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Octopus to launch in US after deal to enter Texas
29 September 2020, 13:44
Texas has one of the US’s least restricted energy markets.
The boss of one of Britain’s biggest challenger energy suppliers has set his sights on Texas after penning a five million dollar (£3.9 million) deal to enter the US market.
Greg Jackson, the chief executive of Octopus Energy, said that he was holding discussions with large US energy companies who are interested in licensing his software platform which runs the business’s UK supply arm.
But it was an acquisition that pushed Mr Jackson’s business into the US energy market.
On Tuesday, Octopus confirmed that it had bought Evolve Energy, a Silicon Valley start-up run by Michael Lee.
“It’s given us a bridge into Silicon Valley, an ability to tap the talent pool there, an operating business in Texas, and a vision that will very quickly take the combined technology across the US,” Mr Jackson told the PA news agency.
The US is a forbidding market, but a key one for a company with ambitions like Octopus – Mr Jackson has previously said he wants his platform, Kraken, to reach 100 million customers by the end of the decade.
At the moment, the energy supply in all but 13 US states is run as a monopoly, and among those 13, only Texas has a system comparable to that in the UK, Mr Jackson said.
“You have full retail competition with branded companies providing every aspect of customer service, the same way it happens in the UK,” he said.
He added: “Texas is the best place in the US to get your model and your technology established, and certainly for us that’s the exciting thing.”
Octopus’s entry into Texas follows a similar move by Bulb, its rival challenger, although British Gas owner Centrica is set to leave the state after signing a 3.6 billion dollar (£2.8 billion) deal to sell its business there.
The Lone Star State has long been associated with the oil and gas industry – the most popular US benchmark for crude oil prices is West Texas Intermediate.
But engineers in the state have also turned their hand to renewables, putting it at the forefront of the green energy transformation in the US.
“Texas is a very high-energy usage state, where you have large homes with cooling… amazingly, Texas is one of the states that is leading the way in renewables. It has a lot of wind and increasingly some solar,” said Mr Jackson.
“Even though Texas is the home of oil and gas, it’s actually now increasing renewables.”