London Daily

Focus on the big picture.
Saturday, Jun 21, 2025

Taxpayers' Bulb bailout cost plunges after Octopus supply deal with government

Taxpayers' Bulb bailout cost plunges after Octopus supply deal with government

The government could make a profit of up to £1.2bn on energy supplied to Octopus's newly-acquired Bulb customers, partly offsetting the overall cost of the industry's biggest bailout.

The cost to taxpayers of rescuing the biggest residential energy supplier to collapse during the recent industry crisis has plunged - a rare glimmer of good news after two years of turmoil.

Sky News has learnt that the latest figures sourced from insiders suggest that the demise of Bulb, which became insolvent in November 2021, will have been far less costly than forecast.

According to industry figures close to the situation, the bill to taxpayers between the timing of Bulb's special administration and its takeover by Octopus Energy in December totalled £1.45bn.

However, executives close to the buyer are now said to believe that the government is expected to make a profit of up to £1.2bn on the supply of energy to Bulb between the date of the takeover and the end of March.

This unexpected windfall for the state has been caused by the difference between the wholesale prices paid by the government - which have plunged in recent months - and the fixed price, set at the level of the current industry cap, paid by Octopus to obtain that energy.

Sources said that dynamic was likely to reduce the overall cost of the Bulb bailout to several hundred million pounds, although the ultimate figure remains subject to change.

On a per customer basis, that would make the Bulb rescue cheaper than some of the supplier of last resort (SOLR) deals struck with Ofgem, the energy regulator, during the last two years.

Octopus Energy was appointed to take on Bulb, the first energy supplier to be put under 'special administration'

Bulb, with more than 1.5m customers, was by far the largest residential energy player to collapse as wholesale prices soared.

At the time, it was the UK's seventh-biggest gas and electricity supplier.

The reduced taxpayer bill may be relevant in the context of judicial reviews lodged by rival energy suppliers including Centrica, the owner of British Gas, which alleged that the sale of Bulb to Octopus Energy had been unfairly handled.

A three-day hearing has been scheduled to hear the suppliers' challenged beginning on 28 February.

On Thursday, Centrica sparked a new political row when it reported record annual profits of over £3bn.

In December, the Department for Business, Energy and Industrial Strategy (BEIS) said it had been advised by Bulb's special administrator to set an upper limit for the post-takeover funding facility of £4.5bn.

"The £4.5bn figure represents an estimated upper limit of the support based on forecasted energy costs during the period until 31 March 2023, which reflects the current volatility in global energy prices, BEIS said at the time.

Greg Jackson is Octopus Energy's chief executive


"The extent of government support could be lower than £4.5bn, depending on energy prices this winter."

The £4.5bn estimate was in addition to the estimated £1.45bn pre-sale cost to taxpayers, but the government's fiscal watchdog - the Office for Budget Responsibility - went even further, suggesting that the Bulb bailout could ultimately cost the public purse as much as £6.5bn.

In a more recent statement provided to Sky News, a government spokesman said: "The sale of Bulb to Octopus Energy concluded on 20 December 2022 and the transfer of customers is now in progress. Ensuring that we get the best outcome for Bulb's customers and the British taxpayer remains our priority.

"We worked with Special Administrators to ensure fair and open competition to give Bulb's 1.5 million customers much needed reassurance, while providing best value for taxpayers.

"The government will provide the remaining funding necessary to ensure that the special administration is wound up in a way that protects customers' energy supply. We will recoup these costs at a later date."

As part of the sale to Octopus, it is said to have agreed to pay between £100m and £200m to take on Bulb's customer base, with a separate profit-share agreement giving the government a return for several years on earnings from Bulb customers.

An Octopus Energy spokesperson said: "Octopus always said this is a fair deal and good value for taxpayers.

"It's becoming increasingly clear how good a deal the government have got."

Newsletter

Related Articles

0:00
0:00
Close
Political Turmoil Resurfaces in Belgium Amid Economic Concerns
Fed policymakers divided on timing of interest rate cuts
Trump signals imminent agreement with Harvard University
Inheritance tax referendum alarms Swiss billionaire community
Japan cancels bilateral security meeting amid US defence demands
AI skeptic Emily Bender warns that ‘the emperor has no clothes’
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
FBI and Senate Investigate Allegations of Chinese Plot to Influence the 2020 Election in Biden’s Favor Using Fake U.S. Driver’s Licenses
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
Plans to Sell Dutch Embassy in Bangkok Face Local Opposition
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump's $5 Million 'Trump Card' Visa Program Draws Nearly 70,000 Applicants
DGCA Finds No Major Safety Concerns in Air India's Boeing 787 Fleet
Airlines Reroute Flights Amid Expanding Middle East Conflict Zones
Elon Musk's xAI Seeks $9.3 Billion in Funding Amid AI Expansion
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Taiwan Imposes Export Ban on Chips to Huawei and SMIC
Israel has just announced plans to strike Tehran again, and in response, Trump has urged people to evacuate
Netanyahu Signals Potential Regime Change in Iran
Juncker Criticizes EU Inaction on Trump Tariffs
EU Proposes Ban on New Russian Gas Contracts
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
UK Home Secretary Apologizes Over Child Grooming Failures
Trump Organization Launches 5G Mobile Network and Golden Handset
Towcester Hosts 2025 English Greyhound Derby Amid Industry Scrutiny
Gary Oldman and David Beckham Knighted in King's Birthday Honours
Over 30,000 Lightning Strikes Recorded Across UK During Overnight Storms
Princess of Wales Returns to Public Duties at Trooping the Colour
Red Arrows Use Sustainable Fuel in Historic Trooping the Colour Flypast
Former Welsh First Minister Addresses Unionist Concerns Over Irish Language
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
France Bars Israeli Arms Companies from Paris Defense Expo
King Charles Leads Tribute to Air India Crash Victims at Trooping the Colour
Jack Pitchford Embarks on 200-Mile Walk to Support Stem Cell Charity
Surrey Hikers Take on Challenge of Climbing 11 Peaks in a Single Day
UK Deploys RAF Jets to Middle East Amid Israel-Iran Tensions
Two Skydivers Die in 'Tragic Accident' at Devon Airfield
Sainsbury's and Morrisons Accused of Displaying Prohibited Tobacco Ads
UK Launches National Inquiry into Grooming Gangs
Families Seek Closure After Air India Crash
Gold Emerges as Global Safe Haven Amid Uncertainty
Trump Reports $57 Million Earnings from Crypto Venture
Trump's Military Parade Sparks Concerns Over Authoritarianism
×