Octopus Energy to Repay Almost Entire Cost of Government Support for Bulb Takeover

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Octopus Energy to Repay Almost Entire Cost of Government Support for Bulb Takeover

Octopus Energy, being the UK's second-largest energy supplier, stepped in to take over the failed energy provider Bulb in 2022 after the latter's collapse, which was attributed to losses from escalating wholesale gas prices against the Ofgem price cap. The government extended a funding facility of up to £4.5 billion for the takeover, with Octopus utilizing £1.6 billion of this, and the rest being planned for repayment to the Treasury.

The repayment by Octopus Energy, totaling over £2.8 billion, includes profits generated during a period of declining wholesale energy costs, which have to be returned to the government as part of the bailout conditions. Despite initial projections forecasting a higher cost to the taxpayer following Bulb's failure, the net cost is now estimated to be around £6.1 million, a significant reduction from the anticipated £19.6 million.

While acknowledging some uncertainties that remain to be addressed, the Department for Energy Security and Net Zero expressed satisfaction at the approximately 99% recovery of owed amounts to the government. This outcome stands in contrast to the November 2022 estimate by the Office for Budget Responsibility, which anticipated a potential liability of £6.5 billion, potentially making Bulb's bailout the most expensive since the 2008 financial crisis.