Post 14 – More on Buying Electricity Especially Renewable Electricity
It’s not an unusual conversation, two friends having a catch up chat, and the talk passing over the issue of how much each household is paying for electricity and which company you are with. Often the conversation doesn’t really result in a conclusion about any thing; it is more a sharing of snippets of information that one or the other may or may not follow-up. In my case, I had that conversation a couple of weeks ago and the friend I was sitting with told me about an electricity retailer that I had not heard of that only sold renewable electricity. That retailer sounded like the sort of retailer I needed to know about. Later that day, I received an email with cost my friend was paying and links to the relevant site. Many thanks to that friend because she provided me with the basis of this post. The retailer that I was told of is Momentum Energy and so I got onto the research trail.
Momentum Energy tell us they are owned by Hydro Tasmania which in turn, they further tell us, means they are 100% ‘Australian’. These days, I am increasingly coming to feel 100% Australian ownership is a good thing, although I can’t quite articulate why. I think this feeling has something to do with Australia being independent when it comes to major infrastructure.
I am writing this post and researching at the same time so I am just going to check that Hydro Tasmania is really 100% Australian owned; over recent times, with governments privatizing entities, we can never be quite sure but yes, having just trawled through a few sites, Hydro Tasmania does seem to be 100% Australian owned. It has a variety of joint ventures operating (of which Momentum Energy is one) that are variously 100%, 50% and 25% owned by Hydro Tasmania, sometimes with Australian partners and sometimes with international partners, but their claim that Momentum Energy is 100% Australian owned looks to be correct.
Momentum Energy is also, according to their website, 100% Australian operated (as distinct from owned) which I am going to stick my neck out and suggest is another good thing.
So, so far, two positives for Momentum Energy.
Momentum Energy sells electricity to South Australian, Victorian and News South Wales customers. It doesn’t sound as though they sell to Tasmanian customers which, given they buy electricity from a Tasmanian generator, seems weird. A short skip through some sites suggests that the way Tasmanian’s buy their electricity is the same way everyone else in Australia buys electricity that is, through a retailer from whom, in most cases, you can then specify that you want renewable or ‘green’ electricity.
Now I am going to try to understand if Momentum Energy customers can buy renewable or ‘green’ energy without paying the premium that other retailers set when you buy green energy from them.
The first thing I want to understand is the definition of green electricity, meaning green electricity with a capital G. When I refer to renewable or ‘green’ electricity, I am using the term colloquially to refer to electricity that is generated from renewable sources such as solar, wind, waste and water but, commercially, the term GreenPower, as it is used in Australia, refers to energy that is generated from renewable sources that came into operation after 1997 and are subject to annual audits. Not all renewable energy (lower case green energy) is accredited with GreenPower. I think I have purchased unaccredited green electricity from my previous retailer. I don’t doubt for a moment they are selling me green electricity but maybe not with the features of GreenPower. So why do I now think we should try to purchase accredited green energy with the GreenPower tick (logo shown).
This understanding about green electricity, which I am trying to come to, is new to me. I am putting in the effort to understand what is going on, and share that understanding with others, because I think it is a consumer issue. First, I have to acknowledge that renewable energy (gas or electricity) from whatever source is a very important, positive domestic choice to make but, having said that, the electricity sector (and probably gas as well, but I am focusing on electricity) is extremely complex and even within the renewable choices, it is nuanced.
As far as I can work out, the critical thing to understand is that GreenPower, or accredited renewable energy, is renewable energy that is not counted toward the Renewable Energy Target (RET) which is currently 33,000GWh per year down from 41,000. If we buy unaccredited renewable electricity, then this is counted towards the RET but accredited renewable energy via GreenPower isn’t counted towards the RET so the amount of renewable energy used in Australia becomes 33,000GWh plus what we purchase. This is good because otherwise we would be paying a premium to help government targets be met; I don’t think we should be subsidizing the manifestation of government policy in that way. The GreenPower site says:
‘GreenPower is fully additional to the Government’s Renewable Energy Target. So you know that when you purchase GreenPower you are helping to increase the amount of renewable energy generated in Australia. The more GreenPower that is sold, the more renewable electricity will be generated to match the demand. So using GreenPower for your events is a great way to push for increasing renewable energy supplies in Australia’.
So, back to Hydro Tasmania and its 100% owned subsidiary Momentum Energy.
Hydo Tasmania generates electricity from water and, surprisingly, wind and claims to be the biggest renewable energy generator in Australia. Having just looked at their 2014 Annual Report, I see they own 25% of a collection of three wind farm on the north-east and north-west tips of Tasmania. The other owner is a Chinese company. This image is a picture of their Musselroe wind farm. When I visit the GreenPower site, I see that Hydro Tasmania’s wind farms are accredited GreenPower generators but their hydro-electricity generation isn’t because the infrastructure was built prior to 1997 and, even if it had been built more recently, would not meet the GreenPower accreditation criteria of minimal disruption to water courses. Many will remember the awful flooding of Lake Pedder and the protests that accompanied it . All that not withstanding, Hydro Tasmania does generate renewable energy but it is not accredited and so it contributes to the RET.
So, if you want to buy renewable electricity and want a relatively cheap option that is straightforward to purchase, then it looks like Momentum Energy is a good choice. If you want to buy GreenPower from Momentum, then it is an additional $0.058/kWh to do so (at least for businesses; it’s not clear what the cost is for residential customers). GreenPower themselves acknowledge the additional cost in saying:
‘The price of purchasing the equivalent amount of your home’s annual electricity usage from GreenPower accredited renewable energy sources is less than the price of three cups of coffee a week. GreenPower costs between 5.5 and 8 cents per kWh.
…. As well as reducing your impact on the environment, by becoming part of the GreenPower community, customers are helping to support Australia’s renewable energy sector. That’s because the bulk of the premiums you pay for GreenPower go directly back to the GreenPower certified electricity generators. Since 2009, GreenPower customers have been responsible for investing more than $500 million back into Australia’s renewable energy industry. That’s no small sum! What’s more, by supporting these generators customers are helping to create jobs for their fellow Australians and are helping to support the businesses that supply services to these generators.’
I have also looked at the actual prices of electricity from this retailer and they seem comparable with most other providers. In my last post I talked about our recent change to Powershop for the purchase of our electricity. A week later, I am still not sure they are the retailer that is best for us, but as I said, I am going to wait for the end of the first billing cycle and see what I learn from that. Given there are no contracts with PowerShop, I may thing about swapping to Momentum. They are certainly a consideration. Bye for now, Jane