Dusseldorf It is an action that Octopus Energy’s British customers should remember: on a Sunday in May, the energy provider sent them a push message on their smartphone to use electricity – and earn money with it.
More than 70,000 people followed the call, which was not a marketing gimmick – but possibly a foretaste of the electricity markets of the future. Because during the Octopus Energy campaign, electricity prices were negative. There was so much wind and sun that there was too much energy in the grid. The electricity should have been regulated, instead it flowed into thousands of washing machines that switched on spontaneously.
Consume electricity when there is a lot of electricity and save electricity when it is dark: the idea is not new, but hardly any other provider is working as aggressively on its implementation as the British with the pink squid logo. “Our goal is to change the market,” announced Andrew Mack, managing director of the German Octopus subsidiary, in an interview with the Handelsblatt.
The company is attacking the established structures in this country on several levels. Customers make offers that astonish the operators of comparison portals. “For electricity, for example, they currently offer contract periods of one month with a price guarantee of 24 months at the same time,” reports the comparison website Verivox. “In view of the current high prices and the very tense energy market situation, such contracts are currently very attractive for consumers.”
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At Verivox, Octopus Energy is currently one of the ten most popular providers. At Check24, too, the supplier has a recommendation rate of 85 percent, a very good value according to a spokeswoman for the portal.
For example, after one year in the German market, Octopus Energy has already collected a five-digit number of customers. In its home market of Great Britain, it is already the fifth largest energy supplier with three million customers.
“Energy revolution now!”
At the same time, Octopus Energy wants to change the rules of the game for German energy suppliers. The fact that low-cost providers lure customers with competitive prices and then can no longer supply them with electricity or gas in a situation like the current one goes against the grain for the company. In a position paper from Octopus Energy to the energy working group, which helped prepare the new coalition agreement, it says: “Dubious business practices must be stopped in order to restore confidence in the industry.”
Above all, however, the British company is fighting to modernize the energy sector. The position paper to the traffic light representatives, which the utility himself describes as a “Manifesto”, bears the unrestrained title: “Energy revolution now!”
The fact that Octopus Energy appears with such attractive energy offers and such self-confidence in the current market situation is not entirely unfounded. “We are very well capitalized,” says managing director Andrew Mack. After all, the company recently had powerful investors behind it.
Last week it was announced that the Canada Pension Plan – one of Canada’s largest pension funds – is joining Octopus Energy with a $ 300 million investment. Just a few weeks earlier, former US Vice President Al Gore invested $ 600 million and now owns 13 percent of Octopus Energy.
“If we were currently profitable, we would have done something wrong.”
With the fresh money, Octopus Energy wants to “invest as much as we can – as is customary in the digital industry,” says Mack. “Currently our focus is on investment and growth, not on profitability.”
All areas bundled in one team
The investments are likely to flow into green electricity generation, among other things, because Octopus not only sells energy contracts, but also owns wind and solar systems in several European countries.
Upon request, the Canadian fund announced that it wanted to use its investment to take advantage of the growing market opportunities that arise in the course of the further development of the energy sector. But he is not only referring to green power generation systems.
At the center of the planned investments is the Octopus Energy IT platform called Kraken. It is the key to the company’s success and the central pillar on which its ambitions are based. “Our technology is aligned with the vision we have of the future energy markets,” says Mack.
Classic energy providers have different departments for topics such as billing, electricity meters and the like, according to the managing director. “When a customer calls, they first have to be put through to the right contact person.” At Octopus, on the other hand, all areas are bundled on one platform and are processed by small, customer-specific teams of generalists.
The Kraken platform simplifies processes and saves staff. Above all, however, it can deal with requirements that conventional systems are simply not designed for. “With a classic CRM system it is already difficult to change the electricity tariff every twelve months,” says Mack. “On the other hand, we can push the customer to their cell phone every day to see how much their electricity will cost the next day.”
“Want to introduce real-time tariffs in Germany in the coming year”
The software is intended to enable customers to use electricity primarily when it is available in sufficient quantities and therefore cheap – and in the long term without the customer even having to pay attention to it.
Octopus Energy is now cooperating with Tesla to automatically optimize power consumption based on the offer. For owners of Tesla wallboxes, the two companies are jointly offering a particularly low electricity tariff. The idea: the wallbox should automatically charge the Tesla when electricity is cheap.
Udo Sieverding from the consumer advice center in North Rhine-Westphalia says: “The model of flexible electricity tariffs is already working in Great Britain. There Tesla accesses the power wall of the electricity customers, who in contrast benefit from very low tariffs. “
In Germany, all of this is still a long way off. Octopus Energy does not yet offer any variable electricity tariffs for customers. The cheap Tesla tariff is already available to owners of the corresponding wall boxes, but Octopus does not save any money compared to other tariffs.
The reason: Unlike in some other European countries, very few intelligent electricity meters, so-called smart meters, have so far been installed in Germany. Therefore, for most customers, the actual power consumption cannot be tracked to the exact hour and certainly not regulated.
Octopus Energy wants to change that. “We are committed to accelerating the smart meter rollout in Germany and reducing the bureaucracy on this topic. To this end, we are also in talks with important, relevant stakeholders, ”says Mack. He is optimistic that the new federal government wants to tackle the issue.
Octopus is already tackling the matter: “In the coming year we want to introduce real-time tariffs in Germany as well,” says Mack. “There should be a pilot tariff at the beginning of 2022. In terms of the energy market, however, such tariffs only make sense for customers who already have smart meters. “
There are already suppliers such as Tibber who offer variable electricity tariffs in Germany. Here, however, the consumer advocate Sieverding warns: “Currently these tariffs do not work or are extremely expensive because the procurement costs are so high.”
The octopus platform Kraken is becoming more and more important. The German energy giant Eon is already using the platform of its competitor in Great Britain. Octopus Germany managing director Mack does not want to answer the question of whether Eon could soon also use them in Germany. But he suggests: “We are talking to major energy companies around the world and will continue to issue new Kraken licenses.”
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