Co-op Energy has struck an agreement with Octopus Energy, which will see the latter take on ownership and responsibility for the management and supply of energy to the 300k customers currently supplied by Co-op Energy, Flow and GB Energy.
As part of the deal, Octopus will retain the Co-op Energy brand, while the Midcounties Co-operative will retain responsibility for acquiring new customers under the Co-op Energy brand as part of its wider utilities strategy
The deal, completed for an undisclosed sum, will increase Octopus’s customer base to over a million. Co-op Energy customers will have access to its proprietary tech platform and will receive the same service as Octopus’s existing customers.
The two businesses say the transaction also includes the creation of a joint venture to further develop the community energy market in the UK. The joint venture will invest in projects, provide practical support to community groups and increase the volume of energy purchased from community schemes, encouraging more small-scale generation across the UK.
Customers of GB Energy and Flow will now become Octopus Energy customers while Co-op Energy customers who are members of the Midcounties Co-operative will remain as Midcounties members.
The deal could result in some redundancies, confirmed a Midcounties Co-op spokesman, adding that the number of roles affected had not been confirmed.
Midcounties chief executive Phil Ponsonby said: “The Midcounties board is extremely proud of what has been achieved by our energy business since we entered a market dominated by just a few energy companies back in 2011.
“At that time 99% of supply came from the Big Six and there were fewer than 12 companies in the market. Today there are over 70 and we firmly believe that we disrupted the market and played our part in reducing the dominance of the big players by providing fair prices, supplying 100% green electricity and supporting community energy projects all across the UK.”
Co-op Energy losses affected the most recent annual results at Midcounties. While the energy business had grown its sales to £423m, it was hit by rising wholesale costs. The society had taken 160,000 customers from GB Energy Supply in 2016 and 130,000 from Flow in 2018.
Mr Ponsonby added: “The market is now more competitive than ever, and it is clear to us that having the best technology is absolutely critical to delivering the best service to customers while maintaining a sustainable business for the longer term. Octopus have developed what we consider to be the most innovative and customer-focused technology anywhere in the industry today. But it isn’t just about technology, one of our strategic objectives is to make our members lives easier and our board was insistent that in looking for a partner, we found an organisation that shared our values, and put customers, colleagues and the environment at the heart of what they do. Octopus firmly meet these requirements and we are delighted to be partnering with them.”
Greg Jackson, CEO of Octopus Energy, said: “This acquisition and our ongoing partnership with Midcounties is another step on the road to improving the domestic energy market for good. Our renewable energy supply and outstanding technology is now delivering award winning service to over a million homes in the UK with 100% green electricity as standard. Co-op is one of the most well-respected British brands and we’re delighted to be working with them alongside our other cherished partners.
“I am also very excited about our joint venture for community energy. We have been hugely impressed by Co-op Energy’s achievement in this area and we believe that together we can help even more people from across the UK to come together in developing new sources of sustainable power.”