Methodology

Overview  

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%): 

1. 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.
   
   
2. 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.
   
   
3. 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.
   
   
4. 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.
   
   
5. 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.

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