The Green Electricity Guide
The Green Electricity Guide
About the guide
The Green Electricity Guide is a fully independent assessment of Australia’s electricity retailers. It is designed as a tool to inform consumers about their options to switch to a greener electricity provider. This version of the guide has been researched and created by Greenpeace with advice and support from the Total Environment Centre, who remain ongoing partners to the project and co-creators of the 2014, 2015 and 2018 versions of the guide.
Why the guide matters
When looking at Australia’s greenhouse gas emissions and contribution to climate change, the greatest source of emissions comes from our energy generation, which is dominated by the electricity sector. Australia has one of the most polluting electricity grids in the world and is the only OECD country in the G20 that relies on coal for more than half of its electricity supply. If we want to address climate change as a nation and as individuals, one of the most effective ways to do this is by transforming our fossil fuel heavy electricity sector to one that is 100% renewable as fast as possible. New-build renewable electricity generation is now cheaper than that produced by fossil fuels, and advances in storage and grid management technology means that renewables can increasingly do the job of fully meeting Australia’s electricity needs.
Australia’s electricity sector landscape varies across states and territories. This means that consumers will have different options for their electricity provider depending on where they live.
In simplified terms, for consumers there are three key groups to consider in the electricity supply chain:
- Generators: these companies generate electricity, either through the burning or combustion of fossil fuels (coal and gas) or through renewable energy (solar, wind, hydro) and storage such as batteries. This electricity is provided to the electricity network and sold to electricity retailers via direct contracts, via energy products on the Australian Stock Exchange or via purchases on the wholesale electricity spot market. Some generators are also retailers (known as “gentailers”) and sell directly to household consumers.
- Network service institutions and companies: these control the network by distributing and transporting electricity. In the National Electricity Market, which covers all states and territories except for Western Australia and the Northern Territory, the wholesale electricity spot market is managed by the Australian Energy Market Operator.
- Retailers: these are the electricity providers that consumers interact with, acting as facilitators between consumers and the market. They purchase a share of electricity from the wholesale spot market, directly from electricity generators, via financial instruments on the Australian Stock Exchange or a combination of all. They then on-sell electricity at different prices to customers.
There are three major electricity networks and markets in the country. The largest of these is the National Electricity Market, or the NEM, which operates in New South Wales, Queensland, Victoria, South Australia, Tasmania and the ACT. This is one of the world’s largest interconnected electricity systems, stretching approximately 5,000 km. Western Australia has its own separate network and market - the Wholesale Electricity Market (WEM) for the South West Interconnected System (SWIS) - as does the Northern Territory. This is due to the distances between the Eastern, Northern and Western states and the difficulty in transmitting electricity over such long distances.
Although Australia has made great strides in beginning to adopt and invest in renewable energy, it has a long way to go. Today, around 76 per cent of the country’s electricity still comes from the burning of fossil fuels. All of the electricity being used in Australia, unless the user is not connected to the grid, comes from the same mix of renewable and fossil fuel generation. The best renewable electricity providers ensure that their share of electricity provided to the grid is 100% renewable, while other retailers may contract directly from coal and gas power stations and/or buy from the wholesale spot market - a market which is still largely powered by fossil fuels.
As a consumer, the most effective way to reduce your own carbon footprint and support renewable electricity generation and investment in Australia is to contract with an electricity provider who generates or contracts a high amount of renewable energy. Support and tools for customers to use electricity when renewable energy generation into the grid is high is an additional factor that helps reduce climate pollution. Consumers can also make a positive impact on the climate and environment by ensuring that their provider or its parent company does not extract fossil fuels, is being proactive about supporting the build of new renewable energy generation, doesn’t engage in greenwash, and doesn’t cause local environmental harm in the generation of electricity. The Green Electricity Guide acts as a tool to inform consumers about the best and greenest electricity providers.
Greenpeace assessed 48 electricity providers Australia-wide based on the criteria and scoring methodology outlined below. All companies were sent a survey that covered the criteria of the guide and were given an opportunity to provide additional information pertinent to their climate policies and impacts. Greenpeace also met with any company wishing to do so. Data was supplemented with a thorough review of each provider’s website; information from the Clean Energy Regulator’s National Greenhouse and Energy Reporting scheme; submissions to the Energy Security Board’s Post-2025 market design; the Coal Impacts Index; the Australian Energy Market Operator’s Generating unit expected closure year database; and public statements from CEOs where applicable.
A small number of providers were not included in the guide. This was due to a number of factors, including insufficient data made available to the public, or the retailer being a relatively new entrant that has not been operating long enough to be meaningfully assessed.
Each retailer was assessed and scored to determine a final score out of 10 to two decimal places. This score was converted into a star rating out of 5 (with 10 possible scores to represent half stars - numbers were rounded up or down accordingly:
- 9 - 10 = 5 stars;
- 8 - 8.9 = 4 ½ stars;
- 7 - 7.9 = 4 stars;
- 6 - 6.9 = 3 ½ stars;
- 5 - 5.9 = 3 stars;
- 4 - 4.9 = 2 ½ stars;
- 3 - 3.9 = 2 stars;
- 2 - 2.9 = 1 ½ stars;
- 1 - 1.9 = 1 star;
- 0 - 0.9 = 0 stars.
Rationale and approach for criteria for 2022
The following are the 6 main criteria and rationale for inclusion. These were developed based on the criteria from the last edition of the guide in 2018, Greenpeace focus group research of consumers in March 2021 on perceptions of Australia’s big electricity companies, and Greenpeace’s extensive knowledge on climate policy and the Australian electricity sector.
Providing clean, renewable energy (weighting 35%)
The overall estimated climate pollution from the electricity generated and/or sold by an electricity provider was given the heaviest weighting as from a consumer perspective it substantially represents which provider is “green” or not.
The primary input into this score was the estimated emissions intensity of electricity sold to customers. Emissions intensity is a measure of the amount of CO2 per output of electricity (given in MWh units). This tells how dirty or clean the power is that a provider generates and/or sells to consumers. The annual average emissions intensity of the National Electricity Market for 2021 was 0.69t CO2/MWh. Renewable electricity produces an emissions intensity of 0t CO2/MWh.
While data is more readily available about the emissions intensity of electricity generation assets (ie coal and gas power stations and wind and solar farms) and therefore the overall emissions intensity of a provider's generation assets (if they own some), calculating the estimated emissions intensity of the electricity sold to customers is a more complex task.
The first consideration is that, in a strict technical and physical sense, all electricity generated enters the general electricity pool through transmission wires and substations. This means it is difficult for a provider to claim their particular electricity generated or purchased from a generator reaches their specific household customers. That is, once electricity is generated there is no way of distinguishing coal-generated from renewable-generated electricity as it travels through transmission wires to homes. This strict technical view has been reached by the ACCC in a ruling to fine Momentum Energy in 2016 for their renewable electricity advertising claims. In this case the ACCC argued that despite Momentum Energy being backed by Hydro Tasmania’s substantial hydro-electric generation fleet, the company could not claim the electricity delivered to customers came directly from the dams.
This ACCC ruling has deterred at least one provider from making any claims about renewable electricity, even though they build and generate substantial renewable assets.
But despite the ACCC Momentum Energy precedent and the physics of the electrical grid, it is possible to give an estimate of emissions intensity sold to customers. This is calculated by subtracting the proportion of renewable energy generated or contracted from the grid average of emissions intensity. In the absence of concrete emissions intensity data, it is a comprehensive way to attempt to better measure the climate impact of a provider.
This leads to a further complexity in calculating estimated emissions intensity sold to customers: the lack of uniform and transparent data.
Not all electricity providers were able to provide an estimated emissions intensity of the electricity they purchase and sell on to customers. This is because a provider can generate their own electricity from renewable sources, purchase electricity through a variety of contracts with an electricity generator (either directly or via the Australian Stock Exchange), or purchase on the electricity spot market overseen by the Australian Energy Market Operator. Only some providers were able to give a breakdown of the percentage of electricity purchased according to these different sources and therefore the estimated emissions intensity of electricity sold to customers. Some providers raised the issue of “commercial in confidence” as an additional barrier to providing this data.
Many providers source the majority of their electricity from the coal-dominated spot market, with very little or no effort to counter this with contracts from renewable energy generators. Some in this category have sought to claim “carbon neutrality” through carbon offsets equivalent to the electricity consumed by customers. Greenpeace has covered the issue of offsets extensively in our recent report, Hero to Zero: Uncovering the truth of corporate Australia’s climate claims. In summary, carbon offsetting is no substitute for reducing fossil fuel use, particularly in the electricity sector where the technology is readily available to make the transition now. In reviewing the carbon offset strategies of electricity providers for this guide, Greenpeace discovered many were heavily reliant on cheap and questionable international carbon offsets. For this reason providers are not given support for heavy use of carbon offsets.
The four major coal power generators scored in the guide (AGL, Origin, Energy Australia and Alinta) and their subsidiaries have been given 0 marks because the emissions intensity of their generation assets are greater than the NEM average and all four companies are among Australia’s 10 worst climate polluters.
A clear outcome from researching this criterion is the need for a transparent, regulated approach to emissions intensity data in order to reveal the true climate impact of a provider.
In particular, a regulated guarantee of origin or equivalent scheme, whereby providers can credibly claim renewable energy generation or contracts tied to the electricity used by customers, would provide greater transparency in the sector. While a de-facto scheme exists through Large-Scale Generation Certificates (LGCs), this was designed to help Australia reach a national renewable energy target of 20% by 2020. That target has been met and the date passed, therefore the tool no longer sufficiently meets current needs, particularly from the perspective of consumers attempting to verify renewable energy claims from providers.
Ending coal use by 2030 (weighting 20%)
Australia has the worst climate pollution from coal power generation in the world on a per capita basis. Overall Australia also has one of the most polluting electricity grids in the world and is the only OECD country in the G20 that relies on coal for more than half of its electricity supply. Major and reputable international institutions have called for Australia to phase out coal from its electricity grid by no later than 2030 in order to reach the goals of the Paris Climate Agreement, including the International Panel on Climate Change, the United Nations, and the International Energy Agency.
This issue is therefore a critical test of the climate credentials of an electricity provider: are they aligned with the 2030 cut off date to stop burning coal?
This criterion was weighted heavily given it reveals the true climate commitment of the provider and cuts through greenwash and spin. Where a provider was not generating electricity themselves, they were asked if they contracted from a generator that planned to continue burning coal beyond 2030. Providers buying the majority of their electricity from the spot market by default are purchasing from generators with coal closure dates beyond 2030 (as the largest generators such as AGL, Origin, Energy Australia, and Alinta all have closure dates well beyond 2030 and are the major contributors of electricity into the spot market), so were scored accordingly.
Where a provider failed to respond to (repeated) requests for information via the survey and follow up emails, the provider scored 0 for this criterion.
Halting fossil fuel expansion (weighting 20%)
The announcement of Shell’s acquisition of Powershop in 2021 demonstrated the strong consumer interest in and concern about the role a provider plays in furthering the climate crisis through the continued expansion of fossil fuel mining. In this case, Powershop has reportedly lost more than 6,000 customers since the acquisition announcement.
In addition, Snowy Hydro, the owner of electricity providers Red and Lumo, is building a new large and polluting gas power generator in the Hunter Valley, despite strong evidence this fossil fuel generator is not required. In this case Snowy Hydro is propping up climate-polluting gas at a time when they should be doubling down on renewable energy.
The Green Electricity Guide provides consumers with the data and contextual information needed to make a decision on their electricity provider. For this reason, it was critical to include halting fossil fuel expansion as a key criterion.
This criterion was assessed by researching whether the electricity provider was engaged in fossil fuel mining or building coal or gas generators, including whether the majority owner of each electricity provider was doing so. This information was gathered from website reviews and via survey responses.
Consumers want to know if their provider is a good climate actor or is engaging in greenwash. For this reason this criterion is heavily weighted as it cuts through greenwash and spin, revealing the true operation of a provider or its majority-owned company. If a provider claims to be clean and green but also engages in coal, oil and gas extraction or is building new coal and gas power stations, they have been penalised in the scoring system.
Support for new renewable energy (weighting 15%)
An electricity provider’s active support for building and encouraging new renewable energy to enter the electricity grid is an important test of their climate credentials. While ultimately emissions intensity, approach towards coal closure by 2030, and engagement in fossil fuel extraction is the reflection of how green the provider is here and now (so is weighted accordingly), support for new renewable energy demonstrates a willingness to change in the future and help hasten the renewable energy transition.
Five key areas were measured to assess this criterion (each weighted 3%):
- Whether the provider supports or opposes the “CoalKeeper” subsidy for coal burning power stations: This is a subsidy proposed by the Energy Security Board and heavily promoted by the Morrison Government. It seeks to pay coal generators just to remain on stand-by, thereby providing an unnecessary subsidy allowing coal generators to remain open longer and therefore crowd out incoming renewable energy. Electricity providers that supported “CoalKeeper” through their submission to the Energy Security Board or via comments from CEOs in the media after this period were marked down for backward-looking stances.
- How actively the provider supports households adopting rooftop solar, batteries and electric vehicles: With household solar and batteries playing an increasingly dominant role in Australia’s energy system, ongoing support to householders to play their role in the renewable energy revolution is another important measure. Likewise the switch to electric vehicles helps decarbonise our transport system. Electricity providers scored well if they were able to demonstrate this support. This was assessed based on information provided in survey responses and by reviewing websites to gauge the options for household solar and battery installation, solar feed-in tariffs, “Virtual Power Plants”, and deals for electric vehicle purchasing and charging.
- Whether the provider is actively building or investing in new renewable energy generation: While this criterion favours the larger providers that have access to capital, it is nonetheless important to acknowledge the crucial role they play in bringing new renewable energy into the energy system.
- Whether the provider offers GreenPower: GreenPower is a government accredited renewable energy product offered by many electricity providers, whereby consumers can opt in to purchase a certain percentage of renewable energy. GreenPower accredits electricity providers to purchase and surrender Large-scale Generation Certificates (LGCs) when the customer purchases GreenPower. LGCs were originally created to drive new investment in renewable energy to meet the national target of 20% renewable electricity by 2020. This criterion has not been weighted heavily as standard GreenPower is common across providers and can be offered without any strong renewable energy purchasing commitments from the provider for non-GreenPower customers. The GreenPower program is under review and may in the future provide greater opportunity for providers to demonstrate they have helped new renewable generators be built, using LGCs from Power Purchasing Agreements that they recently entered into.
- Whether the provider has a credible policy for energy efficiency and demand response technologies: Energy efficiency and demand response policies and technologies help change electricity usage from times where coal and gas power generation dominates the spot market (like at night time), to either reducing electricity usage during these times or shifting to times where renewable energy generation is high (like in the middle of the sunny day). Electricity providers have been scored favourably for active approaches to this criterion.
Transparency of marketing (weighting 5%)
Although all of the criteria for the guide combined should be considered a measure of how engaged in greenwashing the provider may be, this criterion relates specifically to how transparently the electricity provider communicates to the average consumer where their electricity is coming from and if they are owned by a major fossil fuel company on their website and marketing materials. This is important because some providers market themselves heavily as progressive, renewable-energy focussed companies when in fact they are responsible for large amounts of carbon pollution, own and operate coal-burning power stations, or are owned by a major fossil fuel company. Similarly, some providers market themselves heavily as “carbon neutral” via carbon offset purchases, which is unacceptable in an industry where the technology is available now to decarbonise.
Transparency of marketing was assessed by examining the website of each company, and where possible advertisements on Facebook via their ad library. If the provider clearly represented where their electricity was sourced from, they scored well. If this was obscured, including via excessive claims of “carbon neutrality” or not clearly stated in accessible or prominent areas if they own coal and gas generators, they scored low. Similarly, if a provider is owned by a large fossil fuel company and this was not clear or obscured, they were marked down.
Pollution and environmental harm (weighting 5%)
On top of climate concerns, the localised pollution and environmental harm caused by electricity providers is another important measure of how “green” they really are.
While the impacts of climate change are global and increasingly catastrophic in scale (and therefore weighted more heavily in this guide), it is important for consumers to know if a provider is a serial environmental offender or whether they are contracting from (and therefore financially supporting) a bad environmental actor.
To this end, the Coal Impact Index is the most comprehensive assessment tool available, as it documents the formal environmental license breaches at coal burning power stations. This includes air pollution breaches and chemical spills onto nearby land and waterways. This was used to assess this criterion.
Those providers owned by multinational fossil-fuel corporations with a serious international record for environmental harm (such is the case with Shell, which owns Powershop) were also scored poorly.
Providers buying the majority of their electricity from the spot market by default are more readily propping up generators with extensive environmental license breaches such as AGL, Origin, Energy Australia, and Alinta, so were scored accordingly.
Bonus community provider score (+10%)
Australia’s electricity retail market is heavily dominated by large corporations, government-backed entities, and a range of small to midsize companies.
The large corporations in particular have made significant profits off the back of everyday Australians for many years, including unfair price gouging (eg, AGL in 2018). The massive surge in household rooftop solar, which is undercutting the business model of the large energy players, shows what happens when communities can take control of their own energy generation and use profits that would otherwise go into the pockets of big providers to build their own renewable energy generation. It shows that communities and households have the power to drive the renewable energy transition and make the big energy companies take notice and play catch up.
For this reason, Greenpeace has given particular acknowledgement to community-based electricity providers. They put the power and profit back in the hands of communities to play a significant role in the energy transition. It provides an alternative option to big companies that have often shown they are untrustworthy when it comes to putting profits ahead of customers.
There are a range of new organisations that are either not-for-profit or heavily focussed on supporting community renewable energy projects (that are owned and run by community organisations). These providers have been given a bonus score of 1, representing an additional 10%, rather than employing a criterion to measure all providers on running innovative community control initiatives. In other words, Greenpeace has not penalised providers for lack of a not-for-profit or community-based model, but have instead given extra reward for those that do.
Scoring system for 2022
The full scoring system for The Green Electricity Guide 2022 can be found in the first tab of this comprehensive data spreadsheet.
The full results can be accessed by downloading this comprehensive data spreadsheet. It includes the full rankings and scoring as well as a tab for each company with the breakdown of their scoring. A summary of the results, which can be filtered by state, is published on the Green Electricity Guide website.
Groupings of providers
When considering the national-based rankings, the results show some clear groupings of providers:
- The greenest (Enova and Diamond): These are the pure-play renewable electricity companies that either generate more renewable electricity than customers consume or contract the equivalent. They rank so highly because they are making significant strides to bring more renewable energy into Australia’s electricity system and to consumers.
- The great innovators (Energy Locals, Indigo, CoPower, Amber): These providers are employing innovative models and initiatives to empower customers and local communities to take more control over their electricity generation and usage (Indigo and CoPower are auspiced by Energy Locals but have their own organisational model and particular focus).
- The hydro electrics (Momentum, Aurora, Red, Lumo): These are the companies wholly owned by Hydro Tasmania (Momentum and Aurora) and Snowy Hydro (Red and Lumo). The energy they produce is very low emissions but they still operate gas power stations and in the case of Red and Lumo, their parent company Snowy Hydro is building a new gas power station.
- The aspirant greenest (Nectr, Mojo, Radian): These providers all have plans to match the electricity consumption of customers with 100% renewable electricity generation themselves or via contracts by the end of 2022. This is an encouraging sign and would make the 5 star rating a competitive space in the next Green Electricity Guide.
- The good with bad parents (Powershop and Tango): Powershop and Tango both have substantial renewable generation or contracts backing their businesses, but their parent companies (or parent companies to be) are heavily involved in fossil fuel mining so have been scored down accordingly. For many consumers this is an important consideration for which provider they choose and where their money ultimately ends up.
- The green up-and-comers (3.5 - 3 star companies): These are the providers that are showing signs of an increasingly green business but still have a long way to go to reach the top. Many of them heavily promote carbon offsets instead of contracting most of their electricity from renewable sources.
- The do-nothings (2.5 - 1.5 star companies): These are the providers that rely far too heavily on the spot market for wholesale electricity purchases, which is dominated by coal. They are doing very little to become clean, green companies and appear to exist purely to win over market share and make a profit.
- The big climate polluters (AGL, Origin, Energy Australia): These are Australia's big energy companies with the biggest market share. They are all in the top 10 of Australia’s biggest climate polluters because of their dirty coal-burning power stations.
How providers can score higher in the next guide
While the criteria is updated for every guide to reflect the current situation of the Australian electricity market and new data available, there are core themes that have carried across all the versions of the guide and are very likely to continue in future versions. The following are steps Greenpeace suggests providers can take to achieve a five star rating:
- Invest heavily in renewable energy generation, including firming
Providers that own and operate significant renewable energy generation and do not operate coal and gas generators are guaranteed to score well in the Green Electricity Guide. This includes investment in batteries and other energy storage or technologies that help aid significant renewable energy penetration into the grid. Substantial contracts with renewable energy generators will also score well.
- Stop or drastically minimise support for coal generators
Providers that continue to rely heavily on coal generation, particularly generators scheduled to operate beyond 2030, will continue to be penalised in the Green Electricity Guide on multiple criteria. This applies to “gentailers” operating coal power stations and the large number of providers heavily reliant on the coal-dominated spot market for the bulk of their wholesale electricity purchases.
- Stop mining fossil fuels or building new gas generation
Providers, including majority or wholly owned parent companies, will continue to be penalised for ongoing mining of fossil fuels and building new coal and gas generation. The climate science is crystal clear that we cannot afford to continue extracting and burning fossil fuels and building new coal and gas generation at a time when renewable energy should be favoured.
- Favour renewable energy generation over carbon offsets
Carbon offsets should be the confines of sectors where emissions are genuinely hard to abate or to cover non electricity-based residual emissions. The electricity sector is the most capable and able to decarbonise very fast without the need for carbon offsets - renewable energy generation (including contracting with generators where the provider is not an operator of one) should always be favoured in place of carbon offsets.
- Publicly and actively support climate and energy policies that speed up the transition to renewable energy
Providers that use their commercial and political power to strongly advocate for good climate and energy policies that hasten the closure of coal and speed up the transition to renewable energy will continue to score well in the Green Electricity Guide.
- Support customers to become agents for positive change
Providers that are heavily supporting household solar and batteries, electric vehicles, virtual power plants, shifting customer electricity use to times of high renewable energy generation and providing tools for energy efficiency will continue to receive positive scores in the Green Electricity Guide for these efforts.
- Be transparent in marketing materials
Providers that are clear about where they buy or generate their electricity from to consumers and do not attempt to over-inflate their green credentials will continue to score favourably in the Green Electricity Guide. Greenpeace suggests a clear section on each provider's website that explains the business model of the provider and where they buy their electricity from.
- Support local and community energy
Supporting local, community-based renewable energy initiatives is good for local economies and empowers communities to have more control over their energy generation. Locally-produced renewable electricity can also be more efficient and less wasteful because it does not require long transmission lines, and helps increase resilience in the face of accelerating climate change impacts. Community-focussed providers or those significantly supporting local renewable energy projects will continue to score favourably in the Green Electricity Guide.
Note: Greenpeace encourages providers to provide evidence of any changes made in response to the release of the Green Electricity Guide to allow for any updates to scoring. On the 11th of February 2022, the scoring for Energy Locals was updated to reflect immediate changes the provider made to their website to better clarify the role of carbon offsets and where they sourced their energy from. The score of CoPower was also updated to reflect new information demonstrating their efforts on energy efficiency and also clarifications on their energy sources on their website.