Octopus’s Greg Jackson: We have been gaslit by vested interests
Octopus Energy founder Greg Jackson has accused his opponents of “gaslighting” ahead of an imminent decision by ministers on whether to split up the UK’s power market.
Prime Minister Sir Keir Starmer is expected to draw a line under the zonal pricing debate as early as this week after months of increasingly fierce lobbying from both sides.
It is understood the government is leaning towards keeping the status-quo in a victory for Jackson’s opposition, which include Scottish renewable power giant SSE, the trade association RenewableUK and key unions.
In an interview on Friday, the British businessman told CityAM he hadn’t understood “what gaslighting was” until this campaign.
“Someone in Number 10 said to me this was the most aggressive lobbying campaign he had ever seen,” he said. “Honestly, the reality is consumers don’t have as many lobbyists as incumbents. That’s what you’ve seen here.”
Jackson has accused incumbent electricity suppliers of having a “vested interest” in keeping the current system, the national pricing model which keeps electricty rates uniform across the UK. They argue shifting to zonal would threaten infrastructure investment at a crucial time in the race to decarbonise the grid.
“In the past they’ve always had their own way,” Jackson said. “They can do it in the backroom and no one’s voicing what this means for consumers.
“Whether we win or lose this, what’s been played out in public and the reason it has been so ferocious is that those organisations… don’t like being challenged.”
Critics of the UK’s largest energy supplier though have questioned its own interest in zonal pricing. There is speculation that the firms’ tech arm Kraken, currently rumoured to be subject of a £10bn demerger plan, would benefit from the greater complexity created by a zonal energy market.
“What has been briefed is that Kraken makes money per trade and there would be more trades in a zonal market. It’s fundamentally false,” Jackson responded when questioned on the claims.
“Kraken doesn’t make any money per trade, it is a fixed license fee depending on the number of customers or number of gigawatts per hour, so the market structure makes no difference.”
He added: “The reality is we’ve probably lost business on Kraken because some of the incumbents are not so keen on dealing with us due to us challenging them like this.”
The energy tycoon’s opposition has also attacked his access to Whitehall. Official records show Octopus held meetings with energy ministers on 16 occasions in the six months after Labour’s election. He also holds a seat on the board advising Labour on its industrial strategy.
“I’ve had two meetings with senior ministers on zonal pricing,” Jackson told CityAM. “I’d like to see the meetings the various lobbyists against zonal have had because my understanding is it is going to be five or ten times more than we had.”
What next for Octopus Energy?
The boss of Octopus is clear he intends to keep banging the drum for zonal pricing, whichever way the government goes.
He argues taking on the policy would bring the UK in line with other countries while saving at least £3.7bn per year. He has the backing of Ofgem’s chief executive, Jonathan Brearley.
“It is the norm in the OECD, this idea that it is somehow complicated is utter nonsense. If more than half of it in the OECD is done this way, I think Britain could do it.
“There’s still a chance that zonal will go through but if it doesn’t, at least we’ve got much closer than anyone has done before to take on those incumbent interests.
“The reality is, we will just keep fighting because consumers should not be paying supranormal returns to companies with guaranteed incomes. That’s just wrong.”