Bonus Episode! Greg Jackson CEO of Octopus Energy Talks The Green Transition AND MORE!

Summary

The Fully Charged Podcast: Bonus Episode! Greg Jackson CEO of Octopus Energy Talks The Green Transition AND MORE!
Release Date: October 23, 2024
Host: Robert Llewellyn (The Fully Charged Show)

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1. Introduction and Evolution of Octopus Energy

Timestamp: [00:10] - [01:34]

In this bonus episode, Robert Llewellyn welcomes Greg Jackson, the founder and CEO of Octopus Energy, to discuss the company’s meteoric rise and its role in the green energy transition. Jackson reflects on the rapid growth of Octopus Energy, emphasizing that while it feels like an accelerated journey, the company has been operational for nearly nine years.

Greg Jackson [00:39]: "We're nearly nine years old. Right. And you go so quickly from feeling like, wow, I can't believe done so much so fast to terrified that, you know, if it's not, it's all going to slow down."

Jackson attributes their success to starting without legacy constraints, allowing Octopus Energy to fully embrace the inevitable shift towards renewable energy. He highlights the consistent annual cost reductions in wind, solar, and battery technologies, reinforcing the inevitability of a global energy transition.

Greg Jackson [01:12]: "We spotted the inevitable energy transition... the cost of wind, the cost of solar, the cost of batteries is falling 13% per year."

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2. Public Acceptance and the Role of Electric Vehicles (EVs)

Timestamp: [01:34] - [05:17]

Robert inquires about the initial public resistance to electric cars, likening it to historical skepticism. Jackson explains that while early perceptions underestimated EVs, the transformative experience of driving an electric car quickly turned many consumers into believers.

Greg Jackson [02:20]: "The electric vehicle is the transformer. It's the, it's the gateway drug."

He distinguishes between solar panels as primarily financial instruments and EVs as catalysts for broader energy adoption, leading consumers to explore additional green technologies like heat pumps and home batteries. Jackson emphasizes that once consumers experience the benefits of EVs, they are more likely to adopt other renewable solutions.

Greg Jackson [03:59]: "Once you've got an electric car, they start changing everything... it's a significant experiential change in your life."

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3. Backlash from the Fossil Fuel Industry

Timestamp: [05:17] - [07:25]

The conversation shifts to the resistance faced from the fossil fuel industry. Jackson argues that the backlash is a direct result of EVs undermining the traditional power dynamics and economic dominance of fossil fuels.

Greg Jackson [04:42]: "Every single electric car is the end of that bit of power and dominance you've got over someone's life or over an economy."

He criticizes European governments for delaying the green transition to protect incumbent automakers, which he views as detrimental to both the economy and environmental progress. Jackson contrasts this with China's aggressive investment in renewables, highlighting the risk of Western economies lagging behind.

Greg Jackson [06:11]: "The move to electric vehicles is much more important than the move to online retail... countries like China, Europe, and the US are at risk."

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4. Energy Market Structures and Need for Reform

Timestamp: [07:25] - [16:23]

Jackson provides a critical analysis of current energy market structures, particularly in the UK. He points out the inefficiencies of a single national pricing model that fails to reflect regional variations in renewable energy generation.

Greg Jackson [13:56]: "If there's a supply constraint in the southeast of England, in London, that will set the national price at a higher rate."

Using Scotland as an example, Jackson illustrates how localized renewable energy production can lead to significant cost savings if market structures allowed consumers in windy regions to benefit from cheaper electricity. He argues for market reforms that enable more granular data and localized pricing to harness the full potential of renewable energy sources.

Greg Jackson [14:35]: "If we build wind farms in the southwest of England, the electricity delivered to consumers will be 1.4 to 2.6 times cheaper than when we build it in Scotland."

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5. Innovation through Kraken and Octopus Energy’s Technological Advancements

Timestamp: [18:36] - [20:09]

Discussing innovation, Jackson introduces Kraken, Octopus Energy’s proprietary technology platform designed to modernize the energy sector. Kraken allows for extensive data processing, enabling intelligent energy management and optimizing consumer energy use.

Greg Jackson [19:48]: "More than half of the value of Octopus as a group is actually Kraken."

He emphasizes the importance of collaboration, noting that Octopus Energy licenses Kraken to other companies globally, fostering a broader adoption of advanced energy solutions. This technology is pivotal in managing the complexities of renewable energy integration and grid optimization.

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6. Government Policies and Support for Green Energy

Timestamp: [20:06] - [21:55]

Jackson expresses optimism about the new government’s commitment to green energy, particularly their focus on green energy as one of their core missions. He appreciates the government's stance but warns against the superficial measures that fail to drive substantial renewable infrastructure growth.

Greg Jackson [20:09]: "They won their election because most people know that green energy is the route to cheap and more secure energy."

He calls for continued bravery and grid reforms to ensure that renewable investments translate into tangible benefits for consumers, such as lower electricity prices when renewables are abundant. Jackson underscores the urgent need for policies that facilitate the transition rather than hinder it through outdated regulations.

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7. Facilitating Consumer Transition to Electric Vehicles

Timestamp: [22:35] - [31:29]

Addressing consumer concerns, Jackson discusses strategies to make electric cars more affordable, highlighting the rapid decline in battery costs and the emergence of a second-hand EV market. He predicts that many EV models will reach price parity with petrol cars within the next year, making them increasingly accessible to a broader audience.

Greg Jackson [28:55]: "The cost of batteries is falling at 13% a year and there are more technology breakthroughs to come."

Jackson also touches on vehicle-to-grid (V2G) technology, envisioning a future where EVs act as decentralized energy storage systems, contributing to grid stability and providing power during peak demand. He anticipates widespread adoption of V2G as regulatory barriers are overcome and car manufacturers incorporate bidirectional charging capabilities.

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8. Future Technologies: Microgeneration and Vehicle-to-Grid Charging

Timestamp: [25:12] - [31:29]

In response to audience questions, Jackson elaborates on vehicle-to-grid (V2G) technology, describing it as a potential game-changer for energy storage and grid management. He foresees a future where millions of electric cars can collectively power the entire UK grid during peak times, significantly enhancing energy resilience.

Greg Jackson [25:51]: "When we've got 10 million electric cars in the UK with vehicle to grid that can power the whole of the UK at peak time."

Regarding microgeneration, particularly wind, Jackson acknowledges the technical challenges but remains optimistic about technological advancements that could make small-scale wind generation more viable. He emphasizes the need for regulatory reforms to facilitate the integration of microgrids and decentralized energy systems.

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9. Carbon Pricing and Regulatory Challenges

Timestamp: [31:46] - [33:54]

Addressing the broader policy landscape, Jackson advocates for a straightforward carbon tax as the most effective measure to drive the clean energy transition. He criticizes the complex and fragmented approaches to carbon reduction, which he believes undermine the effectiveness of voluntary schemes and emission trading.

Greg Jackson [32:15]: "We just need a carbon tax really. But the reality is that governments around the world are scared to do it because of the incredible lobbying interests."

Jackson also highlights the regulatory hurdles in establishing microgrids, where existing frameworks excessively increase costs and complicate the integration of decentralized energy sources. He calls for streamlined regulations that support innovation and the adoption of renewable technologies without imposing prohibitive barriers.

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10. Conclusion and Closing Remarks

Timestamp: [33:54] - End

Robert concludes the episode by expressing strong support for Greg Jackson and Octopus Energy’s mission. He encourages listeners to back their efforts in pushing for effective government policies and market reforms that facilitate the green transition.

Robert Llewellyn: "It's fantastic to have you here. Thank you very much to Greg Jackson, ladies and gentlemen. Thank you."

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Key Takeaways

• Octopus Energy’s Rapid Growth: Achieved by avoiding legacy constraints and embracing renewable energy early.
• Electric Vehicles as Catalysts: EVs serve as gateways to broader adoption of renewable energy technologies.
• Industry Resistance: Fossil fuel industries create backlash to maintain economic and political dominance.
• Market Structure Reforms Needed: Localized pricing and granular data are essential for optimizing renewable energy use.
• Technological Innovations with Kraken: Octopus Energy’s platform enables intelligent energy management and global scalability.
• Government Policy Critique: Calls for robust support and grid reforms to accelerate the green transition.
• Affordability of EVs: Battery cost reductions and emerging second-hand markets are making EVs more accessible.
• Future of V2G and Microgeneration: Potential to revolutionize energy storage and grid stability, pending regulatory support.
• Carbon Tax Advocacy: Essential for driving effective and unified global carbon reduction efforts.

This episode provides a comprehensive overview of the current state and future prospects of the green energy transition, highlighting the pivotal role of innovative companies like Octopus Energy in shaping a sustainable future.

Transcript

[Interviewer]

Please welcome onto the stage Greg Jackson, founder and CEO of Octopus Energy. It feels to me so rapid, the emergence of Octopus, that and the. And what you're doing now, it feels like it's happened in the last six months. I know it hasn't. Can you just give us a quick potted history of how you got from when you first started. I think I met you in the very early days to how to where you are now? Because it's just astronomical, really.

[Greg Jackson]

It's funny you say that, because I'm actually terrified. We're nearly nine years old. Right. And you go so quickly from feeling like, wow, I can't believe done so much so fast to terrified that, you know, if it's not, it's all going to slow down. And so thank you for the reminder. It feels quick to you, but I've also got to say, I think the thing behind us is very similar to the thing behind everything electric and what you've done, which was we spotted the inevitable energy transition.

[Interviewer]

Yeah.

[Greg Jackson]

And because we started with no legacy, we were able to just get fully into what is going to take to build a global transition that's cheaper and faster than anyone recognizes. Because if you looked at the cost of wind, the cost of solar, the cost of batteries is falling 13% per year.

[Interviewer]

Right.

[Greg Jackson]

If you look at all of that, it is inevitable this is going to win. So we just started backing at the right time.

[Interviewer]

Right. And I mean that. And have you seen that, you know, a shift in public opinion slash acceptance of what you're proposing? Because, I mean, certainly when I first started talking about electric cars, there was a general big resistance, saying, they don't work, they're not safe, they've done all their excuses, they're too boring to repeat. Did you get that same kind of initial resistance or was it. Was it fairly straightforward to get customers? I'm thinking.

[Greg Jackson]

I think when we started, we didn't know that electric cars were going to be the thing that drove the change. What we could see was that all the sources of energy, renewables, were just getting cheaper and cheaper and cheaper. And of course, because of climate change, the world would have to go this way.

[Interviewer]

Yeah.

[Greg Jackson]

I think what happened was you could see that electric cars were coming out when you had to go in them. It was a transformative experience. You were like, this isn't just a cleaner. You're not buying this because you're hippie, although you may be, and all power to you, but actually this is an upgrade. This is better than. And I remember, like, this magical feeling the first time I drove my, my first electric car.

[Interviewer]

Yeah.

[Greg Jackson]

I was like, anyone that does this is never going back. Now, obviously I was wrong.

[Interviewer]

Yeah.

[Greg Jackson]

You know, I mean, only 4% want to go back.

[Interviewer]

Yes.

[Greg Jackson]

So, you know, anyway, some people do.

[Interviewer]

Want to go back, but that, I mean. Yes. No, that has, I mean, would you see then, in a sense the EV as being a really integral part of that, of that shift? Is that because, I mean, from what I can, from my experience, it's been people I've known who put solar panels on their roof just after a few weeks went, well, I could charge my car off those, I'll get an electric car. And the, and vice versa, people get an electric car, go, well, I can fill my electric car with from my roof. Is that a correlation you've seen?

[Greg Jackson]

I think, first of all, policymakers, governments and regulators and industries have obsessed over the source of electricity. I mean, I just did it. I talked about renewables.

[Interviewer]

Yeah.

[Greg Jackson]

But from a consumer point of view, I think the electric vehicle is the transformer. It's the, it's the gateway drug.

[Interviewer]

Yeah.

[Greg Jackson]

I think solar panels were really ever just for most people, a financial instrument. You know, you can, you can get cheap electricity or get a better return on your money than a pension fund or whatever.

[Interviewer]

Right.

[Greg Jackson]

But for an electric car, it's a significant experiential change in your life. And I think. But once you've got that, you absolutely think, hang on, if I can charge this car for, I don't know, six times cheaper than driving a petrol car on a smart tariff, what if I get solar panels? And by the way, if I can get electricity that cheap, why forget a heat pump? And so what we found is once people got an electric car, they start changing everything. And you know this. I'm sure we'll talk about the sort of the media you mentioned already, the media kind of backlash against EVs. Imagine what it is like being the fossil fuel industry at the moment.

[Interviewer]

Yes.

[Greg Jackson]

Because every single electric car is the end of that bit of power and dominance you've got over someone's life or over an economy.

[Interviewer]

Yeah.

[Greg Jackson]

And then you see that once people get an electric car, they start getting solar or powering from green energy or getting heat pumps and they can see the inevitable accelerating end of fossil fuels. And the reason we have this backlash is entirely driven by that existential threat. And the electric car is not only a big part of it, is the driver of it.

[Interviewer]

Right, right. Because, I mean, that is, it's got to be. I mean, I have sympathy with the fossil fuel industry, simply because what else are they going to do except stop what they've been doing for the last hundred years and completely change their business model, which is incredibly difficult when you've got that massive investment already embedded.

[Greg Jackson]

You know, I don't feel sorry for the market.

[Interviewer]

Okay. You don't?

[Greg Jackson]

No. And I think. Look, I. First of all, look, I'm not religious about this.

[Interviewer]

Yeah.

[Greg Jackson]

Octopus is the second biggest seller of gas to households. Right. You know, we do this. I think, though, what we've got to remember is that energy is such a phenomenally powerful industry. They've got all these lobbying forces to insist that we have a, you know, an orderly transition that we look after sort of the people in it. And of course, I want the people to do okay.

[Interviewer]

Yeah.

[Greg Jackson]

But Argos didn't get that when Amazon arrived.

[Interviewer]

No.

[Greg Jackson]

Right. And I think the move to electric vehicles is much more important than the move to online retail.

[Interviewer]

Yes.

[Greg Jackson]

Now, if we let. If we let rip on move to online retail, we should let rip on the move to clean energy into EVs. And instead, European governments are tripping over themselves to slow down the transition to protect their incumbent automakers. And look, as a consumer, I think that's pretty awful as someone who cares about the planet is terrible. And the tragedy is that the longer they try to extend the lives of those kind of outdated technologies, the more they're opening the gap between Europe, the US And China. China, which is investing like Billio in the new world. And I think if we're gonna do the right thing by the people, the people that work in these industries, what we need to do is let the transition happen rather than kind of deny it because eventually it'll burst like a dam. But if we let the transition happen, those people can be moving into great new jobs while they move from one highly relevant company to another. And, you know, 55% of the people that install our heat pumps used to be gas engineers. Right, right. And it's a great career progression, but it only happens if we let the transition happen, rather than if we try and guard the old industry or the old companies.

[Interviewer]

Well, in a sense, it's like, I mean, all the people I've spoken to who are working in offshore wind, all of the people I've ever spoken to who actually are working on an installation used to work in the oil and gas industry, offshore oil and gas.

[Greg Jackson]

And none of them would go back.

[Interviewer]

No, no, no. They don't want to get. I've done a windmill. I want to go back to that massive oil rig. Yes. That doesn't happen. I mean, because you've just been in China, so you've. Because I've never been. So you've seen it and we've heard a lot from Elliot who lives there and also we had Bono from BYD on Friday morning. But I mean if you. So you've seen firsthand that transition from our standpoint, because I haven't seen it, but I've heard a lot about it. I mean it was impressive.

[Greg Jackson]

I think mind blowing is the only word I went because I'd seen the data. But you want to see what's going on under the hood, what's really happening. So a few things that I think the west should really think about, the top level data is that western countries, the UK, Europe, America, accelerated to about 20% of end use of energy being electricity up to 10 years ago and they've stalled.

[Interviewer]

Right.

[Greg Jackson]

China's now at 33% and is accelerating. We've got used to this idea of China as being like dirty on energy. It's been building coal plants. I think this year is going to be peak coal for China. They are shifting away from it as fast as they were building it. 59% of all the renewable energy built in the world last year was in China.

[Interviewer]

Insane.

[Greg Jackson]

54% of all the cars sold in China so far this year are electric. It's heading to 60%. The Chinese state oil company predicts no filling stations will exist in China by 2045. By the way they operate the filling stations.

[Interviewer]

Right. And they're predicting there won't be any.

[Greg Jackson]

Won't be any by 20.

[Interviewer]

That's right.

[Greg Jackson]

And they're not doing this because they're nice people, although by the way, they may well be and if they're listening, but it's because they understand that energy is the primary input to industry. And now that renewables, the cheapest form of energy, their industrial competitiveness depends on the shift to renewables. But you know, the other thing that really struck me was on the streets of Shenzhen, Beijing, Shanghai, five or six years ago, everyone wore face masks. Not because of COVID No. But because of air pollution. It's all gone. I went from. I was in New York a couple of weeks ago. I'm pretty sure the air in New York was dirty than the air in Shenzhen.

[Interviewer]

Right, right.

[Greg Jackson]

And I think that for me epitomizes what's happening at the moment. There's a real risk that in 10, maybe even fewer years time we look like kind of middle income, underdeveloped economies because we're still burning stuff that we don't need to. And I think policy, in a way, it feels like the 1970s for those who are old enough to remember it. I am just honest. And in the 1970s, government in the UK kept trying to defend the existing car industry to the point it became so low quality, so shoddy and so expensive, it died. And what saved it was cooperating with Japanese. Not even saved, it just created a whole new one.

[Interviewer]

Yes.

[Greg Jackson]

Was cooperating with the Japanese companies in the 1980s that had started without all the legacy. And we have to make sure we don't do that to our economy and indeed to our industries.

[Interviewer]

Right, Yep. Very good point. Because, I mean, it is that it's worth. If you. I'm sure many of you have been, but if you haven't, it's worth a visit to the Gaydon Motor Museum and looking at a BMC car made in about 1972. And when people talk about panel gaps in Teslas, forget it. You know, these were just gaps.

[Greg Jackson]

I mean, you didn't need a door.

[Interviewer]

They barely had a panel. Yeah, no. Yes. It was not. Not a time of glory in this country. I just want to quickly say, because I'm sure there will be. Some of you would love to ask Greg a question. So there are microphones in the two aisles there. If you want to stand behind those. We'll come to you if we can. The timescale, I suppose the thing that I go in waves about is, oh, my God, this is all happening faster than I predicted. Or also, oh, my God, we're still grinding along on that. We've just about taken off, but we're about two feet above takeoff point. What do you see about that time scale? Are we ramping up that transition or is it stalling or is it going backwards or where are we standing at the moment?

[Greg Jackson]

I think some metrics are slower than we would like.

[Interviewer]

Right.

[Greg Jackson]

Others are flying. But underlying, the power of the transition is increasing.

[Interviewer]

Right.

[Greg Jackson]

And it's increasing because the phenomenal progress on cost, which means that, you know, someone was asking me earlier about, you know, what's the price of electricity going to be? You know, shall I get a battery or not? And honestly, I don't know.

[Interviewer]

Yeah.

[Greg Jackson]

Because in the short term, these things move around a lot, but underneath it all, you know, the cost of solar panels has halved in the last 18 months. Right, right. And it has already come down 200 fold over the last 40 years. Yeah, yeah. You know, you get to the point where if some Buildings, it's cheaper to put solar panels.

[Interviewer]

Oh, much cheaper than tiles. Tiles are really expensive. That's a luxury item now. Only the rich can afford tiles.

[Greg Jackson]

So when you look at it like that, it becomes sort of bizarre that we even have this conversation. When you look at the way things are at the moment, though, the current market structures are all designed around the energy market of the past. And so time and again, people like me and politicians will say, wind power is the cheapest form of power we've ever had. Let's build more wind. And that's true. But consumers don't see the benefit. And they don't see the benefit because we're trying to make wind behave like coal. So with coal you can turn a coal power station, you get a rectangle of power, you turn it off. With wind, it's kind of like when it's windy. We've got cheap power and we need to re engineer so much of our economy to use that renewable at the time it's been generated. So that, for example, that's when we're charging cars. It's what the intelligent tariffs do. But industry can work like that as well. And even things like data centers, AI, data centers have got much more discretion over how and when they use power.

[Interviewer]

Right.

[Greg Jackson]

But at the moment, our energy market, for example, the UK has a single national price every half hour. So if there's a supply constraint in the southeast of England, in London, that will set the national price at a higher rate.

[Interviewer]

Wow. But there could be buckets of very cheap energy coming from Scotland at the moment.

[Greg Jackson]

In Scotland it could be windy. In fact, it usually is. But the price to Scottish people will be the same as the one in London. Right. And we'll pay the wind turbines to turn off and we'll pay them the price that London is paying for its electricity.

[Interviewer]

Yeah.

[Greg Jackson]

So you're paying top dollar for no electricity, and the people who are using electricity are paying top dollar for it, even though they've got a wind farm next door isn't turning. That's mad. And I think what we need to be able to do. And by the way, it's mad that, I mean, someone who knows a lot about these things said to me, look, we just need to stop building wind farms in Scotland because we're building there because it's windy. Right?

[Interviewer]

Yeah.

[Greg Jackson]

And that might be an extreme view, by the way. I'm not advocating it, but as a characterization, we keep building where the subsidies are, not where the demand is.

[Interviewer]

Right.

[Greg Jackson]

If we build even though land in the southwest of England is more expensive. There's so much capacity in the southwest, if we've been. And it's not as windy there, but if we build a wind farm in the southwest of England, the electricity that you deliver to consumers will be 1.4 to 2.6 times cheaper than when we build it in Scotland.

[Interviewer]

Right.

[Greg Jackson]

But we just don't. At the moment, no one's benefiting from that. Not in the uk. Countries that are benefiting from it, like Scandinavia, where they've done this industry, is flocking to the north where they've got the cheapest electricity. Spain and Greece. I've literally had conversations with data center companies that are moving or building in Spain and Greece, not the uk because of cheap electricity, cheap renewable electricity. And so I think we need to understand that in the same way that when we built things like the steel industry, it was all built where you had cheap iron ore and cheap coal. In the same way, things like data centers need to be built where we've got cheap renewables. And again, if we had this market reform I'm talking about, Scotland would have been the cheapest electricity in Europe. The cheapest industry would flock there. And so I guess the big picture. And when we'd be investing in the right stuff in the southeast of England, we'd be doing cheap deals on solar panels because we need as much generation there as we can. We'd be building batteries and doing cheap deals on EVs, so we could manage that. Those constraints. And the moment we can't do any of this. And so the economics of energy mean that the investment in the uk, you know, we still have these conversations about investing into oil and gas and it being harder to invest into renewables. And the reason it's harder is the market is set up for the, you know, if the days of the past.

[Interviewer]

Yes, yes. I mean, and it's a very frustrating thing to hear that. I'm just seeing if there is no. There's no. No one wants to ask you a question, Greg. There we go. Who there? Is someone there?

[Greg Jackson]

One there?

[Interviewer]

Oh, my God. They're all.

[Greg Jackson]

They're all coming now.

[Interviewer]

Damn. I shouldn't have said anything. Yes, sir.

[Audience Member]

Yeah. I mean, when started, it was all the big six, you know, and you were there with the innovation, not just financial, but also the way that you've opened up tariffs so that people can connect with them, you know, and use like IFTT and things like that. Where do you see the innovation going in the future with Octopus Energy?

[Greg Jackson]

It's really interesting, this conversation having about the market is so important for exactly that question. I think we optimize people on the intelligent octopus tariff. Every car gets a different schedule every day. Optimize gets 29 variables, but 30% of the time we're actually doing it at the wrong time. If you look at the underlying physics of the system, because we're basing on the price the system's got rather than the real abundance of electricity in your location, I think the way energy needs to go is that we get more and more granular data. So if you live in the southwest of England and it's windy and some wind farms nearby, you're getting bonkers. Cheap electricity and your heat pump and your EV and your home battery are all optimizing against that. If we do that, we really can look forward to electricity prices falling every year. But it needs this granularity and it needs the digitization of the grid. So at the moment, I sometimes feel like a lot of the work we're doing is like we're trying to build kind of, I don't know, data centers at the end of a, a copper line, an old fashioned copper line. Right, because we just don't have enough information to do a good job. But back on that opening up, I think a large part of it is we can't do it all ourselves. And you know, we relentlessly invite other manufacturers, even other energy companies to use our technology because I think the speed of the energy transition, we've got to do this over the next 10 or 10, 15. I mean, it's already too late, but we need to accelerate and we can't do that alone.

[Interviewer]

I mean, I quickly like to, because I will come to the next question, but quickly like to mention Kraken, because that's something, I mean, it's something that I guess as the general public, as a consumer, we wouldn't be aware of, but that the success of that around the globe has been quite extraordinary. Can you do a brief explanation of what that does?

[Greg Jackson]

So about the team that started Octopus, we came from a technology background. We used to build enterprise software and actually from the outside of the energy industry, just as customers, we spotted the energy was running on really, really outdated technology. And that meant that people were paying too much, companies were bloated, inefficient, made too many mistakes, and service was terrible. But it also meant that they thought big data was a monthly meter reading, whereas doing some of these intelligent things we do, you might be doing 4,000 meterings a day for an individual household. And so we saw the Opportunity to build technology to fix this. That technology is called Kraken. We use it to build Octopus and then as Octopus got bigger, we license it to other companies. So I know it's Aeon next to here. They run on Kraken, EDF do in the uk. They're here too, I think. And. But also we license it around the world. So more than half of the value of Octopus as a group is actually Kraken.

[Interviewer]

Right, right. No, it is amazing. Yes, a question. Thank you. Yeah. We have a new government. What's your opinion, Greg, of their attitude to green energy? And Robert, did we invite anybody? And if we did, did they respond? And if not, why not? Yeah, you do. You first.

[Greg Jackson]

No.

[Interviewer]

Okay. I need to be told. I'm not sure, but yes.

[Greg Jackson]

A funny thing about my job is I used to be able to talk very candidly, like I was in the pub about these things. And then one day I discovered that people report what I say. However, I'm gonna be very candid anyway, which is, first of all, I was over the moon. Of their five missions, the second one was about green energy. There were attempts to turn the green energy into a culture war before the election, especially after the Uxbridge Ulez kind of blown out of all proportion nonsense. Yeah. I was glad they had the confidence to do that. And they won after doing that because I think most people know that green energy is the route to cheap and more secure energy. And we can't Forget it's only two or three years since the government had spent 100 billion quid because of the gas crisis. Yeah.

[Interviewer]

And I think, I mean, I just wanted to say, I think the general public, everyone knows that the electricity prices went up because of gas, not because of offshore wind or solar panels.

[Greg Jackson]

Yeah. And the wholesale price, gas is still three times higher than it was in 2020, which is why bills are still roughly double what they were. I think the other quick thing though is the government came out the traps, delivering on their promise with all the announcements they made about planning. And that's going to be crucial for building renewable infrastructure. I think now what we need to see is continued bravery. It's a bit like in motor racing, when you hit the gravel, you really slow down. And they need to be able to accelerate through this gravel of government and they need to accelerate with grid reforms. We can connect stuff. I think there are going to be announcements on that early in the new year and crucial market reform so that consumers see the benefit that we have to give consumers the benefit. If you get a Wind farm, particularly near you, Prices come down. We've got to see that.

[Interviewer]

Great, thank you. Yes, sir.

[Greg Jackson]

Did you invite them?

[Interviewer]

Oh, sir, I don't know. We didn't, no. We didn't invite anyone, did we? No, we didn't invite anyone and they didn't say no. So maybe we should in future. Yes, we should, I think, but it's. Yeah, I mean, I think we've always tried to sort of skim around. Very obvious party politics, just as, you know, it's. Yeah, I mean. Well, we had a visit from the Transport Minister. Whose name? The Tory one. What's his name? Grant. My mate, Grant.

[Greg Jackson]

Grant Shapps.

[Interviewer]

Grant Shapps. We're great mates. We walked arm in arm around the show. Yes, sir.

[Greg Jackson]

Hi, Greg. Obviously, all the good things you've been saying you and Octopus are doing to try and speed up this transition, all amazing. So, apart from everybody using Octopus stuff, what else can kind of normal people or individuals actually do to help this progression? You know, first of all, can I say something really controversial? I get asked this a lot and it's a trick of the fossil fuel industry is to try and put the blame for carbon back on consumers. Right, yes, well said, Greg, well said. And I hope that doesn't sound too cynical. But, you know, the reality is that consumers respond to price signals and we need to keep making the clean solutions the cheapest and the best. And that's why I'm so focused on the stuff we're talking about today. But, you know, and the crying tragedy when we kind of blame individuals is people get obsessed over whether a coffee cup's got a plastic lid. And of course it's terrible when we see plastic in the. In the Pacific or whatever. Right. But, you know, the things that are really doing the most damage in the world are burning stuff on a massive scale. And so the most important things we can do are move to an electric car. Well, in fact, obviously no car at all, if you can. But I mean, I'm not going to advocate because again, the more we say things like that, the more the, you know, people who don't like saving the planet will say, these people are telling you, you know, you have freedom of choice or whatever. Yeah. So I think actually the biggest job is on companies like us to say it's our job to make it so you can live the life you want, but without doing the damage. And so actually coming back to your opening and thinking about it, switch to Octopus. Help us in this mission. Yes, but not just us. I mean, I think that really does apply. But honestly, let's put the blame on companies because they're the ones that have got the lobby. So one thing that happens a lot, a lot of people in the engine will get quite grumpy when I lobby for things like locational pricing, because they really enjoy getting paid not to generate wind. They enjoy subsys rather than having to work hard to cut prices. And they get really grumpy that we say these things. Right. But a minister said to me, greg, why are so many of the industry like the opposite side for you? And I said, well, look, the industry enjoying what they're getting. There's no one lobbying for consumers. You know, one company that is on the other side of them is employ 150 people in lobbying. Right?

[Interviewer]

Yeah.

[Greg Jackson]

Now imagine how powerful that is. And they wouldn't be doing it if they weren't getting a return on it. So, yeah, I think the most important thing we can do is actually like, shift to clean energy solutions, but most importantly, push back against that cynical lobbying.

[Interviewer]

Here, here. Yes, sir.

[Audience Member]

Hi, good morning. Gonna switch the conversation to microgeneration. So the absence of wind as a micro generating source, there is technology a lot in Holland don't see that in the uk, Greg. And also vehicle to grid charging. I think some of the problems we're having on storage can also be solved through being able to power back to the home from vehicles. So basically, dare I say, a Duracell on wheels. Where do you see those two technologies delivering in probably the short term, not the longer term?

[Greg Jackson]

Yeah, great. So I really don't know enough about micro generation of wind other than our boffins. Tell me the challenge is it's not usually so windy close to the ground, and the power of a wind turbine is proportional to the square of the length of the blades. And so you really, really want big blades. But honestly, I don't know enough beyond that on vehicle to grid. It's coming and it is an absolute game changer. When we've got 10 million electric cars in the UK with vehicle to grid that can power the whole of the UK at peak time. It's a big part of the answer to the question, what do you do when it's not windy and when it's not sunny? And today an example of that power is, I think, for people who've got it already, we give them 13,000 miles a year of free charging. And that's not because we're nice people, it's because the economics of the variability on the grid make that work. And it's only Going to get bigger with more renewables in terms of when it's coming. At the moment there's not that many cars can do it and there's a chicken and egg problem in many countries around the world. It's virtually illegal to do it in Germany and so many countries in the world, regulation has held back the ability for consumers to do it, which means the car companies haven't put it in the cars. But when we were with BYD in their HQ six weeks ago, you know, we were talking to them about kind of look, the need now to put it back. They actually had it originally and they took it out because no one was using it. I think they'll be putting it back and then we just need to get the cost of the charges down. At the moment, vehicle to grid charges are far too expensive. That's just volume. The actual underlying power electrics is not particularly complicated. So I think over the next five years or so it'll become pretty normal.

[Interviewer]

Just want to quickly say I've just been with Renault in Paris and all their new models now come with bidirectional. It's built into the car from the ground up. So that is, I think it is definitely coming. I'm just trying to be fair in doing sides. We probably only got time for one more, but let's try it. Yes, sir.

[Audience Member]

Hello. I live on a fairly low income, about 26,000 of which just over 50% is from an occupational pension and about 40% is from pay for a part time job and the remainder being private income. And I was wondering how people like me are going to be able to transition to electric cars because I would very much like to have an electric car. Hyundai Insta particularly appeals to me as a car that would fit in my garage and living in Bristol where parking is almost impossible. The garage is essential for parking a car.

[Greg Jackson]

Great. Robert, can I beg you? There are three people standing there. If they're all asking, answer them all in one go really quickly just so that otherwise it's terrible.

[Interviewer]

Oh, okay, that's good. Yeah, go on.

[Audience Member]

Building on this whole democratization of energy thing and the macro down to the micro in between you've got these community structured things. Obviously I'm here with Co Charger, but also one of my favorite companies, Ripple are over there. One of the best things I've ever heard of and I know that's it's integrated into what you're doing, which I find fascinating. It sort of bridges what we're saying here about, you know, what can I do on My house to what's the corporation doing? Just anything you can tell us about that integration and the role that these community things have got in this ecosystem.

[Interviewer]

Magic I think. Just answer those sorry guys.

[Greg Jackson]

Right, really quick then. And the answer partly comes together on affordable electric cars. The cost of batteries is falling at 13% a year and there are more technology breakthroughs to come that will create big step changes. It means that the cost of a brand new electric car has been falling precipitously by the way. Lots of people in the industry worry about that. But of course what matters is that makes them more and more affordable which is a great thing for consumers. And also we had no second hand market in electric cars until very recently. So between the falling cost of new cars and the emergence of second hand ones as the first fleets are being recycled, I think you're going to find electric cars cheaper than petrol cars for many models like literally in the next year or so many models are in price parity. We've got to say, we've got to stop governments trying to protect incumbent into massive through massive tariffs. In China it's 20% cheaper to buy an electric car than a petrol than the equivalent petrol. And we need to see the same differential here and grow. And the reason I say there's a connection is they're already six times cheaper to run. If you can charge at home, which sounds like you can, you can do. Yeah. And that's coming because of this ability for us to take every source of electricity, whether it be local generators, microgenerators, community generators as well as of course the big national grid stuff. And the reason we need the market reform I talked about is it lets us grab the cheapest electricity the cheapest times and squirt into cars and we'll work really hard with all of that ecosystem to keep building out because the cheapest electron is a locally generated renewable one at the time it's been generated.

[Interviewer]

And I just want to quickly say to add onto that that there are now numerous leasing companies that are leasing secondhand cars that incredib lower rates than it would have been even three or four years ago. So there are, it's worth, I mean they'll be here, it's worth having an ask around.

[Greg Jackson]

There's actually one just over there, it's called Octopus electric vehicles and they'll give you a smart tire found a charger while they're at it.

[Interviewer]

Smart tire found a charger. Well there you go.

[Audience Member]

I am an octopus customer and but the Insta is the first car that will Fit in my garage. Yeah, from the electric.

[Interviewer]

No, it's a great car. No, thank you very much.

[Greg Jackson]

Thank you.

[Interviewer]

I don't really. Well, we can try. Let's try one more. We've got time for one more. We've go to you, sir.

[Audience Member]

Yeah, thank you. Hey Greg, I was wondering, do you think there's still a need for there to be a price on the negative externalities of fossil fuel energy and on the localized pricing thing? If it's like a regulation problem in this country at least can you not have like communities that at least make their own closed loop generation and battery storage before it goes back into the grid?

[Greg Jackson]

Great questions. So first of all on pricing carbon, I've seen quite people seen the movie Don't look up, which you expect is going to be very worthy, but actually is a great watch. And the tragedy of it is even as the meteor is looming over earth, politicians are still denying it. Self interested groups are denying it. Right. And I think the challenge we work with carbon is kind of around the world. There are so many intricate workarounds to have voluntary carbon trading schemes and emission trade. We just need a carbon tax really. But the reality is that governments around the world are scared to do it because of the incredible lobbying interests that prevent that. If we had a carbon tax, electricity would already clean, energy would already be absolutely cleaning up. But they do all these little rabbit hole workarounds instead. And then about creating micro grids, they're actually really hard from a regulatory point of view. Ofgem's regulation opens with word. OFGEM regulates the supply of electricity through wires. So as soon as you got wires involved, then you got regulation. There are things we can do and we work with developers on small scales, but it is honestly incredibly complicated. I'm sorry, because the time we can't go. But basically as soon as electricity hits any part of the regulated network, it roughly trebles in cost because of all of the regulatory costs and the outdated market mechanisms. And that is a killer.

[Interviewer]

Ladies and gentlemen. I think we have to admit that this was a fantastic opportunity for us to hear Greg's thoughts on this too. And I'd like to give you enormous support for what you're doing. And I want you to keep going into government and giving them headaches and making them anxious and worried and depressed because what you're saying is right and we all need to support you on doing that. And it's fantastic to have you here. Thank you very much to Greg Jackson, ladies and gentlemen. Thank you.