The Octopus Energy Group is planning to grow into the green hydrogen sector, citing the technology’s benefits for “sections of the economy that electrification can’t reach.”
As part of Octopus Hydrogen, a new branch of the corporation, it plans to launch a locally distributed “green hydrogen as a service” offering.
The green hydrogen, which is expected to debut in Autumn 2021, will be used in industries such heavy goods transportation, energy storage, industrial applications, and aviation.
Octopus Renewables was acquired by Octopus Energy Group, bringing together a portfolio of more than 300 renewable energy projects with a total capacity of 2,800MW spanning six countries, as well as the company’s supply business, which presently serves two million residential consumers.
Its Kraken platform now has 2.2 million consumers in the UK, with energy providers such as E.On and Good Energy in the UK, as well as Origin Energy and Hanwha Corporation in Australia, using the software.
Octopus Energy Group is “uniquely positioned to drive down costs and enable customers drive the transition to a competitive and 100 percent green economy” because to its huge renewables portfolio and Kraken platform, according to a statement from the business to Current.
In the United Kingdom, interest in green hydrogen is growing:
Both the government and firms wanting to invest in a solution to decarbonize problematic areas are increasingly interested in green hydrogen. The UK government launched a £171 million Industrial Decarbonisation Fund in March to support green tech initiatives focusing on hydrogen and carbon capture and storage (CCS), building on the National Infrastructure Strategy unveiled in November 2020.
“Zero Carbon Humber, which will contain one of the world’s first at-scale low carbon hydrogen production plants as well as CO2 and hydrogen pipelines, as well as the South Wales Industrial Cluster,” says the company. which will see solar giant Lightsoure bp develop solar powered green hydrogen for direct use in steel manufacturing on site, are two of the nine projects set to be funded by the scheme.
ScottishPower, as part of its Green Hydrogen for Scotland programme, submitted a planning application in April for up to 40MW of solar, up to 50MW of battery storage, and a 20MW electrolyser. Hydrogen companies are also growing, with Logan Energy announcing this week that former SSE CEO Ian Marchant will take over as head of the board.
Green hydrogen should take over from fossil fuels in a variety of sectors, according to a research published by the International Renewable Energy Agency in March. Green hydrogen and its derivatives, such as ammonia and methanol, are expected to consume 30% of electricity by 2050, according to the company. To get to this position, the green hydrogen industry will have to grow up dramatically, requiring over 5,000GW of hydrogen electrolyser capacity, up from just 0.3GW now.
In the fiscal year 2019/2020, Octopus Energy’s income increased by 160 percent, from £477 million to £1.24 billion:
Since then, the company has predicted that it will reach £2 billion by the end of the year in April 2021. Gross margins grew from 0.8 percent to 5.4 percent (6.8x), owing to greater efficiency provided by Kraken technology, while gross profit grew from £3.5 million to £67 million (+1,800 percent).
Despite this increase, the company reported a £53 million loss for the fiscal year 2019/2020 as a result of “unwavering investments” in foreign expansion, technology development, product innovation, and client growth.
This includes entering Germany in November, the United States in September, and Australia in May 2020 – the latter of which involved a 20% acquisition from Origin Energy, transforming Octopus Energy into a unicorn.
The company’s customer base in the United Kingdom increased to 2.3 million accounts, or 1.4 million homes. This trend has continued into 2021, with 2.1 million households reached in April 2021, bringing the company’s market share to 7.5 percent just five years after its inception.
Greg Jackson, CEO and creator of Octopus Energy Group, stated, “The UK business works at sustainable operating margins, with Kraken enabling lower operating expenses than rivals.”
“Our net loss of £53 million is due to our continuous investment in new technologies for a low-carbon grid, expansion into new countries and regions, and client growth,” says the company. Our quest to make energy more affordable and environmentally friendly around the world is moving forward at a breakneck speed.”