AGL eyes UK-based OVO Energy’s tech platform after competitor Origin Octopus win

AGL Energy is considering the value of OVO Energy’s technology platform as it seeks to compete against Origin Energy’s purchase of Octopus in the UK.

Energy companies can more efficiently manage their customer billing and usage by partnering with tech platforms.

AGL Energy is considering the value of OVO Energy’s technology platform as it seeks to compete with rivals such as Origin Energy in the software space, sources have told The Australian.

Origin is the front runner in the increasingly important area of platforms through its use of Octopus Energy’s Kraken that allows the company to efficiently manage millions of accounts and orchestrate the vast array of household and business solar and batteries – saving millions of dollars in the process.

It is understood AGL had previously explored the possibility of licensing Kraken’s platform but Origin has an exclusive use deal struck when it became a 20 per cent owner of UK’s Octopus. Origin is now a 23 per cent stakeholder.

Conceding it must sharpen its attack and a rapidly evolving electricity generating mix, AGL is believed to be zeroing on the Kaluza technology platform owned by the UK-based OVO Energy.

It is not known whether AGL intends to license the technology platform or purchase it.

Revelations of AGL’s interest comes just weeks after the Australian energy company quietly purchased OVO Energy Australia, a small electricity retail business which runs on the Kaluza platform.

AGL chief executive Damien Nicks earlier this year was lavish in his praise for the performance of Kaluza.

“We are thrilled with the performance of OVO Australia and the Kaluza platform in the Australian market,” Mr Nicks said at the company’s half-year results.

“The Kaluza platform has enabled OVO to rapidly launch and host new and innovative products in market … We are continuing to consider AGL’s future technology ecosystem.”

If decides to migrate its more than 4 million customers to Kaluza, it would be mark a significant outlay for the business, but investors said the company has little choice,

“They have to do something. They can’t get on Kraken. Kaluza is OK but there will be hiccups for sure,” said one AGL investor who spoke on condition of anonymity.

Kraken and Kaluza are increasingly playing a critical role in energy businesses. Companies can more efficiently manage their customer billing and their usage, which is particularly important in Australia where there is a significant number – and growing – of rooftop solar systems.

Origin estimated savings from migrating its near 4 millions customers was $150m a year.