Octopus Energy said it would locate these systems around “pockets of available capacity” in the UK’s distribution network, by which it likely means areas which are being underutilised or are open to optimisation.

The companies signed a memorandum of understanding (MoU) at the Abu Dhabi Sustainability Week in the UAE.

Octopus Energy and the Emirati state-owned renewables firm Masdar have announced a collaboration which they claim will “power the next generation of data centres” in the UK. 

The companies signed a memorandum of understanding (MoU) at the Abu Dhabi Sustainability Week in the UAE last week, which aims to optimise the UK’s distribution network to “free up hidden capacity”. 

Octopus’ technology arm, Kraken, will plan to use its optimisation technology to dynamically balance on-site generation, battery energy storage systems (BESS) and grid power to “guarantee” power supply for data centres. The company said it would locate these systems around “pockets of available capacity” in the UK’s distribution network, by which it likely means areas which are being underutilised or are open to optimisation.

According to Aurora Energy Research, UK data centre power demand is expected to rise from around 5% of total demand in 2025 to between 11-14% by 2035. This growth has prompted questions  over the UK’s ability to stick to the government’s Clean Power goals and the grid’s ability to cope with expected demand. 

“This is about delivering projects that make energy cheaper, cleaner, and unlock real opportunities for businesses and industry,” said Greg Jackson, founder and CEO of Octopus Energy.

The two companies have collaborated before, on a project which may provide precedent for this agreement. Back 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 into Kraken to encourage Octopus to make a potential future stock exchange listing in London.

Octopus and Masdar also announced a second MoU this week, aiming to build C&I solar PV and wind projects in Africa. Beginning in South Africa, the companies said they would focus on deploying local grids and distributed energy systems to serve the C&I sector, before extending to other countries “soon”. Masdar said it would collaborate with Octopus on scaling the projects.

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