Everything you need to know to switch to a renewable energy plan & all the jargon explained.
Why should I switch to renewable energy?
Switching to a green energy provider will significantly reduce your carbon footprint overnight. Not only that, but you will be investing in systems that help us move to a greener future.
In Australia nearly 80% of our electricity is still generated from non-renewable sources like coal and gas. Burning these fossil fuels generates lots of carbon dioxide which we know is a major cause of climate change. Moving to a renewable energy plan is an extremely powerful and impactful thing to do as an individual. The more Australians that choose renewable energy, the less demand there is for fossil fuels!
Where does energy come from and how does it work?
Energy is extracted from a range of sources (i.e burning coal or natural gas, solar, wind, hydro), converted to an electrical current and then transmitted to businesses and homes via the electricity grid.
The 3 stages of electricity
- Energy starts out as fossil fuels or natural resources. This gets transformed into currents which are converted and fed into the grid.
- The grid
- ‘The grid’ refers to the complex transmission and distribution network that carries electricity from power stations across Australia to your home or business.
- There are over 850,000 kilometres of distribution ‘wires’ across Australia.
- Powerlines carry electricity to its final destination, such as your home or business.
- Your energy retailer measures your usage via your electricity meter and charges you for each kilowatt hour consumed
How do I know that my energy is renewable?
Unless you generate your own electricity (e.g. through solar panels), the electricity you use comes from the grid. The grid transmits electricity generated from renewable and nonrenewable sources, so it's impossible to choose renewable-only electrons for your home. However, by purchasing renewable energy, you guarantee that the volume of electricity you use has been fed into the grid from renewable sources.
In other words, when we purchase renewable energy, that money goes towards purchasing more units of power from a renewable source.
So...if every home and business in Australia purchased renewable energy, there would be no demand for fossil fuels!
The ‘green energy’ hierarchy
The term ‘green energy’ in the context of home electricity usage encompasses several options to reduce your carbon footprint. BUT they’re not all equal from the perspective of a clean energy future. One day we hope that all our electricity comes from renewable sources, but until that’s possible, we also rely on ‘offsetting’ products.
Here are the ‘green energy’ options for your home starting with the best:
- Off grid - Install solar panels and a battery so that you can meet all your electricity needs with your own generation
- Solar + grid - Install solar panels and buy green energy from your retailer when you need extra to support your electricity usage
- Switch to a ‘Green Power’ or 100% renewable energy plan (see the jargon buster below)
- Switch to a carbon offset / carbon neutral power plan
- Offset your home energy emissions with trace
Understanding the jargon
The world of 'green energy' is confusing and can be overwhelming. Let’s break down some of the common terms:
“Carbon neutral energy” or “100% carbon offset power”
This does not mean that the energy is sourced from renewables, but that the emissions from the electricity you use is offset using carbon credits.
A carbon credit funds a project that reduces or removes CO2 emissions elsewhere. For example reforestation, renewable energy, energy efficiency.
These carbon offset (or credit) projects can vary in technology, location and quality. At trace we understand the variation in quality of carbon offsets and know this can be tricky for a customer to navigate.
It’s a good idea to check how the company offsets the energy to make it carbon neutral - they may or may not disclose the credits and therefore the projects they support. Look out for externally certified or verified carbon offsets (or credits). This is a certification of the offset project itself.
You can also look out for a company certification which verifies the energy company's claims are true. It means an external body has certified that for every unit of renewable power you purchase they are offsetting that amount exactly through an externally certified offset project. An example of this is The Climate Active government programme.
“GreenPower (GP)” (note: capital “P”)
This is government certified renewable energy specifically in Australia. Paying for GreenPower means that your retailer ensures renewable energy is added to the Australian grid on your behalf. You can read more about GreenPower here.
Most retailers, even those that offer non-renewable plans, offer a GP product. The great thing about GP is that it is directly funding the energy transition for Australia.
“Green power or energy" (note: lowercase “p”)
This is often used when the power is partially or fully offset or renewable. It is not a specific term. Be careful with this one - make sure the claim is substantiated.
Providers with only carbon offset or renewable products
- Nectr - Nectr offer both 100% carbon offset power or 100% GreenPower. They offset the “100% offset power” via Climate Active certified projects locally and internationally. Nectr also owns renewable energy generation assets in Australia, showing a commitment to the transition to renewables. They currently operate across New South Wales, South East Queensland and South Australia.
- Powershop - Powershop offers 100% carbon offset power and 100% renewable power. They offset the via Australian Carbon Credits (ACCU) and Certified Emission Reduction (CER) certificates. Powershop also owns renewable energy generation assets in Australia. (Update December 2021: Powershop has recently been bought by multinational oil and gas company Shell, although the products the offer remain the same).
- OVO Energy - OVO energy offers a 10% GP and 100% carbon neutral product. This means 10% of the power is purchased through the GP scheme and 100% of it is offset with certified carbon credits internationally.
- Energy Locals - Energy Locals offer 100% carbon neutral power only. They purchase certified CER credits.
- Amber Electric - While Amber offers the same 100% carbon neutral and GreenPower plans as other electricity providers, their model goes a step further than the rest. For a monthly subscription fee ($15 as at December 2021), customers get access to the wholesale electricity price and the Amber app which enables you to shift more of your energy use to when power is both greener and cheaper!
Providers that offer a renewable energy plan alongside lots of non-renewable plans
- There are lots and lots of these so we won’t list them. These are generally the big energy companies that offer mostly non renewable plans and will all usually have a GP product.
Moving to any form of carbon neutral or renewable energy plan is a step in the right direction. If you can, switch to a renewable only provider that puts the planet-first so you know that you are funding a greener future for power in Australia.