, so he returned to a six-year college to study economics. Later, Greg Jackson was admitted to Pembroke College of Cambridge University, where he met the current board members of Octopus, including Stuart Jackson, CFO, and James Eddison, CTO.
Greg Jackson owned and managed a number of small businesses before he was 30 years old, employed 4-6 employees, and had a turnover of 400000-4 million pounds. His companies include C360, an e-commerce company, and Consultant Connect, a telemedicine provider. At the same time, Greg Jackson is also a director of many enterprises, including Zopa, a P2P lending company.
In addition, Greg Jackson, who is extremely business sensitive, has also served as an angel investor in several companies, including the construction of the world's largest submarine cable to transport renewable energy from Morocco to Xlinks in the UK and Altruistiq, a carbon accounting company.
As for the motivation of establishing Octopus energy, Greg Jackson said in an interview with The telegraph that the risk of not being able to use abundant clean energy is unimaginable. "I remember in the 1970s, when there was a power failure, we could only eat by candlelight. If we did this well, it would not happen again."
"I want to launch a new industrial revolution driven by renewable energy power generation. We are very close to a new energy system. We have the technology we need to significantly reduce energy costs, making energy cheaper and cleaner every year. We don't have to wait for new nuclear power plants." Greg Jackson added.
Greg Jackson also mentioned in the interview that providing cheaper clean energy is the goal of Octopus Energy. He realized that if the shift to green energy means increased costs, then this will be a challenge. Therefore, the company's work is to constantly solve the contradiction between cost and clean energy.
"This is about the desire to provide cheaper clean energy. If going green means increasing costs, there will be conflicts. Our job is to unremittingly solve these two problems."
He said: "The physical and economic principles of renewable energy are completely different from the previous energy system. When the weather is sunny, you will have enough ultra cheap electricity. So if we want to establish a cheap renewable energy system, it is important to carry out market reform so that (residential and industrial) consumers can use this electricity at the cheapest time." Among them, Smart grid technology and "dynamic pricing of the entire grid" will be the key to achieving overall efficiency.
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How did the company rise?
In the past two years, Octopus Energy's retail customer base has more than doubled, acquiring bankrupt competitors such as Bulb and Avro, and acquiring the UK and German retail utility businesses of oil and gas giant Shell. Today, Octopus Energy's influence extends far beyond the UK's borders. The company operates in 18 countries and serves about 8 million families.
Obviously, Octopus Energy's goal is the sea of stars, and its ultimate ambition is amazing.
"Energy companies have three kinds of future: bankruptcy, decline like tobacco companies or strive to enter the future. The best companies will compete with global energy companies." Greg Jackson refers to the size of Aramco or ExxonMobil. "The future global power business should indeed be the same size as the current global oil business. I hope we can become one of them."
So why is Octopus Energy so confident and achieving rapid growth?
The answer is: AI.
Historically, it is more difficult for energy companies to obtain value from digital and AI than many other industries. However, Greg Jackson believes that Octopus Energy has changed from an energy supplier to a software supplier with AI and software.
"Today, every business is a software business, which is an old saying, but it is absolutely true," said Greg Jackson.
This fast growing innovative enterprise rely on Yes Digital technology similar to Uber is used to provide solar energy, wind energy, smart grid and electricity meters, and provide flexible pricing based on energy conservation and balanced grid demand 。 —— This is the essence of virtual power plant.
It is here that its Kraken platform is launched, which has been developed into an integrated energy and consumer management system.
Kraken software and data analysis system can help utility companies track energy use to improve efficiency. Currently, 54 million international accounts have been authorized, with the goal of reaching 100 million accounts by 2027.
Greg Jackson mentioned how Uber's business is built around forecasting when and where drivers are needed and using pricing to manage supply and demand. "You can't centrally manage the renewable energy system by scheduling a group of people. You need a huge database, Match supply and demand at a time and place through price, Future The energy system will be like this 。”
Greg Jackson said that the current power system is like the old taxi dispatching system, and people will open and close a few large power stations to meet the relatively predictable needs of customers. In contrast, renewable energy systems have many widely distributed solar and wind farms, grid scale storage, cross regional connectivity, and millions of electric vehicles (and their batteries). "Most people may not know this, but there is a control room at the back end of each utility or power grid. In that control room, someone is responsible for dispatching power, just like a taxi. Before Uber appeared, the taxi company had an office, and someone was responsible for dispatching taxis. We replace it with big data, which can predict supply and demand or actually match supply and demand, and perhaps use price signals to ensure that they meet everyone's needs. This is the energy we need, so that every electric vehicle can get an automatic charging schedule. Owners and drivers don't need to consider this problem. They just need to plug in the power supply that is suitable for them. At the back end, we can calculate when and how much to charge to best manage the system. No one is involved. "
"Octopus alone generates about 1.5 billion lines of data every day. We use machine learning and algorithms to process these data, so as to better predict the consumption and power generation per minute, match them, and then transfer consumption, or even re-examine the way (and location) of energy generation. If renewable energy is the cheapest to use when generating electricity, then the long-distance cable connecting the power generation area with consumer demand will become increasingly important. "
At the same time, Octopus Energy, through technological innovation and intelligent energy management, Provide consumers with almost zero cost energy solutions To reduce their energy costs and promote the use of renewable energy.
North Bond added how Octopus Energy creates a technology and supply ecosystem for consumers.
"We began to consider installing heat pumps, solar panels, smart meters and other equipment at home, (trying to) create a product that will make your bill as close to zero as possible, so that (they) won't see any energy costs. We started to use our technology to calculate, using Kraken to arbitrage with the grid, and found that we can be very close to zero."
Octopus Energy has launched a zero bill mortgage loan that allows customers to move into houses equipped with clean technologies, such as heat pumps and solar photovoltaic power generation systems. This means that these houses can generate the required energy on their own, so that customers will not have to pay energy bills for at least ten years. Through cooperation with housing builders, this zero bill solution not only does not need national subsidies or support, but also is completely commercial and very commercial replicable.
"Through the cooperation with some British housing builders and the zero bill proposition, we have successfully reduced the cost of capital from banks. This is not something we need state subsidies or support. It is completely commercial. This allows us to reduce costs, because we have consumer connections at one end, and it's great to be able to quickly expand such products and replicate them over and over again. It's important for this success. " North Bond said.
In addition to zero bill mortgage loans, Octopus Energy also announced the first V2G electricity price in the UK, which is an innovative energy solution that allows electric vehicles to provide electricity when the grid needs it, or to charge when the electricity price is low. This service is realized through the Kraken platform and can balance charging and discharging to meet the needs of the power grid.
Not only that, as an additional measure, V2G electricity price allows customers to charge their electric vehicles separately from other parts of the family, and can be parallel with customers' conventional import electricity price. In addition, customers can benefit from solar power payment.
Finally, Octopus Energy also provided fans' club electricity price for customers near the company's wind farm, which is a kind of electricity discount service, further reducing the energy cost of these customers.
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