Octopus Energy on investing in renewable energy to tackle the energy crisis

Octopus Energy is a global clean energy pioneer focused on using technology to unlock customer-focused, affordable green energy. Its custom-built cloud platform, Kraken, provides Octopus Energy customers with unprecedented visibility into, and control over, their energy usage. Founded in 2015, the company today supports over 20 million customers globally.

We spoke with Michael Lee, CEO of Octopus Energy US, about the move toward a decentralised energy grid, the way renewables are giving consumers more control over when and how they use electricity, and how Stripe provides customers around the world with more ways to pay for the energy they consume.

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What is your team currently focused on?

In the US, we’ve shifted so that about half of our operations team is supporting global customers. This is in response to inflation. While we have seen energy inflation in the US, it has been even more pronounced in other global markets. Our team can temporarily support customers in other countries, which means our customers can receive support on various issues 24 hours a day. On the tech side, we’re enhancing the features of Kraken, our proprietary cloud platform, as we prepare for more external licensing opportunities, and we’re growing into new states.

How does Kraken work?

Octopus Energy runs on Kraken. We purpose-built it for energy customers, and the businesses that serve them, to enable a totally customer-centric culture while delivering rapid organisational transformation and future energy capabilities. Kraken’s technology and unique operating model tackle the multitude of future energy challenges through one integrated platform and blueprint.

How is Octopus Energy supporting customers through the energy crisis?

We’ve seen bills in the US increase 25–100% over typical amounts. This is compounded by climate change – with more extreme weather events, customers will use more energy to keep cool in the summer and warm in the winter.

We’ve launched services such as Intelligent Octopus, which helps customers understand when to use energy to save both money and reserve resources when the grid is at peak demand. In addition, we’ve tested Turn Up, Turn Out programmes, which encourage customers to raise their thermostats by three degrees during high temperature hours in exchange for bill credit. We’ve also dedicated a lot of our time to building a mobile app and encouraging customers to opt in to real-time alerts so they know when is the best time to use energy or to reserve.

In the UK, the team has created a £15m fund to directly help customers in financial hardship and is looking at more innovative ways to save money, such as providing free electric blankets and renting out thermal imaging cameras to help customers insulate their homes from extreme weather.

Where do you think the energy industry can improve to deliver a better experience for consumers?

The future of the energy grid is decentralised. However, the grid of today looks a lot like the grid of 100 years ago, built around massive power plants that have large transmission lines crossing the countryside. This is a historical artefact of the need for economies of scale with a coal plant.

The future grid will feature energy production proximate to where customers actually use power. But this means energy companies need to become much more consumer friendly. We can’t be using the energy jargon of electrical engineering – we need to create an easy experience for customers to engage with the modern energy economy.

How does your recently launched US Octopus Electric Vehicles (OEV) advance your overall mission to make renewable energy affordable and accessible?

We were granted a dealership licence by the state of Texas, and we think we’re the first energy company to have one. This allows us to put the lease for electric vehicles on the same bill as the electricity used for charging. This is really exciting for customers because as we smart-control the vehicle for charging, we can ensure that customers are getting the lowest total cost for an EV experience. We’ll be rolling out the EV product as the energy business expands into more states in the coming months.

How has Octopus Energy approached payments as you’ve expanded into global markets?

Initially, our platform needed to support a single channel for making payments: direct debit. However, as we expanded into other countries and licensed Kraken to other energy companies, we needed to support a growing number of different channels, such as card, bank transfer, and over-the-counter vendors, such as Stripe.

To make this easier, we developed Cashflow, a framework that provides pluggable integrations with payment systems. Developers are able to configure a few simple things, such as the format in which incoming payment-related messages are received. The framework has allowed us to grow Kraken to integrate around 25 different payment channels in a consistent manner and with minimal development effort.

What is your proudest accomplishment at Octopus Energy?

I’m very proud of the team for launching Intelligent Octopus in the US. This is an intelligent energy product that helps customers save money by optimising in the background how and when energy is consumed. As we build out more and more renewables on the grid, we need tools to optimise when energy is consumed to match when wind and solar are most abundant.

Octopus Energy offers two payment models: pay-as-you-go and monthly billing. Do you see one used more than the other?

They both have their value and it depends on the customer’s preference. Many customers are used to a postpaid monthly billing product – one in which they use electricity all month long and then get a bill the following month. The downside to this is that it can be hard to keep a handle on your usage because the feedback loop between high usage and high bills can take a long time.

Pay-as-you-go products are really helpful to shorten that feedback loop and maximise control of your expenses. It helps put the control back into the hands of the customers because they see the impact of their daily usage and can make decisions faster about adjusting their usage.

Where do you get the most value from Stripe?

Stripe's API is such a pleasure to work with. You have some of the best documentation I've ever come across and it’s been very easy to get time with your technical staff. Payments are such an important part of our execution and it’s a valuable time saver to be able to quickly and securely connect to Stripe’s API so we can spend most of our time building a comprehensive Kraken platform and not spend our valuable engineering time on payments.

Another major benefit of Stripe is that, like us, you are a global business. That makes using Stripe inside of Kraken much easier because our global group of developers can build solutions that work across oceans and country lines.

How do you see your partnership with Stripe evolving?

We'll continue to learn from each other. It’s very important for us to have seamless customer experiences, including the customer’s ability to pay their bills. Stripe’s team has been open to feedback to ensure that our customers have the lowest friction experience when making payments.

Stripe has always been very open to talking with us about upcoming projects and even offering us the ability to kick the tyres of new technology. Kraken is constantly pushing the boundaries of energy technology, and I think we'll continue to do this and provide feedback to Stripe.

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