In this episode, I chat with Nick Chaset, CEO of Octopus Energy US, about bringing the company’s customer-focused, tech-forward model to America. We get into the details of how Octopus simplifies home energy management for its retail customers and its plan to help regulated utilities do the same. We also touch on ambitious ideas like the “Zero Bills” home and how to build gigawatt-scale virtual power plants that benefit both consumers and the grid.
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David Roberts
Hello, everyone. This is Volts for November 7, 2025, “Octopus extends its tentacles into America.” I’m your host, David Roberts. In the energy world, one of the biggest success stories of the past decade has been Octopus Energy, which was founded in 2016 as a retail energy provider in the UK. It distinguished itself by foregrounding distributed energy, renewable energy, and demand response, and by focusing relentlessly on customer service. It spread rapidly and, eight years later, in 2024, became the UK’s single largest domestic electricity supplier.
In the interim, it has also set up operations in several other countries. In 2023 it raised $800 million to fuel global expansion; it now operates across France, Germany, Spain, Japan, New Zealand, and Australia. The company has expanded from energy retail into several other business verticals. Most notably, it developed an operating system to manage customers and their devices called Kraken, which it licenses to utilities. Additionally, Octopus has tentacles in energy generation, energy services, EV leasing, EV charging, and more.
The company’s biggest challenge yet may be conquering the US. It has had a toehold in US retail markets for several years now, but as Volts listeners likely know, there aren’t very many competitive retail energy markets in the US. A large portion of the electricity system is dominated by vertically integrated utilities, so Octopus is learning how to work with them.
Today, I am going to talk with Nick Chaset, the CEO of Octopus Energy US, about the challenges of the US market, how he plans to work with regulated utilities, the state of distributed energy and VPP markets, and much more.
With no further ado, Nick Chaset, welcome to Volts. Thank you so much for coming.
Nick Chaset
Great to be here, Dave.
David Roberts
This is awesome. Before we jump in, I want to wrap my head around Octopus. It’s remarkable; every time I check in, there’s some giant new thing. Let me get this straight in my head. There’s Octopus, there’s Octopus US, and then there’s Kraken, which, as I understand it, is becoming or is now already its own independent company. How independent is independent for Kraken? Is it still part of Octopus?
Nick Chaset
Today, Kraken is still part of Octopus Energy Group, but we are going through the process of demerging the two.
David Roberts
Interesting. It will be an entirely freestanding—
Nick Chaset
It’ll be an entirely freestanding company. Today, Kraken is wholly independent from Octopus Energy, the retail supplier. They’re two wholly separate companies, but both wholly owned by Octopus Energy Group. Both are part of the Octopus Energy Group. The process we are going through now with Kraken is to spin Kraken out to be a wholly independent company.
David Roberts
No longer part of Octopus Group, then.
Nick Chaset
Correct. From a shareholder perspective, you may have shared shareholders, but a really independent company that can operate as such.
David Roberts
When I was first reading about this, when I think about Octopus coming to the US, as you just said, there’s not a lot of — I know you’re in the retail energy business in Texas, for instance. Texas is the big one in the US, but that’s limited and most of the US is not that. For most of the US, you’re dealing with big vertically integrated utilities, and I understand that you can just offer them Kraken to use for themselves. But then what is Octopus US? I guess that’s what I’m trying to clarify here — what is Octopus US specifically?
Nick Chaset
Yeah, Octopus US is pursuing a dual strategy. In Texas today, we serve electricity consumers directly with all of the amazing services and capabilities that we provide to our customers globally. We’ll get into that. Outside of Texas, Octopus is providing “flexibility as a service.” Our view of the world — my view of the world — is that one of the reasons why VPPs and flexibility struggle to scale is it is a muddled ecosystem of lots of different players. If you’re a homeowner and you want to save money on your bill with the time-of-use rate you have, for instance, you very likely are going to have to do something in your app for your thermostat.
There’s a separate app that you have to download for your EV. There might be a third app that you have to engage with for your battery. Then you still have to go to a fourth app or website to figure out what rate you’re on. If you’re a utility, you have to manage all of these different endpoints, and then you probably have a separate vendor to do—
David Roberts
The aggregator, don’t forget the aggregator.
Nick Chaset
There’s the aggregator, then there’s also the DERMS provider. Suddenly you’re in a world where you have many different players and each one of them is taking a little piece. That destroys a lot of the value of flexibility from a cost-effectiveness perspective for utility and a consumer perspective. It makes it exceedingly difficult for individual consumers to participate. The theory of the world of Octopus is we engage with our 10 million plus retail electricity customers every single day around their entire home, every device in the home.
We do so through our Octopus app. We’ve figured out and we understand how consumers engage with energy and the devices in their home.
David Roberts
Let’s talk about the retail business. I want to get back to the regulated utility stuff and the flexibility as a service, but first let’s talk about your bread and butter, which is this retail business. From the beginning, I think the value proposition was “We’re going to do this distributed energy stuff, but we’re going to make it easy for consumers.” If I’m in Texas and I sign up for Octopus, what does that mean? What do you do for me? What devices are you wrangling? What is my interface, who am I interfacing with, who am I dealing with?
Nick Chaset
Typically in Texas, we will interface from a device standpoint with your thermostat. Every Texan has air conditioning and every Texan is thinking about how to manage the cost of keeping their house cool. We will offer customers a rate where if you connect your thermostat to the Octopus system, you will get, say, a 5% discount on every kilowatt hour you buy from us. In return for that, we have the ability on a certain number of very hot and high-priced days to turn the temperature in your home ever so slightly up so that you’re using less electricity.
Thus, we have to buy less expensive electricity. That more than offsets the discount we give to the consumer in their monthly bill. In Texas, it’s thermostats. We do a lot with electric vehicles globally. You just don’t have as many EV drivers in Texas yet. We also do a lot with batteries. Today we’re focused on managing thermostats and helping our customers save money by managing their thermostats. Tomorrow — being in the future — this is a high-priority initiative of ours, we are going to be wrapping retail electricity supply with solar and storage deployment.
As a consumer, you’re going to be able to, either through Octopus or one of our partners — our partners being third-party solar financing companies — buy an integrated solar, storage, and retail electricity plan. You’re going to have one number that you pay every month and that will cover both the power that I’m sending into your home and the power that’s being generated on your roof and stored in that battery.
David Roberts
And I have one point of contact for all that as a consumer instead of dealing with lots of different vendors. That’s very cool. One basic question is, when you say as a homeowner, “if you hook your thermostat up to our system,” what does that mean? One of my big questions here about the VPP market in general, about demand response in general, is how smart do you need the devices to be? Most of the extant devices are dumb, which just means they’re not hooked up to the Internet. When you say “hook the thermostat up to our system,” is that a physical — is that a device I attach to my thermostat?
What do you need to gain control over dumb devices? Do you have to attach something to them? How do you deal with dumb devices, is what I’m asking.
Nick Chaset
This offering is currently limited to a device that is networked. Not every single thermostat. Ecobee, Sensi, Nest, but those are, at this point in time, pretty prevalent.
David Roberts
Those are already smart.
Nick Chaset
Those are already smart. There are different degrees of smart, and I think where our solution sings is you don’t need to have the most advanced bells and whistles thermostat — like a Nest.
We’re managing a lot of that complexity within our software and then we are on the back end partnering with hardware manufacturers to create the direct connectivity between our system and that piece of hardware. When a consumer either installs a new smart thermostat and is already a customer of ours, or if they’re just signing up for our service and they have that smart thermostat in their Octopus app — where they will also see what their bill is, how much consumption they had in the month, all that critical information — there will be a two- or three-click process to connect that thermostat to our system, less than a minute to make that connection, and then they just don’t think about it again.
David Roberts
The answer to the question then is you need the device to be smart, at least to some minimal level. It needs to be connected to the Internet before you’re able to deal with it. This has always been one of my questions about this market — looking out into the future when you think about wrapping more devices into this. In the glittering future, we’re managing hot water heaters and all the big appliances, your stove, whatever — all of them are hooked up and being coordinated. My question is, do we have to wait until all the dumb devices are replaced by smart devices before we can get there?
Or is there any way to take a dumb device and somehow make it smart enough to do this?
Nick Chaset
We do have a product that we don’t deploy at great scale in Texas, but it’s prevalent in places like Germany or the UK where you still don’t have mass deployment of smart meters. It’s called the Home Mini and it’s a home area connector. It looks like an AirPod case, with the Octopus logo on it. You’ll connect that in your home. That can provide connectivity to devices that don’t have all the smarts that a new device might have. We’ll often give that away to a customer because we think there’s enough value in connecting with devices that don’t have all the smarts.
David Roberts
Interesting. From the retail customer’s perspective, you come in, you give them an app, they connect their thermostat and whatever else is smart to your app, and then you are managing those devices when you need them for grid events and in exchange giving them a discount. From the customer point of view, they can just set it and forget it in the app. They can just tell the app, “Here’s how much you’re allowed to fiddle,” and then they don’t have to think about it anymore, is the idea here.
Nick Chaset
That’s right. If for some reason they need to boost charge their EV, as an example, there is always the ability to go into the app and override the management, and you get some number of free overrides a month. If you go beyond that number of free overrides, you just pay a little more.
This is all designed with the consumer at the heart of it. Consumers don’t think about air conditioning or EVs from an energy perspective. They think about them from a consumer utility perspective. “I need to keep my house cool, I need to go pick my kids up at school or get to work.” The energy part of it is usually a burden. It’s just part of the cost to operate those things that are key for life. They’re not predominant in your calculus around your cooling strategy for your home or your routing for how you’re going to drive to work.
We always want to make sure that we’re putting the consumer utility of the device or the tool at the forefront and make the energy element a secondary consideration. When you do that, you get a lot more people who are willing to engage. You’re able to get a lot more scale of devices under management.
David Roberts
The hype around distributed energy and demand management has been around for years. I’ve always said from the beginning, “You have to assume a customer engagement level of almost nothing. You have to assume that they know almost nothing and will do almost nothing. You have to design around that.” It’s been a long time coming for any of this to get simple enough that I can imagine just an average consumer doing it. Another question is, you get value out of these houses due to what you might call the spare capacity they’re not using, the spare grid capacity they’re not using.
You use it on the margins and you aggregate it together and that gives you a lot of power to bid stuff into the grid. As you say, you could get more value out of that house if they install solar and storage, they get more value and you get more value. You get more value out of the house the more smart devices they hook up — if they hook up their EV, you have more water heaters, more thermostats, etc. How deep into selling those devices to your consumers do you want to get?
You’re talking about solar PV and batteries. That’s one step. You can imagine heat pumps, EVs, EV chargers — there’s a whole world of smart devices. How deep into retailing those do you want to get?
Nick Chaset
In Texas, we haven’t gotten that deep yet. Typically, you want to start building a relationship with your consumer around the core offering, which is, “I’m going to give you incredible customer service, I’m going to be trustworthy, I’m going to say what I do and do what I say around what the bill you’re going to get.” Based on that trust you build with the customer, then you do more.
David Roberts
In the UK, you’re 10 years into this.
Nick Chaset
That’s right. In the UK, we are absolutely doing that. In the UK, we are now the largest leaser of electric vehicles.
David Roberts
No kidding.
Nick Chaset
We now have a bundled solution where we are leasing you an EV, installing a charger, and giving you all the electricity you need to charge that vehicle for one flat rate. For £299 a month, you get an EV, a charger, and all the charging you need for that car.
David Roberts
Unlimited charging, basically?
Nick Chaset
Unlimited charging. The thing about it is these are bi-directional EVs, and the only thing you have to agree to is you have to plug your car in every night so that we can charge and discharge the battery. We also have a big and fast-growing heat pump and solar installation business in the UK.
David Roberts
Interesting.
Nick Chaset
Where it all comes together is a solution we’re calling the Zero Bills home. We’re working with home builders to design new homes that have heat pumps, batteries, solar, and an EV charger. Those homes are being offered either five or 10 years of zero electric bill if that customer signs up with Octopus and gives Octopus the ability to optimize the battery and the heat pump.
David Roberts
No kidding. You get 10 years of free electricity with the home purchase.
Nick Chaset
That’s right.
David Roberts
Wild. Is it possible to tweak extant homes enough to get there? Or is that something you have to do from the ground up to get to full zero?
Nick Chaset
That’s absolutely the next phase of the Zero Bills home — the retrofit version of it. Obviously, conditions in an existing home are not always going to be as consistent home to home. Part of the Zero Bills home model is doing a community all at once. In any given month or year, depending on who is living in a home, what they are doing in the home, one home may have slightly more demand than the other. Averaging becomes important to be able to guarantee that Zero Bills home delivers a return on investment.
David Roberts
You’re pooling them to get to zero. That’s more difficult to do with retrofits, I’m guessing. Find a group to do it together.
Nick Chaset
Yes and no. Again, this is where having built the amount of customer trust that we have and a large customer base becomes important. Being able to say that we need to have a minimum of 100 homes, existing homes in a specific community, that is the minimum threshold. We are starting to see interest. People are volunteering, “I want this,” and there is more demand than we can supply. We are working through it. That is where the brand building becomes important too. People trust, “I want an Octopus home.”
David Roberts
Then the offer would be a retrofit plus 10 years of free electricity, the same thing you get with a new home. Or are you still —
Nick Chaset
That would be in principle what the offer would look like. Maybe it’s five years, not 10 years. But you say, “If I go and install an Octopus heat pump, an Octopus-installed solar and storage system, and I do it within a certain timeframe in a certain area, I might be able to guarantee myself five years of no electric bill.”
David Roberts
Wild. The reason this is exciting to me is because when you look at the data for why solar and storage installations in the US are so much more expensive than they are in other places like Australia or the UK, the main reason, the big chunk of costs, is customer acquisition. Dealing with customers, trying to sign up one customer at a time, is maddening and slow. Combining this with a utility gives you that captive pool of customers such that you can do batch jobs.
You can do a bunch at once and bring down the cost of all those installations. This is all for your retail customers, which for now in the US is just Texas. When you go to, say, Georgia, you’ve got Georgia Power, classic old-school vertically integrated utility. What is your pitch to them? Are you going to be the person who interfaces with their customers and aggregates their customers and then you’re the point of contact to the utility, or are you training them how to do what you’re doing in the retail?
What is your pitch to the vertically integrated utility?
Nick Chaset
It’s a little bit of both. What we’re finding going in is the utilities don’t today have these capabilities because they’ve never had to engage with customers around energy consumption in their home.
David Roberts
You say these capabilities, you just mean managing devices?
Nick Chaset
Managing devices, but also thinking about how to run campaigns, how to build — what does the consumer, the user interface look like? How do you minimize the number of clicks that people have to go through? Utilities have not historically had to think about this. They have not had to think like consumer companies.
David Roberts
You can say that again.
Nick Chaset
The regulatory frameworks they have operated in have sometimes said, “No, you are not allowed to operate like that.” What we are doing with, say, a Georgia Power — they are not a customer of ours today, but we would love to work with them in the future — for a Georgia Power, what we would say to them is, “Look, we are coming in. We have built a lot of technology and we have a lot of know-how to engage with customers to help them network the devices they already have in the home.” Georgia, you have a lot of heat pumps.
You have a lot of air conditioning as well. We can also help them deploy new things. Solar and storage is a big area of focus for Georgia Power. They’re encouraging consumers to do that. Let us be the one-stop shop to engage with consumers around all of these opportunities, both to connect what they have, adopt and deploy new things, and then give the utility visibility into all these things that have been connected, while also working closely with the utility to help them think about how they can start doing some of this themselves. Over time — the only way flexibility is going to scale in a vertically integrated utility market is if the utility is thinking about this as a core strategy as opposed to a customer program that sits on the edge. Our goal is we want to design and build flexibility for utilities, but over time transfer it to them so that they’re doing it themselves. That transfer probably means they’re going to also be licensing some software from us to be able to continue to do it.
David Roberts
They’re going to be using Kraken, is the idea.
Nick Chaset
That’s right.
David Roberts
The vision here is you go to a utility who has no experience with this, and you, as Octopus, work with them to set something like this up. Once they get their sea legs and understand what they are doing, you leave them with Kraken and move on.
Nick Chaset
That would be a great outcome for everybody involved. That’s right.
David Roberts
That’s interesting. This is why I come back to Kraken being independent. It seems that would require some coordination with Kraken at the very least. You’re still a package deal, a little bit.
Nick Chaset
Yeah. We feel we are the world’s best user of Kraken. If people are interested in using Kraken, they often want to talk to the people who know how to use it and put it to the best effect. That’s Octopus.
That’s perfectly fine for us. The reality is it takes a while to implement the organizational change necessary to operate in that Kraken environment. That’s a great business opportunity for Octopus, and the addressable market of utilities in the US — let alone the world — that would benefit from Octopus coming in, helping them understand what the art of the possible and Kraken is, is so large that I’m very happy for my soon-to-be partners at Kraken to take the road that I’ve started to build and make inroads into. I make those inroads, my colleagues at Kraken then take it from there, and then I move to work with the next utility that is really Kraken-curious.
David Roberts
This is a consultant role, almost — you’re playing the consultants, or not consultants exactly. I don’t know what the exact word is, but you’re helping others do what you do rather than being the one that does it for them.
Nick Chaset
That’s right. A managed service. It’s a managed service. There are going to be some cases in some markets where we will continue to operate as a persistent and long-term partner to the utility because they may just decide, “We want you to keep doing this for us long term.”
David Roberts
You run this, you be the face for the interface for it. Utilities could choose different levels of Octopus involvement.
Nick Chaset
I would say also Octopus itself is building technology that integrates Kraken. An example of the technology that Octopus is building that integrates Kraken’s backend optimization is a tool that we have deployed first in Southern California with Southern California Edison, and it is a solution we call Octopus Shift. Octopus Shift is the consumer interface for the connectivity of all these devices. Today you can connect devices and then we manage those devices against demand response events that the utility may call. In the near future, Octopus Shift is also going to empower customers to manage their devices against a time-of-use rate they might be on.
It’s not just saving money with a once-a-month payment for capacity when a demand response event gets called, but it’s also helping you save money every single day by making sure your EV is charging during the off-peak period or pre-cooling your home during the off-peak period. That’s an Octopus solution with Kraken operating it.
David Roberts
Do you worry — this is a side thing, but I asked the same question to Base Power and I have this question to everybody who is involved in this. The consumers in your utility areas are benefiting from this. They are making money from this through arbitrage. You are shifting their power around to times of cheaper use or higher congestion, whatever. It is moving energy demand around. Can you envision a time when your devices and your device management are ubiquitous enough in a utility area that you have arbitraged away all the value?
You flatten the demand curve, but then the consumers won’t be making any money anymore.
Nick Chaset
Two things will happen at that point. One, because we’re not a hardware finance company that relies on persistent arbitrage to make a return. We’re a software company, fundamentally. Octopus builds consumer software. Kraken builds enterprise backend software. That’s a good thing. We’ve created enough consumer surplus with our software that now it’s time for us to move to the next utility.
David Roberts
Socially, it’s a clear, obvious good. I’m just wondering business model-wise.
Nick Chaset
Because it’s a software business model, not a hardware business model, we’re not going to have the same risk of a stranded asset. Whereas if I deploy a battery — we’re seeing this in Texas today — gigawatts of storage were built in 2022 and 2023 on the back of extreme price volatility, summer and winter driven. Do you know what happens when you hit that marginal unit of new capacity? Volatility disappears. 2024 and 2025 have been very low volatility even though loads have been high and we’re seeing a lot of load growth, and it’s because we have all the storage. Storage business models, particularly in front of the meter, but I think behind-the-meter business models are going to have some challenges in Texas because of that ubiquitous build-out.
When you’re software-driven, you just don’t have that same exposure to having deployed a bunch of capital on the basis of a view on volatility. As people’s bills go down, that creates more opportunity for them to further electrify their homes because it becomes more cost-effective to do so.
David Roberts
I don’t think this is going to be a problem at scale for a long time and it would be a great problem to have eventually. But I’m curious about these business models, these arbitrage-based business models.
Nick Chaset
We don’t view ourselves as an arbitrage-based business model. Success in an arbitrage-based business model is going to be predicated on being the first mover. That’s almost always the case when there’s an arbitrage opportunity — the first mover wins and then everybody who tries to fast follow ends up struggling because the market gets efficient and the arbitrage opportunity disappears.
David Roberts
A great problem to have. Have you gotten bites from any big vertically integrated utilities yet? Are you doing this consultant role with any big utilities?
Nick Chaset
I referred to our first client, where we are doing this, Southern California Edison, who are one of the more experienced and forward-thinking utilities in the US when it comes to flexibility. The number of electric vehicles they have, the number of consumers that have solar and storage, and the number of people that have air conditioning. There’s really good product-market fit there. We’re seeing a lot of interest from utilities in the Northeast where you have capacity constraints. The PJM market dynamic is bringing a lot of utilities to a place where they’re realizing they need to get the demand side under control.
David Roberts
Theyre being forced to this now, a lot of them.
Nick Chaset
The way we think about it in terms of utility interest is if a utility is not facing some level of a forcing function or some level of distress related to load growth, typically they are happy with the status quo.
David Roberts
But data centers are coming for all of them. Few are going to be able to stick with the status quo for very long, I think, because data centers are going to create this constraint that you are talking about.
Nick Chaset
That’s right. When you’re willing to do something different and you need a different operating model for how you engage with flexibility, then you call Octopus because we’re one of the few companies that’s done it at scale all over the world.
David Roberts
I can imagine looking at this if you are not accustomed to it and if you have never done it as a wall of fog, a confusing thing to try to get into. Especially if a traditional utility just has none of those muscles exercised. What about munis or community choice aggregators or these other marginal utilities on the edge? Have you been in any talks with them or are their incentives any different?
Nick Chaset
I think their incentives are even more clearly aligned with the flexibility imperative than an investor-owned rate-regulated utility. That’s because a muni or a CCA, the savings that demand response, demand flexibility deliver accrue directly to the bottom line and directly to the consumer. In a rate-regulated utility, they may be able to deliver some cost savings, but then it’s going through the whole rate-making process and it can be muted or diluted because of the complexity of that process. We love the CCAs, we love the munis, and we’re talking to them all the time.
I come from a CCA background, I was the CEO of a CCA for seven years. We’re actively chatting with a number of them about how we could partner and bring these solutions forward.
David Roberts
Because another big story in the energy world right now is rising electricity costs everywhere. I’m looking at the hyperscalers and the big tech companies and right now they seem obsessed with big firm power. They all want nuclear plants and gas plants. But those take forever to get and if we’re going to satisfy the demand for data centers and the electrification of the entire economy with giant power plants, we’re just going to drive power prices up and up and up and we’re going to have a social crisis and utilities are going to have a — utilities’ social license is going to go away.
They’ve got to do this somehow cheaper than buying big power plants. Is part of your pitch that this package of stuff can start to restrain consumer costs? Can you promise to bring ratepayer costs down?
Nick Chaset
That’s absolutely what we’re working towards and looking to demonstrate. One of the challenges you have when focusing on residential flexibility and talking to the hyperscalers is they’re talking about 500 megawatts or a gigawatt at a time, even though it might take 10 years to build it. Their mindset is that scale. We’re going home by home by home. I might say, “I can deliver hundreds of megawatts, but it’s going to take a while, it’s going to be more incremental, and it’s going to be programmatic.”
They’ve been going for the low-hanging fruit of those big projects and that low-hanging fruit is almost gone. You just can’t build a new gas plant. There are only so many nuclear power plants that can be recommissioned. What we are starting to find — this is moving fast — we are starting to see big tech companies come to us and say, “We have a real problem with the social compact and power affordability in some of the places we want to build. Even though residential flexibility in the beginning may not move the needle for us from a speed-to-power perspective, to the degree that empowering customers to save money by changing when and how they use power in modest ways that don’t impact their experience day to day, if that can help us convince regulators that we should be able to build a project here, we need to do it.” That’s something that we’re starting to see happen.
David Roberts
You would think if any companies in the world would appreciate the way that small-scale distributed stuff can add up to something substantial, it would be the Internet guys. That is the Internet. The Internet is distributed small-scale information exchange adding up to something huge. This is the power of distributed energy. You think these guys of all guys would get it.
Nick Chaset
People are just moving quickly. The folks that are buying power for data centers aren’t necessarily the people who are thinking about the architecture of the Internet, either.
David Roberts
Perhaps if I pound my desk about it a little bit more. A lot of people have been facing the same set of problems and there’s been this idea floated around — I did a pod on it a couple of weeks ago — I’ve heard different versions of it, of trying to get the hyperscalers who want to build the things on these grids to pay for some of that residential flexibility to set it up. They have bags of money and they’re in a hurry, why not get some of their money to scale this stuff up?
In Texas, as the utility and the manager of the distributed goods and being on a grid where data centers want to come, have you dipped your toe in that or thought about that or is that on your radar?
Nick Chaset
It’s on our radar. There’s a company, Voltus, that has been doing a lot of thinking around this. “Bring your own capacity” and focusing on doing it in ways that align with existing market structures. I have a tremendous amount of admiration for Dana and her team doing that. Very much thinking about that. One of the challenges that I observe there is the regulatory model has not really caught up with where all the opportunities exist. If you’re a data center and you’re saying, “I would love to allocate $20 million to deploy batteries or heat pumps that are flexible, but I need to be able to monetize that flexibility. I need to be able to benefit from that flexibility.”
That’s where the regulatory construct or the market constructs become significant. The logistical challenges of doing $20 million of home-by-home retrofits of batteries are not insignificant. All things equal, if they can go and buy a big gas plant or a nuclear plant in one fell swoop, that’s probably where they’ve oriented. As that dries up, which is happening, there’s going to be a forced march to ever smaller volumes and customer types of flexibility and we’re here to do it.
David Roberts
When they come to you and say, “We need a gigawatt, we don’t care about this little stuff,” what can you tell them? How much scale can you offer them? Can you say to them, “No, we can do a gigawatt. Just give us time, give us a few years, we can get to a gigawatt.” What sort of scale can you promise?
Nick Chaset
We’ve built a 3.5 gigawatt virtual power plant in the UK over the last two years.
David Roberts
That covers — that’s the whole country pooled?
Nick Chaset
That’s the whole country pooled. That’s just electric vehicles, though.
David Roberts
Oh wow, no kidding.
Nick Chaset
Yeah. It’s 350,000 electric vehicles driven by Octopus Energy customers that they have networked. It’s more than 50% of the eligible vehicles among our customer base. If you think there are 700,000 Octopus Energy customers that drive an EV, half of them have signed up for a dynamic virtual power plant arrangement with us. It’s possible to scale quickly, but it does become hard to do if you don’t have a preexisting relationship with the customer. This is where the retail dynamic becomes important. In PJM, where you have some level of retail choice, the rules are set up to make it tough for folks like Octopus to deliver the level of service that we want to deliver when we’re a retailer.
We struggle to be able to go as efficiently as we do in places where we are the retail acquirer of customers. That’s where you want the partnership with the utility, because they have that relationship. There is a chicken or an egg around how you effectively get to that customer. We tend to think that doing it in partnership with the utility is going to be the way that gets us there most quickly. You have to go through the process steps to get the utility on board, because once they are on board, we think that you’re going to be able to scale quickly.
David Roberts
That’s what I was trying to get at — the slowness, insofar as there is slowness, is not technical slowness or the slowness of the actual process of doing it. It’s all the regulations and the unfamiliarity of it. Once the model is set up, once you have a utility on board and a bunch of captive customers, then you can get substantial amounts of power out of that relatively quickly. This will scale faster than you can get a gas plant once you have it set up.
Nick Chaset
That’s right. We just have to get the first and second ones set up to show that it works. Our expectation is that a lot of other utilities and hyperscalers will want to fast follow because it gives them capacity. Maybe not all the capacity they need, but it gives them capacity. It does get at affordability because we are working with the individual household to lower their energy burden. It’s clean too. It’s the win — win — win.
David Roberts
One of the things I wanted to be sure to touch on is one of the attack lines against clean energy these days. People point at the Spanish grid and say, “Look, when you get too much renewable energy or too much of this fuzzy soft demand side stuff, you get an unstable grid, you get lack of reliability, lack of safety.” I wonder whether you run into any of that and what your thoughts are on the stability and security of a grid running on this kind of widely distributed, coordinated, small-scale energy rather than the big power plants. Do you run into the safety and security question a lot? If so, what is your answer?
Nick Chaset
Your core technology systems at the heart of your utilities do become hindrances. If you think about Spain, no intelligent assessment of what happened in Spain has not covered the fact that some of the core systems were not sufficiently sophisticated to account for variable energy resources. If you’re trying to run a modern system on an analog operating system, you’re going to run into challenges because the smarts at the edge are a lot greater than the capabilities at the center. That’s part of the pitch of Kraken. Kraken is a modern core operating system that allows utilities to do all of these things because your system is designed for flexibility as opposed to —
I’ll give an example I heard recently for a large utility on the West Coast. Their billing system only allows them to have a fixed number of rates they can offer customers. Anytime they want to offer a new rate, they have to eliminate something they already have.
David Roberts
Probably just some quirk of their Excel spreadsheet or whatever.
Nick Chaset
I don’t even know. But think about that. When you think about a world where you’re trying to get more dynamic and more engaged with these devices, to think that “I can’t have unlimited customer rates, I can’t have dozens or hundreds of them, and I have a core system that doesn’t allow that.” How can you possibly operate in this new, more customer-centric, more flexible way? Those become the hindrances more than anything. That’s where Kraken comes in.
David Roberts
The other customer concern I wanted to ask about, and this is something that has come up in a lot of separate discussions recently, especially as tech companies and tech platforms move into the home and car. You’re probably aware of the larger discussion going on around what they’re calling enshittification, where you get trapped on these platforms and then once you’re trapped, they suck value out of you, they stick new costs on you, they exploit you, etc., because you dug yourself in and can’t escape. I think a lot of people, when they look at that stuff moving into the home and their vehicles, worry about a similar dynamic where your water heater is bricked because the company that was managing it has gone out of business. Now your smart whatever doesn’t work with the other smart thing, etc.
All these problems that afflict consumer information technology — our phones and social media sites — people are worried about that stuff coming into the home. What do you tell people that are worried about lock-in and exploitation?
Nick Chaset
This is where open standards become important. One of the best examples of an open standard that has fought the enshittification of consumer devices is Bluetooth. I have a phone, I have a set of AirPods. Today I lose my AirPods. I don’t only ever have to use AirPods, I can get a pair of Bose or Sony or what have you. You have an open Bluetooth standard to connect devices to other devices. It’s something that the Kraken team is pioneering. Project Mercury is an initiative that was launched by Kraken in partnership with the Electric Power Research Institute because utilities have a lot of these same concerns.
David Roberts
I did a pod with Duval at Kraken about those.
Nick Chaset
Exactly. The open standards go a long way. If you have an open connectivity standard between devices and utilities, you reduce the risk that, “Oh, you don’t connect with this standard so you can’t use your water,” you reduce that risk. If this management company goes out of business, a new management company comes in. This exists in retail and this is one of the features of a functional retail electricity market — ease of switching.
David Roberts
This is by law, by regulation.
Nick Chaset
Texas has very easy switching. The UK has very easy switching. Other states in the US, switching is a pain. It’s more manual. When you make it easy to switch, customers choose. When you make it hard, customers don’t. It’s a choice that regulators have to make.
David Roberts
Part of your promise then coming into US markets, part of your promise to homeowners, to residential customers, is “This is open. If we go away, you’ll still be able to use it. With the new company that comes in, you’ll be able to switch away from Octopus if you want, etc. We’re not going to lock you in.” That’s part of the pitch here.
Nick Chaset
Yeah. That’s how Kraken has always been architected, with this idea that switching should be easy and seamless, even if that means you’re switching away from Octopus.
David Roberts
Final question then. I saw that National Grid has taken up Kraken and this is, as far as I know, the first really big utility in the US to wholesale adopt Kraken. Is that far enough along that we know how that is going and do you think that that is going to be the signal — the flag — to other regulated utilities that this stuff works? How big of a deal is that?
Nick Chaset
It’s a huge deal for Kraken because, by and large, no vertically integrated investor-owned utility wants to be the first one to adopt a new technology or do many things. National Grid making the decision and going through years of diligence is a massive signal that Kraken is ready for the US. It’s still early on in the process. I believe the contract was finalized in May or June of 2025. As you can imagine, these are long implementation processes. I can’t speak to where the implementation is exactly, but so far, so good.
I was at a National Grid event recently and they were happy with where we had gone so far. It’s also driving a lot of interest among other utilities in Kraken. This is also where the separation of Octopus and Kraken becomes important. Octopus, for all that we can do and are trying to do for utilities in the US, there still is a little bit of reticence at times to work with Octopus, because there is a question of, “Are you going to be a retail competitor that’s going to come and try to compete with me for the customer?”
My answer would be, “We don’t think about it that way. Outside of Texas, we want to be a partner of the utility.” Some utilities might still think, “Nick’s a trustworthy guy, but I don’t fully believe that he’s not thinking about operating in my market.”
David Roberts
They have regulated monopolies, most of these.
Nick Chaset
That’s right.
David Roberts
How big of a worry is it?
Nick Chaset
That’s generally what I’d say as well. Kraken being a fully independent company gives a lot of utilities confidence that, “I am working with Kraken. Kraken is its own thing.”
David Roberts
Kraken has no incentives to compete. It has none of those incentives.
Nick Chaset
That’s right. I might want to work with Octopus because I’m excited about Kraken and I want to talk to the people who are the world’s best users of Kraken, as I mentioned earlier, but I don’t have to. That has helped give more comfort to certain utilities that working with Kraken doesn’t support someone who might compete with you in the future.
David Roberts
Are there places in the US where there simply aren’t enough smart devices of any kind for you to establish a foothold? Are there places you couldn’t go yet because there aren’t enough distributed devices to work with?
Nick Chaset
I don’t think so. The bigger challenge would be places where you don’t have any level of smart metering, where you still have analog meters and meter readers. There is value in being able to collect information more regularly and pull that information to monetize flexibility. It’s not a prerequisite. There are states like Massachusetts where you don’t yet have smart meters, where there is a lot of opportunity for flexibility. That is one limiting factor. Everywhere in the US people are adopting tech that is smart and can be networked and can respond to price signals and dispatch signals.
I don’t think there’s anywhere in the US where there’s not a really interesting opportunity for us to work with a utility.
David Roberts
Awesome. I appreciate the time. Octopus is fascinating. This is a classic case of one of those markets — these VPP markets, coordinating distributed devices. It’s just one of those things that in my career is “It’s taking forever, it’s taking forever, it’s taking forever — oh my God, it’s here.” All of a sudden, Octopus went from nothing to huge, overnight. It’s a very exciting time to be following this stuff. Thanks for coming on.
Nick Chaset
Thanks so much. I really appreciate it.
David Roberts
Thank you for listening to Volts. It takes a village to make this podcast work. Shout out, especially, to my super producer, Kyle McDonald, who makes me and my guests sound smart every week. And it is all supported entirely by listeners like you. So, if you value conversations like this, please consider joining our community of paid subscribers at volts.wtf. Or, leaving a nice review, or telling a friend about Volts. Or all three. Thanks so much, and I’ll see you next time.
