Octopus Energy to buy troubled renewable energy supplier Bulb
Wind farm in UK. Author: JAK SIE MASZ. License: Creative Commons, Attribution-ShareAlike 2.0 Generic.
UK renewable energy retailer Octopus Energy Group has sealed a deal to take over troubled local peer Bulb which was placed into special administration in November 2021, the parties announced over the weekend.
Bulb, which is currently run by the government, offers 100% renewable electricity bought on the wholesale energy market. It serves 1.5 million customers.
“We’re taking responsibility for Bulb’s customers, providing good value for taxpayers and ending an uncertain time for Bulb’s members and team,” Octopus said in a statement on its website.
Octopus is paying the government what it believes to be “a higher amount per customer than suppliers typically paid to take on any of the 29 suppliers who have failed since September 2021.“
The specific financial details of the transaction were not disclosed. Octopus, however, is said to be paying between GBP 100 million (USD 115.5m/EUR 116.1m) and GBP 200 million, according to a BBC report.
The British firm collapsed into administration at the end of last year due to soaring gas and electricity prices. About a month later, it agreed to sell its Spain-based unit to local renewable power retailer Holaluz Clidom SA (BME:HLZ).
Due to high market volatility, it is impossible to fully forecast the true cost of the Bulb special administration regime (SAR), the UK government noted in its Saturday statement. The rescue, however, has cost taxpayers more than GBP 4 billion, according to the Financial Times.
The transaction between Octopus and Bulb has been approved by the UK government. The process still needs to be cleared by the Business and Energy Secretary and will take effect at a time ordered by the High Court, expected by the end of November, the British government said.