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Powershop shock and the struggle to find green energy retailers

Lack of information about the green credentials of energy retailers stops people making environmentally conscious choices.

switching_to_greener_energy
Last updated: 24 January 2022
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Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Need to know

  • Customers say there’s a lack of information on the green credentials of various energy providers
  • Some Powershop customers are looking to move following its acquisition by Shell
  • Research says a growing number of Australians want to make green choices in the energy space

There's a lot to think about when choosing an energy provider. While price is a big factor for many people, environmental credentials are equally important for some. 

Research shows a growing number of Australians want to make environmentally conscious choices when it comes to choosing their electricity provider, but lack of information and potential greenwashing are proving to be hurdles.

And the market has become even more confusing recently, since one energy retailer that sold itself to customers as the green alternative was bought by multinational oil and gas company Royal Dutch Shell.

Green energy retailer Powershop sells to Shell

Australian online energy retailer Powershop was founded in 2007 in New Zealand and launched in Australia in 2014. Since then it amassed 185,000 customers in Australia by selling itself as the 'greenest energy provider' in the market. 

But the recent acquisition of Powershop by Shell, a global behemoth mostly known for large-scale extraction of oil and gas, has prompted some Powershop customers to look at moving their households to another provider.

Powershop was tied for first place in the most recent Green Electricity Guide

Powershop was tied for first place in the most recent Green Electricity Guide, put out by environmental non-government organisation Greenpeace in 2018. Greenpeace plans to update the guide in February 2022, and says Powershop will now likely rank much lower down the scale.

Activist group Getup had previously urged their followers to switch to Powershop and claims to have mobilised "tens of thousands" of people to do so. They are now urging their supporters to shop around since the Shell acquisition.

Powershop customers flee

Melbourne-based Shaz says that price is a concern for her when choosing an electricity retailer, but so is the environment.

"I won't switch to one that isn't actively prioritising green energy," she tells CHOICE.

Shaz switched to Powershop around four years ago, but is now looking to switch again. She is currently deciding between Amber and Cooperative Power, and says the process of choosing a new environmentally conscious energy provider has been time-consuming and confusing.

It would definitely be useful to have an easier way to choose energy providers that consider the environment

Shaz, energy customer, Melbourne

"It would definitely be useful to have an easier way to choose energy providers that consider the environment," she says.

Margaret, also based in Melbourne, is in a similar boat. A long time Powershop customer, she's planning to switch to Cooperative Power, mainly because her environmentally conscious friends have recommended it to her.

"I don't want to be fuelling fossil fuels or unethical companies," Margaret says.

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Finding the right energy-conscious provider can be time-consuming and confusing.

Barriers to switching

Dr Rebecca Huntley is a researcher and consultant on climate change communication, and author of the book 'How to Talk About Climate Change in a Way That Makes a Difference'.

She tells CHOICE that her research shows about a quarter of all Australians have considered switching their energy provider to a more environmentally friendly one, though a much smaller number of people, fewer than one in ten, have actually done it.

About a quarter of all Australians have considered switching their energy provider to a more environmentally friendly one

She says this suggests there are barriers between thought and action for the more environmentally conscious consumer when it comes to switching energy retailers. These barriers may be related to not knowing how much of an actual difference changing providers would make, or suspecting energy retailers of 'greenwash' or of making inflated environmental claims.

"[People might be unsure] about what it means. 'Is it a drop in the ocean?'," she says.

"The other thing is around social opportunity. It might not register really high on the list of priorities, but it is there. If friends and family aren't doing it, aren't discussing it, [that makes change less likely]," she adds.

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The Green Electricity Guide looks at several criteria, including polices on coal.

More green energy guidance needed

There are currently no government guides or star ratings when it comes to the green credentials of energy providers. But Australian Energy Regulator chair Clare Savage told an energy forum in October 2021 that it was being considered by the regulator. 

"One of the things we have been looking at as part of our consumer strategy moving forward is whether we need better comparison tools," she said.

Meanwhile, Greenpeace will release its third updated Green Electricity Guide in February 2022. 

One of the things we have been looking at as part of our consumer strategy moving forward is whether we need better comparison tools

Australian Energy Regulator chair Clare Savage

Dr Nikola Casule, Greenpeace Australia Pacific's head of research and investigations, says the most important thing for producing a guide is independence from any financial relationship with the industry or electricity providers. 

He says the Green Electricity Guide uses around seven different criteria to rank energy providers, including their investment in renewable energy production and their policies on supporting coal.

"The purpose of the guide is twofold. It's to provide the general public with a completely independent, reputable ranking of electricity retailers in Australia by how environmentally friendly they are, including things like their emissions and their policies on coal, solar and more," Casule tells CHOICE. 

"It's a really useful tool, when people are looking to improve their impacts on the environment. A quite impactful personal change that anybody can make is switching to a greener retailer." 

[The Green Electricity Guide] is to provide the general public with a completely independent, reputable ranking of electricity retailers in Australia by how environmentally friendly they are

Dr Nikola Casule, Greenpeace head of research and investigations

"And the second element is that the guide falls into our ongoing campaign targeting AGL, which is Australia's biggest climate polluter (when it comes to greenhouse gas emissions)," he adds. 

While the Greenpeace guide is certainly useful, it seems more information is needed. Outside of that, customers like Shaz and Margaret are left to rely on the advice of like-minded friends.

"We certainly need more information, that would be a great idea," Margaret says.

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