Generation Investment Management, the sustainability-focused firm founded by Al Gore, is acquiring a stake in renewable-energy producer and provider Octopus Energy.
Generation is investing US$600m (€512m) to own a 13% interest in Octopus Energy, which manages more than £3bn (€3.5bn) in renewable-energy generation.
Octopus Group, founded in 2000, created its Octopus Energy subsidiary in 2016 and merged it with Octopus Renewables earlier this year to become one of the biggest clean-energy operators in Europe.
This week, Octopus Energy was appointed by UK energy regulator Ofgem to take over the supply of energy to 580,000 customers of collapsed provider Avro Energy.
It is understood that the agreement is unrelated to the appointment or the current situation in the UK’s energy market, which has seen a number of recent failures of small providers.
Generation and Octopus did not comment directly on Avro Energy or future consolidation opportunities, but they said their collaboration had “been several months in the making” and that the proceeds of the investment would be used by Octopus Energy “to turbo boost its mission to drive the renewable revolution globally”.
The investment will also help Octopus Energy to continue to enhance its smart-grid capability and the rollout of its customer-services platform Kraken.
Australian company Origin Energy, which acquired a 20% stake in Octopus Energy last year, has also invested a further US$55m.
“Whilst the UK energy market is currently in a tough state, it’s highlighted the need for investment in renewables and technologies to end our reliance on fossil fuels,” said Greg Jackson, founder and CEO of Octopus Energy.
“Three years ago, the management team of Octopus Energy met to discuss growth plans for our fledgling company. We watched An Inconvenient Sequel and were inspired to accelerate and expand our mission to make energy greener faster, cheaper, across the globe. Being backed by Generation, co-founded and chaired by Al Gore, enables us to make that dream come true.”
Tom Hodges, partner in the long-term equity strategy at Generation, said: “Octopus Energy has an extraordinarily good fit with Generation’s mission of investing over the long term to support system and climate-positive companies.
“The world is at the early stages of an unprecedented energy transition which is essential to reach the goals of the Paris Agreement. This can be done in a way that is better for the environment and consumers.
“Octopus and its software platform Kraken are at the forefront of innovation and helping to create the dynamic and flexible renewable energy system needed. Generation is pleased to partner with Octopus Energy to help build that future.”
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