Eon deal to adopt Kraken marks significant step for sector

Eon’s plans to “reinvent itself” by creating new company Eonnext and using Octopus Group’s Kraken platform marks a significant step for the energy sector, a former Npower chief has said.

The energy giant is the second UK retailer to licence Kraken from Octopus, with Good Energy announcing it had struck a deal to use the platform last year.

The deal, which industry sources speculate is worth between £30-£40 million, will see Npower’s customers migrated to Eonnext in Q2 this year, while Eon’s customers will be transferred in 2021. Ultimately, Octopus Group is aiming to have 100 million customers on its platform by 2030.

Paul Massara, who is part of Utility Week’s new editorial board, said if the migration of millions of customers onto the Kraken platform is successful, there is scope for other larger players to enter the retail market.

“The significance is, if you have a platform like this, it could be applied to anybody. Therefore for new parties coming into the marketplace, it reduces the barriers for new people wanting to come in. You could have an Amazon or a Google that says, well actually I can use a platform like this now that’s easy to transfer if it works and allows you to do different things.

“If it can handle that kind of volume, then clearly it sounds as though there’s a new platform on play which helps people. Up until now it’s been a traditional SAP model which has been very expensive and cumbersome to do.

“The proof will be actually do they manage to move all those customers across successfully and one hopes that they can do it because Npower have already had historical issues about customer transition and billing systems and the last thing they will want to have is new problems.”

Speaking to Utility Week about the deal, Octopus Energy chief executive and Kraken Technologies director Greg Jackson said the company had been in talks with a number of larger players and that it was exciting that the group’s ethos has been “validated”.

He added: “From the day we launched, Octopus has been focused on building the technology that would help make energy cheaper, greener and with better service for customers. By the time we’d grown to more than a million customers, quite a lot of the incumbents started acknowledging that this was working.

“For quite a while now, quite a few of the incumbents have been enquiring about whether our platform might be something they could licence and after extensive discussions Eon was the one that had the approach that worked best to work with us to do that. It’s been an exciting period.”