ABOUT THE GUIDE
The Green Electricity Guide has been developed to help inform Australians about which electricity retailers really are as ‘green’ as they say they are.
Up till recently, Australians concerned about where their electricity comes from and who is selling it haven’t had much of a choice. And in some states and territories that’s still the case, with no choice at all.
But increasingly many of us have the choice to purchase from a range of electricity retailers with very different environmental credentials. There is a growing difference between the old retailers which still remain dominant and rely on burning fossil fuels in the power stations they own, and a newer breed of more forward-looking companies that are providing cleaner energy in smarter ways.
What do the rankings mean?
Green - These companies receive high scores on most criteria. They typically generate all or most of their electricity from renewable sources, do not invest in or undertake coal seam gas activities, do not burn native forests for electricity generation and mostly are advocates of expanding Australia's Renewable Energy Target.
Orange - These retailers perform moderately against the environmental criteria used in the Guide. They are mostly either government owned corporations or 'pure' retailers which do not own power stations of their own. As a result, they might have no position on the Renewable Energy Target. Pure retailers are also usually indifferent to whether they source electricity made from renewables or fossil fuels.
Red - These companies perform the worst against the environmental criteria used in the Guide. Many invest heavily or even exclusively in coal and gas fired power stations and have been actively undermining Australia's Renewable Energy Target. Some of these companies offer GreenPower options to offset or displace the mostly ‘dirty’ (coal and gas fired) grid energy they sell. However, increasingly consumers are looking to support companies that offer better environmental performance.
How are the companies ranked?
Twenty electricity retailers which sell to households are included in this Guide. They have been assessed on seven criteria using both publicly available information and information received from the companies following a survey sent to them. Nearly all the companies responded to the survey.
1. Renewable energy investment
The National Electricity Market currently generates about 85 per cent of its energy from coal and gas, and 15 per cent from renewables. Unlike in the UK and some other countries, the information is not publicly available to enable us to calculate these percentages for the fuel mix of each retailer. This would require access to the range of power purchase agreements and other hedging contracts which are confidential at present.
Instead, we have focused on two identifiable measures related to their likely fuel mix: their renewable energy generation as a percentage of their entire electricity generation portfolio (criterion 1), and the emissions intensity of the energy generated from these power stations (criterion 2).
For criterion 1, we have used the theoretical or ‘nameplate’ capacity to indicate the relative percentages of fossil fuelled or renewable energy generation owned by each retailer or parent company. Pure retailers of electricity with no generating capacity are not considered to invest in renewable energy and therefore receive no points. However, retailers with known links to companies are seen to be part of a broader corporate structure and assessed accordingly.
The information for this criterion is based on the ‘nameplate’ capacity recorded in the Generator Information Data obtained from the AEMO website (published 14 May, 2014). Data downloaded 14 July 2014 and available here.
Data was sorted and aggregated into gentailer groups either through direct attribution or by using company data (websites/annual reports). The generator’s owner was attributed to the retailer on the basis of being a related corporate entity (e.g. a subsidiary or co-owned by the same parent company).
Nameplate capacity data for gentailers not contained in the AEMO data were sourced from company websites, company annual reports and the Independent Market Operator of WA (IMOWA). No name-plate capacity was found for Horizon Power. Instead, generating activity, sourced from the company Annual Report, 2012-13, was used. This data is available here.
2. Emissions intensity
Retailers were assessed on the emissions intensity of the energy generated by the power stations owned by electricity retailers and associated companies. So while criterion 1 is about the potential capacity of power stations, criterion 2 measures the environmental impact of their actual output over a whole year.
The main data source is Clean Energy Regulator, Designated Generation Facilities Report 2012-13, except where there have been major changes in generation or ownership in 2013-14, where company ownership structures are not apparent, or where the energy output of a retailer’s only generation assets were below the NGERS threshold.
Emissions intensity is calculated in tonnes of greenhouse gas emissions (direct and indirect as per NGERS Scope 1 and Scope 2) per megawatt hour of electricity generated. This intensity figure can range from close to zero (for wind and hydro), through 0.4 to 0.8 for gas fired stations, to 0.8 to 1.4 for coal-fired power stations.
These figures relate to the electricity from generation assets owned by the retailer, not the electricity they sell from all sources (including the spot market and power purchase agreements), for which there are currently no clear and consistent data. Retailers with no generation assets were accorded the average emissions intensity of all power stations in the NEM of 0.73 tonnes CO2/MWh.
3. GreenPower options
Retailers have been examined for the GreenPower options made available, with full points going to those which offer 100% GreenPower. When you choose to purchase GreenPower your electricity retailer charges you a premium that ensures your purchase goes towards additional investments in renewable energy above the mandated amount required under Australia’s Renewable Energy Target. Where a retailer sells GreenPower but does not support it or encourages consumers to shun it in favour of the retailer’s own non-accredited product, they were not awarded points under this criterion.
If you want to support even more renewable energy growth in Australia, you can buy 100% GreenPower products as well as choosing a greener retailer. You can do this through some retailers or through non-profit groups such as Community Climate Chest
4. A good deal for solar?
Retailers were assessed under this criterion for solar export prices above any minimum (where it exists) specified under state and territory laws, averaged across the number of states and territories in which they operate. (This guide isn't intended to help you find the best retailer for solar, so if you want a good deal for solar, you'll need to shop around and read the fine print. Higher consumption charges and fixed daily fees cost solar customers more with some retailers, and terms and conditions can come with hidden traps.)
5. Position on Australia’s Renewable Energy Target
The Renewable Energy Target (RET) is federal legislation which mandates that 41,000 gigawatt hours of Australia’s electricity demand be supplied by renewable sources by 2020. This policy has been instrumental in driving investment into clean energy generation such as wind and solar power. Electricity retailers have been assessed on their position on the RET including whether they:
- Support the existing RET
- Support an expansion of the RET
- Support the small-scale Renewable Energy Scheme (SRES)
- Are publicly advocating in favour or against the RET
6. Coal seam gas (CSG) investments
Retailers were assessed on whether they are actively investing in unconventional gas mining including coal seam gas. Companies indicating no plans to invest in unconventional gas mining were assessed more favourably.
7. Native Forests
NSW regulations now allow for the burning of native forest byproducts to generate electricity. The current Federal Government also has a policy of allowing renewable energy certificates to be created from this activity, although that has not been legislated to date. All retailers were assessed on whether they are prepared to rule out purchasing electricity from the burning of native forest vegetation.
Link to company information
Spreadsheet with details on information used to assess companies here.
Total Environment Centre: “What price solar? - Government tariffs and retailer export prices”
Clean Energy Council: “Consumer Guide to Purchasing Solar Panels”