May 9, 2023

Octopus Energy CEO Greg Jackson on ChatGPT, hydrogen heating and climate subsidies

The green energy supplier is answering a third of all customer enquiries with AI

Eleanor Warnock

4 min read

UK green energy supplier Octopus Energy is one of Europe’s most successful new energy companies. It’s grown to be one the UK’s largest household energy companies, weathering a crisis that has felled rival startups, and expanded its footprint from Japan to Spain.

As well as selling gas and electricity for homes, the company also installs heat pumps and solar panels, leases electric vehicles and licenses its tech platform, Kraken, to other energy companies.

Speaking at the Lazard T500 conference in London, founder and CEO Greg Jackson touched on integrating AI into customer service, where he thinks hydrogen should and shouldn’t be used and what he would be backing if he were a climate investor. His comments have been lightly edited for clarity.


On integrating AI into Octopus Energy’s operations post-Chat GPT

"We started trialling [AI] with a handful of customer emails with a person supervising it [in] February. By the end of April, it was answering 34% of all customer queries. That's the work of 250 people in the UK alone — and it is doing it with an 80% satisfaction rating. Humans get 65%.

"The first thing is just getting ready for this degree of economic dislocation and thinking — as governments, as investors, as economic actors — what the implications are. I think the second thing was recognising that we’re a benign company, but it’s going to get in the hands of bad people as well. How do you deal with that? The third [thing] is, we really are unleashing this kind of global super intelligence, and today we’re in charge. It’s not obvious how that will end."

On overseas growth

"We're present in eight of the ten biggest competitive energy markets in the world and that's where our next phase of growth is focused. On the licensing side, the great opportunity is we enter a market as our own brand, [which] de-risks cracking that market for licensees who then follow. So we'll see a slew of licensees in markets we operate in.

"I hope in a day or two there will be more announcements about Kraken licensing deals that will take it into the 30 or 40m accounts."

On where to use hydrogen

"Steel-making and possibly aviation. Definitely not heating. The UK is one of the few countries in the world that has this weird existential battle about using hydrogen to heat people’s homes.

"A heat pump turns one kilowatt of electricity into three kilowatts of heat or four — depending on technology. Whereas green hydrogen turns one kilowatt of electricity into — if you're lucky — 0.4 kilowatts of heat. And by the way, you've got to keep the world's smallest molecule inside pipes every bit of that journey, sometimes under pressure… That’s why we get delays from fuel leaks launching rockets. All forms of hydrogen suffer from the same thing — they can’t do what green electrons can do in a heat pump."

The risks of what could happen post-energy crisis

"The bigger question really is does [the energy crisis] lock in a greater determination on countries to decarbonise or is it like a diet, where the moment you think the weight's come off, you go back on the pies? I think there's a real risk of that.

"You see an awful lot of stuff from us and from others saying that thanks to planning, permitting and the monopoly grids and networks, it is very hard to build new renewable assets. We've got a solar farm we're going to build in the north of England, and we won't get connection to that until 2036; I'm probably going to be dead by then. Meanwhile, in Germany, in one year, they built five liquid natural gas terminals. There is still this problem; I think our political sphere is in thrall to oil and gas."

If he was a climate investor where would he invest?

"I think basically in electrification. But the challenge we’ve got in all climate stuff is government involvement. Because if we investigate the stuff the government’s currently backing and it’s irrational, then one day we may start backing it. I think the genuine challenge is looking at past government involvement and working out, ‘What were the right policy regimes?’

"Obviously, the IRA [the US’s climate-subsidising legislation] has massively changed the landscape. Looking at European responses — if you look under the hood, so much of that is distorted spending and is not necessarily spending on stuff that’s going to make a difference."


Eleanor Warnock

Eleanor Warnock was Sifted’s deputy editor and cohost of Startup Europe — The Sifted Podcast. Find her on X and LinkedIn