Octopus Energy and state-owned renewable energy company Masdar have announced a partnership they claim will power “the next generation of data centres” in Britain.
The companies signed a Memorandum of Understanding (MoU) during Abu Dhabi Sustainability Week in the UAE last week, which aims to optimize the UK distribution network to “unlock hidden capacity”.
Octopus’ technology arm, Kraken, will plan to use its optimization technology to dynamically balance on-site generation, battery energy storage systems (BESS), and grid power to “guarantee” power supply to data centers. The company said it would locate these systems around “areas of available capacity” in the UK distribution network, by which it likely means areas that are underutilized or open to optimization.
According to Aurora Energy Research, power demand in UK data centers is expected to rise from around 5% of total demand in 2025 to 11-14% in 2035. This growth raises questions on Britain’s ability to stick to the government’s clean energy targets and on the ability of the electricity grid to meet expected demand.
“This is about delivering projects that make energy cheaper and cleaner and unlock real opportunities for business and industry,” said Greg Jackson, founder and CEO of Octopus Energy.
The two companies have previously collaborated on a project that could provide a precedent for this agreement. In May 2023 they announced a £1 billion framework agreement to support BESS investments in the UK, where Masdar would use Octopus’ Kraken technology platform to manage its UK BESS portfolio.
Earlier this week, the UK government announced it would make a £25 million investment in Kraken to encourage Octopus’ possible future listing in London.
Octopus and Masdar also announced a second MoU this week, aimed at building C&I solar PV and wind energy projects in Africa. Starting in South Africa, the companies said they would focus on deploying local grids and distributed energy systems to serve the C&I sector, before expanding to other countries “soon”. Masdar said it would work with Octopus in scaling up the projects.
