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Octopus makes first strides into energy networks sector with Eclipse Power investment

Image: Eclipse Power.

Image: Eclipse Power.

Octopus Investments has made a multi-million-pound investment in independent Distribution Network Operator (IDNO) Eclipse Power, marking its maiden investment in the networks sector.

Octopus, which is already the largest asset holder of UK solar farms and is the parent company of challenger supplier Octopus Energy, said the investment would allow it to expand its operations base and make further investments into the country’s electricity infrastructure.

It also spoke of the potential for IDNOs to play “an important role” in furthering the electrification of heat and transport through cost-efficient grid reinforcement works, with Eclipse Power expected to connect more than 25,000 customers in the coming years.

Octopus’ investment is to be used to secure additional networks and Gary Gay, managing director and founder at Eclipse, described Octopus as the “perfect partner” to enable his company to develop further.

Founded in 2015, Eclipse gained an IDNO operational licence from Ofgem a year later and commenced trading last year. So far it has amassed more than 1,000 customers.

Eclipse Power is the sister company of independent connection provider G2 Energy, and its IDNO licence is issued under the G2 Energy IDNO trading name.

Although fledgling, the IDNO space is expected to become more competitive as energy firms explore different options to the existing DNO connection process. G2 Energy/Eclipse Power is one of just 13 currently licensed IDNOs in the space, with the likes of Vattenfall Network and Fulcrum Electricity Assets competing in the space.

IDNOs are regulated in much the same way as regular network operators without all the conditions of a DNO licence. Ofgem, as the industry regulator, sets the amounts that IDNOs can charge to be connected via a relative price control mechanism.

Matt Setchell, co-head of energy investments at Octopus, said: “This investment provides Octopus with access to a fast-changing part of the UK energy system’s value chain and further underlines our commitment to supporting the progress of the energy transition, whilst providing substantial and stable returns for our investors.

“We are also excited about Eclipse Power working with many of the different parts of Octopus to drive growth including property, transport and healthcare, whose need for timely and cost-efficient connections is fundamental to their business models.”

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