Octopus-Bulb deal leads to £1.5bn profits for UK government

Octopus Energy has made headlines for paying over £3bn to the UK government after buying rival energy provider Bulb.

When Bulb collapsed in November 2021, the government stepped in to help. A year later, Octopus Energy bought Bulb, creating a deal that’s helped both taxpayers and billpayers.

What’s the big deal?

Octopus agreed to cover costs for Bulb’s customers in a wholesale agreement. Profits were then split between the two energy companies until Octopus got back what it had invested.

The final payment happened on 30 September 2024, wrapping up the bailout without losses to taxpayers or billpayers. Initial estimates suggested costs could reach £6.5bn.

It means the government have received profits of £1.5bn, and the biggest chunk (£1.28bn) came from the wholesale agreement.

They also earned £19 million from profit-sharing and £200 million in interest, with another £20 million expected soon.

Why was this deal important?

The agreement between the providers didn’t raise costs for billpayers and – unlike other bailouts – didn't increase standing charges.

Octopus also offered jobs to all Bulb employees, and 94% chose to stay. There was barely any disruption – 1.5 million Bulb customers were moved onto Octopus systems within six months.

Greg Jackson, founder of Octopus Energy, said the deal had saved the Treasury “billions”.

He said: “This outcome is a remarkable success story for taxpayers and billpayers.

“I’m proud that when other companies walked away or banged their fists on the table, Octopus worked hard to find a fair deal which saved the Treasury billions compared to alternatives.

“I hope this is a model for future deals between government and companies.”