Tuesday, February 27, 2024

Octopus boss Greg Jackson: The UK is going backwards on renewables

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Greg Jackson, CEO and founder of Octopus Energy


7 min read

Greg Jackson has been working 14 days straight but he is not complaining. “This is what no one tells you about trying to launch an international company,” he jokes, “but I don’t mind by the way, I love my job.”

The Octopus Energy founder and CEO has just been in Paris where he had meetings with Rishi Sunak and President Emmanuel Macron, whom he was seated opposite. “I think it tells you the extent to which politicians really do now understand that the transition to green energy is a growth opportunity. It’s the biggest opportunity for economies and businesses since the internet.” 

But he is frustrated as he sees UK consumers “massively overpaying for energy because you can’t build the infrastructure”. During his trip to Paris, Jackson announced a €1bn investment in the French green energy market. Octopus already invests more in the UK and it would go even further but, he says: “You have got two issues for building renewables: one is planning and the other is grid connections.” 

He later adds: “Funding is impossible to deploy in the UK, not because the money’s not there, it’s because of the planning and the grid issues.” 

Jackson says the grid system was not built for the renewable revolution and that there needs to be much-needed development, quickly: “We need to increase the pace of development 20-fold and the system is just not set up for that. There are countries like Brazil and India that have got contestable grids. You can literally build your own transmission lines if you can’t get a connection. 

“The UK needs to be looking at radical solutions like that because the idea that we can plan this entire transition top down – you couldn’t have planned the internet top down, the whole point was it grew because it was decentralised, and we need to do that with energy.” 

Decentralisation is Jackson’s buzzword and if someone wants to build a wind farm, he believes they should be able to build their own grid connection – and if the grid doesn’t have the capacity, they should be able to get that upgraded. “Things should be driven by demand as much as top-down planning,” he says. 

We need to increase the pace of development 20-fold and the system is just not set up for that

Speaking of wind farms, the energy boss is stunned at the situation the government has found itself in: “Onshore wind farms are essentially currently banned. There’s one line of legislation that says that every objection to a planned development must be fully satisfied before it’s given permission. It only applies for onshore wind farms. No other infrastructure has this constraint.” 

The opposition to onshore wind, he says, comes down to two things: objections sent to MPs and wind farms being built in beauty spots. Both, he argues, are now redundant. 

The first, Jackson says, is because of the change in bills: “It was a huge issue 15 years ago but the world has changed in the last 15 years. Back then wind farms put our bills up, today they bring them down.” 

The second is with the change in the thinking of energy companies: “They’ve often been built in beauty spots because they were built in the windiest places. Now we still need to build them in windy places but we need to find the places that people want them – and in return let those people enjoy the benefits of cheaper power.” 

Octopus does this through a project called The Fan Club, where people living near Fan Club wind turbines get 20 per cent off electricity when it is windy and 50 per cent off when it is very windy. Jackson has had 16,000 individuals get in touch asking for wind farms near them, without marketing it, but he is left frustrated that there is “huge demand” yet “no route to supply it to any of them”. Jackson adds: “It is particularly frustrating when we know that during the energy crisis, people could be paying less.” 

Now is the time to do something about it, he says – and look to Germany for a roadmap: “During the energy crisis, Germany developed five liquid natural gas terminals in one year… why doesn’t Britain demonstrate that we can build? Why don’t we build a bunch of wind farms in one year to drive energy prices down for everybody?” 

Short-term planning reform is key, he says. “I would love to see an announcement of either some special planning zones where we speed up the planning and the connections and do the wind farms in the year or we even announce competitions for communities who want it and, frankly, we make it totally people-driven,” he adds. “We can say, ‘Who wants cheap electricity?’ And, whoever is going to move fastest gets it. People will jump for it!” 

He hopes that would push the grid and energy regulator Ofgem into action, as his main worry is that bureaucracy and centralisation around planning and the grid will leave Britain “in the slow lane”. 

Germany developed five liquid natural gas terminals in one year… why doesn’t Britain demonstrate that we can build wind farms?

He says: “Britain has been a world leader in renewables. At one time, you could build a wind farm in the UK in four years. It’s now at least 12. So the UK is going backwards, while China and other economies like the United States with its inflationary reduction act are accelerating. 

“We’re going to do this anyway so do we want to go first and create the export industries of the future? The jobs and the clean economy here first that the rest of the world will want? Or do we pay them to do it for us, expensively, slow and late – and they get the jobs?” 

Jackson is prone to an entertaining analogy – and then apologising for overdoing them. “When the iPhone launched, all the mobile mast engineers suddenly had to improve their capacity for carrying data – 10 times, 100 times, 1,000 times? If you’d asked them how long it would take they would have said decades but because the iPhone had been launched, they just had to do it. If we just start building this stuff and we make it so no one’s got any choice, like the grid and Ofgem, they’ll fix it.” 

As a child, Jackson experienced being cut off by the nationalised gas board “in a way that wouldn’t be acceptable today”. One of the founding missions of Octopus was to recognise that “high bills cause untold anxiety and hardship” – and it is why he was so taken aback by British Gas’s handling of the prepayment scandal which saw meters force-fitted into vulnerable customers’ homes. 

“I think we were all shocked by what we saw,” Jackson says of the way traditional, rather than smart prepayment meters, were installed “by some companies…heedless of circumstance”. He then adds: “I think there are regulatory failures at Ofgem as they had been crawling all over energy companies for the last year and hadn’t picked it up.” 

Jackson would like to see the regulator provide more transparency and focus on “outcomes [for customers], not bureaucratic processes” as he claims “loads of companies are clearly offering appalling service and have yet got a clean bill of health”. 

Jackson does not want Octopus to be one of them. He tells me about the idea he had on a cold wintery night while on his way home from work: to send heated blankets to those who get in touch with Octopus concerned about their heating bills. 

That evening he called their chief product officer and within a few days, they bought 5,000 electric blankets that give out 40 or 50 watts of heat; enough to keep a human warm: “We did that all without any fanfare because we want to help people… We ended up giving away 40,000 electric blankets. Martin Lewis then promoted [them] and, well, then it ended up with the UK running out of electric blankets!”

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