Tokyo Gas and the UK’s Octopus Seek to Upend Power Retail Market

December 7, 2022|Electricity retail

With Japan’s energy retail market in disarray, a 130-year old Japanese power company is teaming up with a 21st century British energy-tech startup. The unexpected alliance between a legacy company and a young innovative business promises to shake up Japan’s power retail sector.

Almost two years have passed since Tokyo Gas purchased a 9.7% stake in the UK- based Octopus Energy for $200 million. The main factor driving the deal was Tokyo Gas’ need for a partner to develop its nascent power retail business in Japan and elsewhere. As the gas provider expanded into electricity, it saw the need to upgrade and adapt to digital technologies while harnessing new demand trends, such as for green power.

In Japan, the alliance centers around a 30/70 joint venture that opened for business about a year ago under the name of TG Octopus Energy. As well as competing on price, the venture aims to turbocharge the development of a demand-response culture in Japan, where awareness of power conservation through lifestyle change is still at an early stage.

As a large portion of the retail market struggles to stay afloat, the Japanese-British venture has the opportunity to gain significant market share. After all, that’s exactly what the UK startup has managed to do in its home market.

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