Octopus Energy Generation invest $1bn into Californian clean tech

UK clean energy giant Octopus Energy Generation is investing nearly $1 billion into Californian companies and projects spanning energy storage, carbon removal and solar and battery tech.

Through its funds, Octopus will back two Californian carbon removal companies pioneering grassland restoration and reforestation to transform degraded land into high-quality CO2-absorbing assets – with several big tech companies already lined up as carbon credit offtakers.

The newly unlocked funding will also invest in heat batteries to fast-track the decarbonisation of hard-to-electrify industries. Developed in the innovation-driven Bay Area, the tech allows swapping fossil-fuel boilers with systems powered by renewable energy.

Additionally, Octopus will acquire a solar and battery project in California, aiming to help turn the state’s abundant sunshine into clean, cheap power. The project is expected to become fully operational by July 2026.

Commenting in a release was Zoisa North-Bond, Octopus Energy Generation’s Chief Executive Officer: “Octopus and California are both leading the way in clean energy innovation. With supportive policy and world-class entrepreneurship in and around Silicon Valley, it’s an ideal place to back long-term investment partnerships that will benefit the UK economy.

“We’re excited to expand Octopus internationally, backing the booming US clean tech sector while bringing innovation, growth and returns to the UK.”

With the aim of deploying $2 billion into the US market by 2030, the investment builds on Octopus’s previous investments in state-side clean tech infrastructure.

Octopus first set foot in the US in 2020 in Houston, Texas, with the launch of its retail energy business, closely followed by the launch of its US electric vehicles (EV) leasing arm. The company has also brought its smart tariffs to the market and in 2024 announced their first push into the country’s renewables sector with the acquisition of two solar firms.

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A transatlantic MoU

This latest investment coincides with Californian Governer Gavin Newsom’s visit to the UK, signing an MoU to create a refreshed framework to drive innovation, scale up clean energy technologies and connect businesses and researchers across both economies.

According to the UK government in a release, the agreement will connect the country’s clean energy sector with the Californian market, opening up new export opportunities, citing companies like Octopus Energy already expanding on the West Coast.

In terms of clean energy tech and energy systems, the MoU will see the two cooperate on a number of initiatives. These include:

• Offshore wind development and low-carbon hydrogen
• Energy storage, including long duration technologies
• Grid modernisation, reliability, and efficiency
• Decarbonisation of buildings
• Research, innovation, entrepreneurship, and academic cooperation on AI, quantum technology, and fusion

Additionally, the two will cooperate in the financing of clean energy and climate resilience by accelerating climate investments, particularly to help scale early-stage clean energy technologies and on climate risk insurance for extreme weather events.

The MoU also extends to carbon management and super pollutants across the areas of emissions trading and carbon markets, carbon capture utilisation and storage, greenhouse gas removals, and methane emissions reduction.

Additionally, it covers the area of transport decarbonisation, such as through zero emissions vehicles, low carbon fuels and aviation and maritime decarbonisation.

The MoU builds on others signed by the UK focused on economic cooperation with 11 other US states, including Washington and Florida.

Nick Chaset, CEO at Octopus Energy US, said: “As a British tech business and investor growing in the US, this MoU opens up opportunities to bring our smart technology to California, cutting energy bills and improving the customer experience.”

Chaset cited their work with Southern California Edison, where the Octopus Shift application is used to tap into EVs and home batteries in support of the power grid.

“This agreement gives investors like Octopus greater confidence to bring more of our proven technology to the state, like Octopus Electroverse. Already the world’s largest public charging platform, live across 1.3 million chargers in 50 countries. It is exactly the kind of customer-first innovation we are excited to scale through closer UK-California collaboration.”

Said Newsom in a release: “California is the best place in America to invest in a clean economy because we set clear goals and we deliver. 

“Today, we deepened our partnership with the United Kingdom on climate action and welcomed nearly a billion dollars in clean tech investment from Octopus Energy. California will continue showing the world how we can turn innovation and ambition into climate action.”

In reaction to California-UK deal, US President Donald Trump criticised the news in an interview with Politico.

Trump warned British leaders against dealing with Newsom, saying “his state has gone to hell, and his environmental work is a disaster.”

Trump added that it was “inappropriate” for Newsom to strike such agreements and “inappropriate for them to be dealing with him.”

Trump, who has frequently mocked wind energy and taken aim at Newsom’s stewardship of the nation’s most populous state, warned that the deal would backfire for Britain.