Teneo reported on 25 May 2023 that the estimated amount Octopus Energy Limited would be due to repay to government following its purchase of Bulb Energy Limited was £2.8 billion1. Octopus had paid £113 million to the government to purchase Bulb on 20 December, under a sale completed through the Energy Transfer Scheme1.
Bulb announced it could no longer continue trading in November 2021, and on 24 November 2021 Ofgem and the Department for Energy Security and Net Zero placed it in a Special Administration Regime (SAR)1. Three individuals from Teneo were appointed by the High Court as joint energy administrators1. With around 1.5 million customers, Bulb was the largest supplier to fail and was considered too large for a Supplier of Last Resort1. A sale process was launched in February 2022 and took 10 months to complete1.
As part of the sale deal, government agreed to support Bulb by paying its wholesale energy costs up to 31 March 2023, allowing it to accumulate capital to pay those costs from 1 April 20231. The total estimated cost to the taxpayer for funding Bulb was £3.02 billion as of the end of January 20231. Government does not expect to recover the full amount committed and has indicated it intends to recover the shortfall from energy consumers1. The Department will calculate the final cost when the SAR ends1.
"On 25 May 2023, Teneo reported that the estimated amount Octopus would be due to repay to government was £2.8 billion."
The wider context given in the same document is that average annual household bills for gas and electricity rose from £1,200 in winter 2021-22 to £3,300 in spring 2023, and that between July 2021 and May 2022, 29 energy suppliers failed, affecting nearly four million households1.
| Item | Figure |
|---|---|
| Price paid by Octopus for Bulb | £113 million |
| Estimated taxpayer funding cost, end January 2023 | £3.02 billion |
| Estimated amount Octopus due to repay, reported 25 May 2023 | £2.8 billion |
Why it matters for households
The £2.8 billion is money expected back into government accounts, not a charge on household bills. The document states separately that government does not expect to recover the full £3.02 billion of taxpayer funding and intends to recover the shortfall from energy consumers1. How that recovery would work, and over what period, has not been reported in this document. For a household, the practical link is indirect: costs that are not recovered from Octopus or from the administrators fall into the same pool of supplier-failure costs that ultimately reaches bills. The suppliers hub sets out how supplier failures and their costs have shaped the retail market, and Energy Suppliers and Household Energy Independence covers what supplier resilience means for a home's exposure to those costs.
What happens next
Full repayment is not expected until September 2024, or September 2025 if Octopus exercises a right to defer under certain market conditions1. A further 12-month wind-down period is then expected, so the conclusion of the SAR is not expected until autumn 2025 or autumn 2026, at which point final costs and amounts repaid will be known1. The Department has agreed to write to the Committee with the final cost to the taxpayer, including how much Octopus has repaid and any shortfall it plans to recover from consumers, with a target implementation date of December 20251.
Sources1 cited
- Government response to the Committee of Public Accounts Session 2022-23, committees.parliament.uk