Octopus Energy has become Britain’s largest household energy supplier for the first time, toppling British Gas almost four decades after it was privatised under Margaret Thatcher.
The energy company grew its share of the market to 23.7% of households in Great Britain by the end of last year, according to latest figures, less than a decade after it was founded by its chief executive, Greg Jackson.
Octopus confirmed that it gained almost 1m new gas and electricity accounts from its rivals last year alone. It now has 12.9m domestic accounts across gas and electricity, and serves 7.3 million households.
The report, by the influential energy consultancy Cornwall Insight, showed that the next largest energy supplier, which is understood to be British Gas, held a 23.1% share of the market, or 320,000 fewer accounts than Octopus.
Dan Morris, the chief executive of Cornwall Insight, said the toppling of British Gas from its leading position in the market was “quite honestly the biggest development in the domestic retail energy market since it opened”.
British Gas was privatised in 1986 through the “Tell Sid” marketing campaign, which encouraged the public to buy shares in the company. The electricity board was separately broken up and privatised in the early 1990s.
Octopus was founded in 2015 and grew as the government and the energy regulator for Great Britain, Ofgem, pushed to open up the market beyond the then big six players: British Gas, EDF, E.ON, npower, ScottishPower and SSE.
The drive allowed a cluster of new companies to launch, although the strategy was criticised when 29 went bust as gas prices soared from late 2021, including Bulb Energy.
Bulb, the biggest company to collapse, was snapped up out of a government-backed administration by Octopus in 2022, giving it 1.3 million customers overnight. Its rivals contested the deal in court but lost their legal challenge. Octopus, which counts a fund backed by the former US vice-president Al Gore among its investors, subsequently repaid the government almost £3bn for the cost of the bailout late last year.
Morris said: “Octopus Energy started from zero market share in 2015 and has worked its way up to the top spot on this measure in less than a decade. This is a notable achievement in the highly competitive and tightly regulated UK supplier market.”
The Cornwall report did not provide updated customer numbers for individual suppliers, aside from Octopus, or name the next largest suppliers that each hold shares of between 8% and 15% of the market. However, older data published by the industry regulator suggests that the list would probably include E.ON, Ovo, EDF Energy and ScottishPower.
Jackson started his career at the consumer goods company Procter & Gamble before running businesses including a coffee shop and a mirror manufacturer. He sold a customer relationship tech business for £4.5m in 2006.
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He built Octopus from a UK startup to a company present in 18 countries, and it was valued at £9bn last year. Its success is widely attributed to the company’s bespoke software, Kraken, which allows the supplier to offer tariffs that take advantage of real-time electricity price fluctuations to lower bills.
The company has licensed Kraken for use by other energy suppliers including E.ON, EDF and Good Energy in the UK. The software is also used in other countries by energy suppliers including Tokyo Gas in Japan and Origin Energy in Australia.
Octopus Energy serves 60m accounts through Kraken, and it expects to reach 100m accounts within the next two years. Jackson said the company had “invested heavily in technology” to deliver “this rare combination of rapid growth and outstanding service”.
British Gas declined to comment on Octopus Energy’s ascent to market leader. It is likely to be viewed as another major blow to Chris O’Shea, the chief executive of the supplier’s parent company Centrica, after the supplier was embroiled in scandal over its force-fitting of prepay meters in the homes of vulnerable adults and children.
The Guardian revealed earlier this year that British Gas was the industry ombudsman’s most complained-about supplier in 2024, even when adjusted for the size of its customer base.
