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Green electricity review

We rate 23 energy retailers including Origin, AGL and Energy Australia on their green credentials.

Best green electricity retailers revealed

Last updated: 18 November 2015

Prices may have come down in recent months, but electricity still takes a big bite out of the household budget – it's consistently been the number one cost concern in our Consumer Pulse surveys.

So paying extra for GreenPower might be the last thing on your mind. But if you do want to support renewable energy and reduce your environmental impact on the planet, then our Green Electricity Guide will help you find Australia's best green electricity providers.

Best green electric providers
How did AGL, Energy Australia and Origin score?
scores and features for 23 electricity providers

Reverse-cycle air-conditioners keep you cool in summer and can be used for heating in winter. They cause less carbon dioxide to be produced in power plants burning fossil fuel than other kinds of electric heaters. See which models score best in our large air-conditioner reviews.

Green power

If you care about the planet, it's time to act. Australia has one of the highest greenhouse gas emissions per person in the industrial world, and the vast majority of our electricity still comes from coal- and gas-fired power stations.

The big three electricity retailers – AGL, EnergyAustralia and Origin – still supply the majority of Australian households. But smaller retailers are snapping at their heels, and some have built their business models on green energy.

The 'greenest' of these – Powershop and Diamond Energy – are way ahead of the big three. We've scored retailers on how clean the electricity is that they generate or buy, their position on renewables and fossil fuels, and their support for solar households and the GreenPower scheme. See the table.

Best green electricity providers

Powershop – 86%

Melbourne-based Australian retail arm of New Zealand-based public company, Meridian Energy; Meridian owns two wind farms in Australia.

Good points

Public policy positions against coal and coal seam gas (CSG) investments
Against buying energy generated by burning wood waste from native forests
Good offers for solar customers

Bad points

100% GreenPower surcharge slightly above average at 6 cents per kilowatt hour
(6c/kWh), but has highest percentage of GreenPower sales

Diamond Energy – 85%

Relatively small, privately owned, Melbourne-based retailer. US solar company Sunpower is one of their shareholders. Diamond owns two mid-scale biogas power plants and is involved with other renewable projects.

Good points

Public policy positions against coal and CSG investments
One of the few retailers publicly committed to not buying electricity generated by burning wood waste from native forests
100% GreenPower surcharge below average at 5.5c/kWh
Good offers for solar customers

Bad points

Small proportion of GreenPower sales relative to total sales, but Diamond says it's actively trying to change this

How did the biggest retailers score?

Origin Energy, EnergyAustralia and AGL all have investments in some green initiatives, but those investments are small compared to the money they have put into coal and gas generation. They've also all invested in CSG.

Origin Energy – 57%

Publicly listed company and Australia's biggest electricity retailer with more than 4.3 million customers. Owns one large black coal and several gas plants; invests in wind, solar and hydropower.

Good points

Origin told us it's committed to exiting its coal investments and to no further investments in coal in the 2030s
Against buying energy generated by burning native forest wood waste
Lowest surcharge of retailers surveyed (3.9c/kWh for 100% GreenPower).
Good offers for solar customers

Bad points

Major investor in CSG in Queensland

AGL – 51%

Publicly listed company; the second largest electricity retailer. Owns gas- and coal-fired power plants. Invested extensively in wind farms and large solar plants but also invested in CSG.

Good points

In 2015 committed to close existing conventional coal-fired plants by 2050 and to not acquire or finance new ones
100% GreenPower surcharge below average (5.5c/kWh)
Against buying energy generated by burning native forest wood waste
Top scores for transparency

Bad points

Gives solar customers lower pay-on-time discounts than other customers
Has been trying to develop CSG in the NSW Hunter Valley

Energy Australia – 49%

Foreign-owned private company and third-largest electricity retailer. Owns coal-fired power plants; part-owns one wind farm and is involved with others.

Good points

100% GreenPower surcharge below average (5.2c/kWh)
Top marks for transparency – only retailer to disclose carbon emissions of all electricity sales to us
Against buying energy generated by burning native forest wood waste

Bad points

Invests in CSG and coal
Gives solar households lower pay-on-time discounts

Power-greening tips

The electricity sector is one of the dirtiest industries in Australia, creating about one-third of the nation's carbon emissions. So it's high time to clean it up.

Many consumers can now choose their energy retailer (except those in WA, NT, Tasmania and rural Queensland). Check out these websites to compare prices: energymadeeasy.gov.au in the ACT, NSW, Queensland, SA and Tasmania, or mpp.switchon.vic.gov.au in Victoria.

Take these steps to reduce your carbon footprint:

Reduce your energy bills by saving energy and installing insulation.
Consider rooftop solar power.
Choose the greenest retailer available and GreenPower if you can.

How green is your electricity retailer?

Electricity retailer	Score (%)	Low emissions score	Solar score (%)	States available	100% green power surcharge (cents/KWh)
Powershop	86	100	87	NSW,VIC	6
Diamond Energy	85	100	91	NSW, SE QLD, SA, VIC	5.5
Momentum Energy	69	100	57	NSW, SA, VIC	10.4 (A)
Aurora Energy	65	100	78	TAS	6.023
Red Energy	60	97	82	NSW, SA, VIC	5.83
Lumo Energy	59	97	82	NSW, SE QLD, SA, VIC	5.3 (B)
ActewAGL	58	31	84	ACT, NSW	7.5
Origin	57	41	81	ACT, NSW, SE QLD, SA, VIC	3.97
AGL	51	31	41	NSW, SE QLD, SA, VIC	5.5
EnergyAustralia	49	22	48	ACT NSW, SE QLD, SA, VIC	5.225
Dodo Power & Gas	49	30	57	NSW, SE QLD, SA, VIC	6
Click Energy	47	30	64	NSW, SE QLD, VIC	8.16 (B)
Powerdirect	47	31	54	NSW, SE QLD, SA, VIC	6.2
Ergon Energy	46	40	78	QLD	6 (C)
Horizon Power	45	55	96	WA	Not offered
Synergy	42	34	84	WA	UD
Jacana Energy	41	57	100	NT	Not offered
Pacific Hydro	41	90	NA	SA,VIC	Not offered
GloBird Energy	36	30	39	VIC	Not offered
CovaU	35	30	55	NSW, VIC	Not offered
Alinta Energy	34	42	45	SA, VIC	Not offered
Simply Energy	29	9	51	NSW, SE QLD, SA, VIC	48 (B)
People Energy	19	30	NA	VIC	Not offered

Table notes

UD = Undisclosed/Not disclosed and could not be found in publicly available documents/website

(A) Has both an explicit GreenPower surcharge and higher per kW hour GP tariff. Figure is the calculated difference between the retailer's general tariff and their GP tariff, plus the GreenPower surcharge.
(B) No explict GreenPower surcharge, but instead a higher per kW hour GP tariff. Figure is the calculated difference between the retailer's standard tariff and their GP tariff
(C) Company does not have a cents/kWh surcharge for 100% GreenPower. Instead customers buy set kWh blocks of GP, independent of their actual consumption. This figure is the calculated c/kWh surcharge based on the cost of the largest GP block available.

Notes:
Low emissions score: Score is based on CO2 emissions per unit of electricity generated of all generators owned by the retailer or parent/subsidiary companies of the retailer. Retailers with no associated generation assets are given the average score for the national electricity market. Where the information wasn't disclosed by retailer, it's taken from company annual reports, and if not available, estimated by ISF.
Solar score: Scored on retailer's solar export price and a comparsion of their cheapest offers to solar customers and non-solar customers. Both scores are averaged across all states where the retailer has a solar offer. NA means the retailer has no export prices or retail offers for solar customers. Source: Backroad Connections, who undertook the research on solar price and market offers via retailer aggregator websites, such as www.energymadeasy.gov.au.
100% Greenpower surcharge: The additional premium/surcharge that the retailer charges for 100% GP residential product. Where a retailer does not offer 100%, we use the equivalent price for 100%, based on the percentage they do offer.

About the Green Electricity Guide

This article summarises the results of the 2015 Green Electricity Guide.

CHOICE collaborated with the Total Environment Centre (TEC), Greenpeace and the Institute for Sustainable Futures at the University of Technology Sydney (UTS) to bring the Green Electricity Guide to Australians. TEC received funding for this project from Energy Consumers Australia (ECA) as part of ECA's grants process for consumer advocacy projects and research projects for the benefit of consumers of electricity and natural gas. The views expressed in this document do not necessarily reflect the views of Energy Consumers Australia.

Scoring by TEC and UTS.

Retailers are scored on:

The carbon emissions intensity of the power stations some retailers own – 20%
Renewable energy policy position and new investments – 10%
Support for GreenPower – 20%
Offers to solar customers – 15%
Policy positions on and investment in fossil fuels (coal and coal seam gas) and burning native forests – 15%
Energy efficiency performance and promotion – 10%
Transparency in sustainability reporting – 10%

The following retailers did not co-operate with us and were scored on their publicly available information, such as company websites, government data and annual reports where possible. Otherwise they were given no score or an industry average as appropriate: Dodo Power and Gas, Horizon Power, Jacana Energy, Pacific Hydro, People Energy, Simply Energy, Synergy.

What about gas?

Conventional natural gas is a greenhouse-polluting fossil fuel, so try to reduce how much you use. Electric appliances such as your reverse-cycle air-conditioner are in many cases cheaper to run than gas appliances such as your gas heater.

CHOICE tests include running costs for household appliances. If you're concerned about coal seam gas, the big three – Origin, AGL and EnergyAustralia – as well as Alinta all have CSG investments in NSW or Queensland, so you could avoid doing business with them.

Where does your retailer buy its power?

Naturally, the retailers that generate energy sell you some of it from their own power stations and they may also sell some to other retailers. They may buy from other power plants and through contracts with third parties. But these purchases are not public, and only EnergyAustralia tried to give us a figure for the carbon emissions of all their sales.

So, you could buy electricity from a retailer which owns renewable energy power plants, but some of the energy they provide comes from coal-fired power stations. While retailers in the UK must make the "fuel mix" of all electricity sales available, Australian retailers aren't required to do this.

We think it's time for power companies to come clean on where they buy their electricity.

Jargon buster

Renewable Energy Target (RET) A federal government policy requiring electricity retailers to buy renewable electricity and thereby encourage investment in green energy. In July 2015, the RET of large-scale renewable energy such as wind and solar farms or hydro-electric power stations was reduced from 41,000GWh to 33,000GWh renewable energy by 2020.

Biogas Methane-rich gas produced, for example, by using bacteria to break down organic waste.

Coal seam gas (CSG) Gas extracted from coal deposits. To extract the gas, fluid is usually injected under pressure in the rock in a process called fracking. Some of the risks are unknown, but could involve gas escaping or chemicals entering the groundwater supply.

Conventional natural gas Gas extracted from sandstone. The gas is stored in the sandstone at high pressure and therefore can often flow to the surface without the need to pump.

Buying energy generated by burning wood waste from native forests. This has been included as a renewable resource under the RET since July 2015. There are concerns this could encourage unsustainable harvesting of native forests.

GreenPower GreenPower is certified renewable energy. Paying extra for GreenPower means that your retailer buys renewable energy above the legislated RET. This is the most effective way to support renewable energy.