Octopus Energy has expanded into China for the first time after launching a joint venture with the country’s PCG Power.

The move by Octopus will allow it to trade renewable energy across the world’s largest clean energy market.

The UK’s largest energy supplier announced the strategic partnership amid Prime Minister Sir Keir Starmer’s visit to China, designed to improve economic ties between the countries.

Octopus said the new business, called Bitong Energy, will bring together “China’s leading and fastest-growing investor and solutions provider in the commercial and industrial renewable energy sector, with Octopus’ world-leading cutting-edge technology”.

Bitong is aiming to trade up to 140 TWh (terawatt-hours) of renewable power a year – roughly equal to the UK’s entire current green energy output – generating around £50 million in annual profits, with half of this expected to return to the UK.

The firms have hopes that the business will be valued at around £500 million within five years.

The joint venture will launch first in Guangdong province with plans to then expand into new regions.

Greg Jackson, founder and chief executive of Octopus, said: “China’s investments in scale and innovation have made solar, wind energy and batteries cheaper.

“Now there’s a huge opportunity for Britain to succeed as we build the solutions that use these products to cut the cost of electricity.

“Our partnership with PCG aims to do exactly that – exporting our world-class energy capabilities to grow our economies and speed up the shift to cheaper, cleaner, more secure energy.”

Li Wenxuan, chairman and chief executive of PCG Power, said: “We deeply value this strategic partnership with Octopus Energy.

“It marks a defining milestone for PCG Power and underscores our commitment to pioneering the future of energy in China.

“By integrating Octopus Energy’s world-class technology and algorithmic expertise with our profound local insights and trading capabilities, we will generate powerful synergies.”