OVO sells 20% stake to Mitsubishi to fund its drive into electric vehicle battery market

February 15, 2019

Japanese industrial giant Mitsubishi has bought a 20% stake in fast-growing Bristol green energy group OVO, paving the way for it to expand into new markets across Europe and Asia Pacific.

OVO, which received a reported £200m for the stake, will use the funding to accelerate the development of its intelligent energy technologies unit.

Called Kaluza, the new division develops and manages software and hardware to support the integration of electric vehicles (EVs) and dynamic battery storage onto the grid. 

The firm believes dynamic charging and other integration technologies will be essential to support the energy market’s expected transition from two-thirds fossil fuels in 2017 to two-thirds renewable energy by 2050.

Recent analysis from Imperial College London shows the market value of integrating energy devices, such as EV-to-grid chargers and dynamic batteries, could be up to £6.9bn a year in the UK alone. Globally this figure could be 76 times as much – or £525bn. 

OVO was founded in Cirencester by CEO Stephen Fitzpatrick in 2009 to disrupt the UK energy market with a new proposition – cheaper, greener and simpler energy.  

The business moved to Bristol and has grown rapidly over the past decade to become the largest UK independent energy supplier with more than 1.5m customers and around 900 staff in two offices in the city. Over the past few years it has made a spate of acquisitions to diversify from its core energy supply market towards becoming an energy services company.

Expanding into smart home services and investing heavily in new technologies including energy storage and electric vehicle charging, the company launched the world’s first domestic vehicle-to-grid for electric vehicles last year.

CEO Stephen Fitzpatrick said: “Transitioning away from fossil fuels is the biggest challenge we face in the 21st Century. The costs of EVs, battery storage and wind and solar power have fallen dramatically in recent years, but it’s becoming increasingly complex to integrate them onto the grid.

“To succeed, we will need to develop new technology and redesign the energy system around the customer. We want to be at the forefront of that global, tech-enabled transition to a zero-carbon energy system. This investment from Mitsubishi Corporation will help us get there.”

The deal is a strategic investment for Mitsubishi Corporation, which has approximately 6,200 MW of energy assets under management and operation worldwide – roughly equivalent to the energy supply for 8.5m households.

The group has interests across the entire renewable energy value chain – from owning and operating renewable energy assets, energy trading, manufacturing lithium-ion batteries and investing in distributed renewable energy projects including energy storage. 

Stephen Fitzpatrick added: “OVO and Mitsubishi Corporation share the same vision for the future of energy – secure, distributed and consumer-centric, with affordable clean energy for everyone. We’re delighted to be working with an exceptional global partner which is perfectly placed to help us accelerate our international expansion and technology roll-out.” 

Mitsubishi executive vice president and CEO of its Power Solution Group, Katsuya Nakanishi, added: “OVO’s business model, long-term vision for the energy sector and culture align well with our own. They are precisely the sort of technology driven and innovative firm we have been looking for in order to strengthen the downstream business in the energy sector.

“We have been very impressed with Stephen and his team’s plans for the business. Given our global presence and experience in the energy sector, we feel we are uniquely well placed to help OVO to enhance not only their own business in Europe, but their international expansion plans and broaden their technology offering.”

Greentech Capital Advisors acted as the exclusive financial advisor to OVO.


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