Green electricity review

Green ratings for 31 energy retailers including Origin, AGL and Energy Australia.

Who's the greenest of them all?

In this review, we summarise the 2018 Green Electricity Guide to tell you: 

Electricity bills take a big bite out of Australian household budgets and are the number one cost of living concern for Australians. At the same time, many consumers are looking for more sustainable energy options. 

GreenPower, a scheme that is accredited by the federal government, helps you support renewable energy generation. When you buy a GreenPower product from your electricity retailer, you're paying for electricity produced by renewable power sources that meet a strict set of criteria for accreditation. 

Participating in GreenPower is one way you can reduce your carbon footprint, but it can also substantially increase your energy costs. Energy experts estimate GreenPower will cost you at least 10% more. But depending on what percentage of GreenPower you buy, your energy costs could increase by 25% or even 50%. With household electricity bills already averaging $1524 (plus GST), paying extra for GreenPower may not be feasible for many people.

If you do want to support renewable energy and can afford it, the Green Electricity Guide will help you find Australia's greenest electricity providers.

Their latest review compares and ranks 31 electricity providers according to their green credentials. 

For the third guide in a row, small energy companies Powershop and Diamond Energy came out on top and AGL received this year a most improved award for moving away from further investment in dirty fossil fuels.

What's new in this year's Green Electricity Guide

The Green Electricity Guide was developed by the Total Environment Centre (TEC) and Greenpeace as a resource for Australian consumers who want to support energy retailers with good environmental credentials.

The big three electricity retailers – AGL, EnergyAustralia and Origin – still supply about 75% 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. And there are some new kids on the blocks – Energy Locals and Enova Energy.

"What is most interesting and different about this year's guide is the emergence of a new breed of small retailers with a strong commitment to supporting local communities as well as renewable energy," says TEC's Energy Advocate Mark Byrne.

But the large energy retailers are gradually getting greener as well, with AGL and Origin committing to a long-term coal-free future. Both retailers have improved their rankings, and AGL has earned a most-improved award for championing a transition to renewable energy.

But compared with the greenest retailers, AGL still has a long way to go, says Byrne.

"Despite their improvements, AGL remains Australia's biggest carbon polluter and should be doing more, particular around closing down their inefficient, unreliable and high-polluting old coal power stations as a early as possible."

The best green electricity providers

The Green Electricity Guide scores retailers on seven criteria, including: 

  • how clean the electricity they generate or buy is 
  • their position on renewables and fossil fuels  
  • their support for solar households and the GreenPower scheme

The higher the percentage score, the greener the retailer.  For a detailed summary of the way the scores were calculated, see below.

The best two performers were:

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

Good points

  • Owns only renewable assets (via parent company), with emissions intensity close to zero
  • Strong public position against investing in fossil fuels
  • Does not have contracts to buy energy from fossil fuel power stations
  • Involved in and supportive of local energy trading, demand response and community energy

Bad points 

  • Higher than average GreenPower surcharge

Relatively small, privately owned, Melbourne-based retailer. Diamond is involved with renewable projects.

Good points

  • Owns only renewable assets, with zero emissions intensity
  • Strong public position against investing in fossil fuels
  • Supports local energy trading and offers specific tariffs for solar battery exports
  • Does not have contracts to buy energy from fossil fuel power stations

Bad points

  • Involvement in demand management and response programs and carbon offset programs unclear 
    (apart from the GreenPower scheme)

How did the biggest retailers compare?

While some retailers - Origin Energy, EnergyAustralia and AGL - have investments in some green initiatives, those investments are small compared to the money they have put into coal and gas generation. Origin Energy and AGL have also invested in coal seam gas (CSG).

Publicly listed company that owns gas- and coal-fired power plants. AGL have invested extensively in wind farms and large solar plants, but have also invested in CSG.

AGL were rated as the most improved retailer since the last edition of the guide in 2015, with special mention of its improvement made in the areas of policy and investment decisions by moving away from further investment into fossil fuels.

Good points

  • Strong public position against future investments in fossil fuels
  • Comprehensive and accessible energy efficiency products and involvement in demand management/response programs
  • Offers carbon offsets (other than GreenPower)

Bad points

  • Fined by the Environment Protection Authority for a pollution incident at the Bayswater Power Station in NSW in November 2015.
  • Extensive current investments in CSG and coal power stations, with emissions intensity above the average

Publicly listed company with more than 4.3 million customers. Origin owns coal and gas plants, but also invests in wind, solar and hydropower.

Good points

  • Comprehensive and accessible energy efficiency products and involvement in demand management and response programs
  • Supports local energy trading
  • Good offers for solar customers

Bad points

  • Publicly supports mining and generation of energy from coal seam gas (CSG)
  • Extensive current investments in CSG and coal power stations, with emissions intensity above average

Foreign-owned private company. EnergyAustralia owns coal-fired power plants and is not clearly opposed to coal or CSG. However, EnergyAustralia also invests in wind farms.

Good points

  • Comprehensive and accessible energy efficiency products and involvement in demand management and response programs
  • Offers carbon offsets (other than GreenPower)
  • Good offers for solar customers

Bad points

  • Investments in coal power stations, with emissions intensity above average

How green is your electricity retailer?

About the Green Electricity Guide

This article summarises the results of the 2018 Green Electricity Guide.

The Total Environment Centre (TEC) and Greenpeace produce the Green Electricity Guide that we summarise in this article. Alviss Consulting was contracted for conducting the survey as well as analysing and scoring of the results. This article covers the third edition of the guide, following editions in 2014 and 2015.

TEC received funding for this project from Energy Consumers Australia (ECA).

Retailers are scored on:

  • The carbon emissions intensity of the power stations some retailers own – 20%
  • Support for energy sector decarbonisation – 15%
  • Carbon offsets including GreenPower sales and pricing – 10%
  • Support for local and renewable energy including offers to solar customers – 20%
  • Policy positions on and investment in fossil fuels (coal and coal seam gas) – 15%
  • Energy efficiency and demand management and response – 10%
  • Corporate sustainability, transparency and responsibility – 10%

Where does your retailer buy its power?

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.

So, you could buy electricity from a retailer which owns renewable energy power plants, but some of the energy they provide could come from coal-fired power stations. And some retailers do not own power plants and buy all their power from other retailers. 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.

Power-greening tips 

The electricity sector is one of the dirtiest industries in Australia, with coal the main culprit. If you want to go green and live in WA, NT, Tasmania or rural Queensland, where the energy market is regulated, you may still be able to choose a GreenPower options with your retailer.

In the ACT, NSW, SA, south-eastern Queensland and Victoria you can choose a green retailer. But switching plans can be complicated.

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 buy GreenPower if you can.

Jargon buster

  • 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.
  • GreenPower GreenPower is government certified renewable energy. Paying extra for GreenPower means that your retailer sources renewable energy to be added to the grid on your behalf. More about GreenPower.