Octopus Energy Generation, a global renewables and energy transition fund manager that is part of Octopus Energy, stresses the importance of pre-scaling stage finance.
The UK’s current energy system is expensive, insecure and polluting, creating economic, social and environmental strain. 16% of UK households spend over 20% of their net income on energy, forcing families to choose between heating and eating (Child Poverty Action Group 2025).
Reliance on fossil fuels leaves the UK exposed to geopolitical shocks, with Russia’s invasion of Ukraine in 2022 causing energy bills to surge by over 50% (Allianz 2024). Fossil fuel combustion drives climate change, biodiversity loss and severe public health impacts, with up to 36,000 premature UK deaths attributed to their use (Public Health England 2024).
We have no alternative but to transform the energy system into one that is affordable, secure, and sustainable. A renewable-based system provides the pathway forward.
The transition
Renewable energy is the cheapest and most secure long-term option. The global weighted average cost of electricity is around $0.05/kWh for solar PV and wind, compared with $0.10–0.15/kWh for new gas or coal (IEA 2024). With lower capital and operational costs, renewables are shielded from volatile global fuel markets. They deliver local, reliable and clean electricity while supporting both environmental and population health.
A renewables-powered grid must be flexible, smart and resilient. This means balancing distributed supply with adequate storage, ensuring resilience against cyber threats and extreme weather, and modernising transmission and distribution networks to handle two-way power flows.
The success of the energy transition hinges on rapid and widespread technology adoption to provide solutions. 45% of the technologies required remain at the pre-scaling stage (IEA 2023). This underscores the urgency and the significant investment potential of climate tech innovation at the growth equity stage.