GREEN ELECTRICITY WATCH 2007 BUSINESS PRODUCTS

Transcription

1 GREEN ELECTRICITY WATCH 2007 BUSINESS PRODUCTS Jay Rutovitz Sustainable Energy Consultant 39 St Thomas Street Bronte, NSW Phone: (02) Fax: (02)

2 CONTENTS EXECUTIVE SUMMARY...3 INTRODUCTION...6 Climate change, electricity and renewable energy...6 GreenPower and other green electricity products...6 Why Green Electricity Watch?...7 Renewable but not accredited portions of GreenPower products...7 Gold Standard renewable energy...8 Green Electricity Watch, carbon offsets, and carbon neutrality...8 GreenPower products for Business...8 Improvements recommended to the GreenPower scheme...9 THIS SURVEY...10 Methodology...10 Overview...10 Questions...10 Scoring...11 Penalties Questions 7, 8, 15, Driving the development of renewable energy projects...13 Maximising the uptake of GreenPower...14 Clarity of advertising and promotion...15 RESULTS...16 Participation...16 Percentage of GreenPower...16 Confidentiality...16 Costs...16 Offset products...17 Analysis...17 Table 1: Green Electricity Watch - survey questions...12 Table 2: Questions for rating for promotional materials...15 Table 3: GreenPower products for small to medium businesses (all percentages)...19 Table 4: 100% GreenPower products for small to medium businesses...20 Table 5: 100% GreenPower products for large businesses...20 Table 6: GreenPower products for large businesses (all percentages)...21 Green Electricity Watch was established in 2002, and is a coalition of three leading Australian environment organisations: the Australian Conservation Foundation, Total Environment Centre, and WWF-Australia. Green Electricity Watch commissions an independent consultant to conduct the survey and carry out the ranking. The environment groups in Green Electricity Watch have some joint projects and may receive funding from energy companies, and these links are detailed at Every effort has been made to represent products correctly with the information supplied. However, no liability is accepted for misrepresentation or changes since the time of survey. 30 August

3 EXECUTIVE SUMMARY Which GreenPower products make the most difference? Green Electricity Watch provides a ranking of GreenPower electricity products. Green Electricity Watch is a coalition of three leading Australian environment organisations: the Australian Conservation Foundation, Total Environment Centre, and WWF-Australia. The importance of new, renewable energy to help reduce climate change Australians are amongst the worst greenhouse polluters per person in the industrialised world. This is largely due to our electricity consumption, which makes up 35% of Australian greenhouse emissions. Our electricity doesn t have to be like this: Australia is rich in clean renewable energy sources which could supply our power. Instead we get only 8% from renewable sources, and 92% per cent from polluting fossil fuels such as coal. The Federal, NSW, and Victorian Governments have all introduced laws to increase the amount of electricity from renewable energy, but the targets are very low. We need to at least double the electricity from renewable energy by 2020 to help avoid dangerous climate change. Your choice to buy accredited GreenPower will help. What is GreenPower? GreenPower is government-accredited renewable energy sourced from wind, water, waste and the sun. By choosing accredited GreenPower you are driving the creation of new renewable energy, over and above our generally small mandatory renewable energy targets and helping to reduce Australia s greenhouse emissions. There are a lot of GreenPower products on offer. It is important that businesses can have confidence in their choice of GreenPower product, so that their customers can have confidence too. We have carried out an independent survey to help. Only the accredited portion of GreenPower products make a difference Many GreenPower products include only a small percentage of accredited Green Power. Some of these are sold as 100% renewable, but it is only the accredited portion that makes a difference. Even if the remainder comes from renewable sources, it will be in the electricity system whether you buy it as part of a GreenPower product or not, and it may already be counted towards existing legislated targets. Your purchase of the non-accredited portion does not contribute to the growth of new, renewable energy or assist in reducing our current greenhouse emissions. Offsets Several retailers offer offset products to business customers and promote these as reducing electricity emissions to zero. These reduce emissions in another sector to compensate for electricity emissions. Using these products may raise questions about the validity of your company s claim to have neutralised carbon emissions. We recommend that offsets never be used for electricity, because you can buy emission free electricity in the form of accredited GreenPower. How accredited GreenPower products have been scored This survey ranks GreenPower products. These have been scored on their ability to reduce greenhouse emissions and support the growth in new renewable energy in Australia. Criteria also include the clarity and accuracy of information about GreenPower that the retailer provides. Penalties are given for misleading practices. This means the number of stars does not simply correspond to the percentage of GreenPower. GreenPower products have received a bonus if retailers set a minimum percentage, which increases as the products go towards 100% of electricity. 30 August

4 GreenPower products for small to medium businesses how they score Very good good fair Products for businesses using less than 160 MWh Company per year Ranking poor ½ very poor Minimum % of GreenPower you can buy 1 States available Extra charge per unit of GreenPower 2 *Greenchoice 200% ActewAGL 200% ACT, NSW 5.5 cents Greenchoice 100% WIND ActewAGL 100% ACT, NSW 5.5 cents PureEnergy Premium Energy Australia 100% ACT, NSW 5.4 cents Greenchoice 50% ActewAGL 50% ACT, NSW 5.5 cents INgreen Business 100% Integral 100% NSW, QLD 5.5 cents TRUenergy Wind Power TRUenergy 100% ACT, NSW, SA, Vic 5.8 cents Premium Green South Australia Electricity 100% SA 4.4 cents Premium Green Victoria Electricity 100% Vic 4.4 cents Greenchoice 25% ActewAGL 25% ACT, NSW 5.5 cents INgreen Business 75% Integral 75% NSW, QLD 4.4 cents Greenchoice 10% ActewAGL 10% ACT, NSW 5.5 cents Ark Climate Business Ark Climate 3 75% Nationwide n/a Greenchoice 60 ActewAGL 14% Nationwide 5.5 cents Greenchoice 30 ActewAGL 7% Nationwide 5.5 cents countrygreen energy 100% Country Energy 100% ACT, NSW, QLD, SA, Vic n/a Greenchoice 10 ActewAGL 2% Nationwide 5.5 cents NaturalPower 100% Synergy 100% WA 4.4 cents GreenEarth Business Origin 20% QLD, SA, Vic no charge PureEnergy 10 Energy Australia 10% ACT, NSW 6.6 cents NaturalPower 75% Synergy 75% WA 4.4 cents GreenEarth Wind offset Origin 20% Nationwide 5.5 cents PureEnergy 100 Energy Australia 1% ACT, NSW, QLD 5.4 cents AGL Green Energy AGL Energy Ltd no minimum NSW, QLD, SA, Vic 6.1 cents Climate Neutral Emerald Climate Friendly 3 No minimum Nationwide 4 cents Climate Neutral Green Climate Friendly 3 No minimum Nationwide 4 cents Climate Neutral Economy Climate Friendly 3 No minimum Nationwide 4 cents INgreen Business 10% Integral 10% NSW, QLD 11 cents COzero Business COzero 3 No minimum Nationwide 4.8 cents INgreen Business 2.5% Integral 2.5% NSW, QLD 22 cents TRUenergy Eco-Friendly TRUenergy 2.5% ACT, NSW, SA, Vic 5.8 cents NaturalPower 50% Synergy 50% WA 4.4 cents Greenswitch Green Switch 3 no minimum Nationwide 4.1 cents NaturalPower 25% Synergy 25% WA 4.4 cents EcoGreen South Australia Electricity 10% SA 4.4 cents EcoGreen Victoria Electricity 10% Vic 4.4 cents NaturalPower 10% Synergy 10% WA 4.4 cents Clean Energy Ergon 1% QLD 6 cents 0.5 countrygreen energy - business Country Energy 10% ACT, NSW, QLD, SA, Vic 1.1 cents 1) The GreenPower rules do not specify a minimum percentage a business may purchase, but some products or companies do. 2) This lets you compare value for money for each product. It is the extra charge for each unit of green electricity. For a 100% GreenPower product you pay this extra charge for each unit that you use, for a 10% product you only pay it on the 10% which is green. This charge is inclusive of GST; n/a means additional charge is not available. 3) These companies only sell GreenPower and do not supply electricity to your business. *This product is GreenPower equal to double the electricity you use. The product scores the same as if it was 100%, although it has double the environmental benefit. This is because a 100% product gets the maximum score available for that survey question. 30 August

5 GreenPower products for large businesses how they score Very good good fair poor Products for businesses using Ranking Company more than 160 MWh per year Minimum % GreenPower you can buy 1 States available *Greenchoice 200% ActewAGL 200% ACT, NSW Greenchoice 100% WIND ActewAGL 100% ACT, NSW Greenchoice 50% ActewAGL 50% ACT, NSW TRUenergy Wind Power TRUenergy 100% ACT, NSW, SA, Vic Premium Green South Australia Electricity 100% SA Premium Green Victoria Electricity 100% Vic Greenchoice 25% ActewAGL 25% ACT, NSW Greenchoice 10% ActewAGL 10% ACT, NSW NaturalPower 100% Synergy 100% WA Greenchoice 10 ActewAGL 0% Nationwide NaturalPower 75% Synergy 75% WA PureEnergy 100 Energy Australia no minimum ACT, NSW, QLD Climate Neutral Emerald Climate Friendly 2 no minimum Nationwide Climate Neutral Green Climate Friendly 2 no minimum Nationwide Climate Neutral Economy Climate Friendly 2 no minimum Nationwide TRUenergy Eco-Friendly TRUenergy 3% ACT, NSW, SA, Vic Pacific Hydro 100% Pacific Hydro 5% Nationwide NaturalPower 50% Synergy 50% WA Ark Climate Business Ark Climate 3% Nationwide Business Green Integral no minimum ACT, NSW, QLD Tas, Vic Greenswitch Green Switch 2 no minimum Nationwide NaturalPower 25% Synergy 25% WA EcoGreen South Australia Electricity 10% SA EcoGreen Victoria Electricity 10% Vic AGL Green Energy AGL Energy Ltd no minimum NSW, QLD, SA, Vic Origin Green Power Business Origin no minimum ACT, NSW, QLD, SA, Tas, Vic AuroraGreen Aurora Energy no minimum ACT, NSW, QLD, SA, Tas, Vic NaturalPower 10% Synergy 10% WA GreenEarth Wind offset Origin no minimum Nationwide countrygreen Country Energy 3% ACT, NSW, QLD, SA, Vic Clean Energy Ergon 1% QLD 1) The GreenPower rules do not specify a minimum percentage a business may purchase, but some products or companies do. 2) These companies only sell GreenPower and do not supply electricity to your business. *This product is GreenPower equal to double the electricity you use. The product scores the same as if it was 100%, although it has double the environmental benefit. This is because a 100% product gets the maximum score available for that survey question. Green Electricity Watch commissions an independent consultant to survey GreenPower products. For information on relationships between energy businesses and the environment groups visit For information on the Government s GreenPower scheme call or visit For a guide to the full results of the survey visit FOR THE FULL RESULTS OF THE SURVEY VISIT 30 August

6 INTRODUCTION Green Electricity Watch commissioned this survey to compare and rate green electricity products that are accredited by an independent government panel as GreenPower. Green Electricity Watch was established in 2002 by Australian environment groups to help consumers choose products that made the most difference to Australia's and their own greenhouse gas emissions. Climate change, electricity and renewable energy Greenhouse gas emissions are changing the global climate and putting our world at risk. Electricity accounts for 35 per cent of Australian greenhouse emissions, up 3 per cent from 2004, and up 66% since Australia has the most greenhouse intensive electricity, and the highest per person emissions in the developed world. 2 We urgently need to change our generating mix and use energy much more wisely. Positive action is required from all sectors of Australian society. Electricity consumers, business, electricity retailers, generating companies and governments all have a responsibility to act. There is a growing awareness among business of the risks associated with climate change. Businesses are increasingly looking to reduce their carbon footprints, to manage these risks and to be seen as responsible corporate citizens.. Customers and shareholders want to know what action is being taken. More and more companies are buying GreenPower as an important means to reduce their emissions. GreenPower and other green electricity products The GreenPower program started in NSW in 1997 and became a national program in The program aims to give consumers confidence that their choice to reduce Australia s greenhouse emissions is driving the demand for electricity from renewable sources over and above legislated requirements. Businesses wishing to reduce their carbon footprints need certainty that their actions are not only effective but demonstrably so, in order to be able to report their actions to stakeholders. GreenPower is a national accreditation program to make sure that products which are accredited really do deliver what they say. Stringent environmental and reporting standards must be met before renewable energy products offered by electricity suppliers will be accredited as GreenPower by Green Electricity Watch. Only electricity that has been generated in compliance with these standards can be sold as GreenPower. During 2006 GreenPower sales amounted to 859,746 MWh. 3 For comparison the national mandatory target for 2005 was 3,400,000 MWh. Any electricity purchased through GreenPower is additional to electricity generated under the mandatory program, so GreenPower sales increased the amount of new renewable energy generated and sold by 19% in that year. At the end of 2003, there were fourteen accredited GreenPower products. By the end of 2006 the number of GreenPower products on offer had increased to 27, from 15 different providers, and more are entering the market almost weekly. There are four GreenPower providers that sell consumers GeenPower in a separate transaction to electricity purchase. In this case the consumer buys electricity as normal, and purchases 1 AGO 2006 National Greenhouse Gas Inventory Commonwealth of Australia. 2 World Resources Institute climate Analysis Indicators Tool. 3 Obtained from quarterly reports 30 August

7 GreenPower equal to whatever percentage of electricity they wish to buy from renewable sources. Some electricity retailers also offer this option, so they can offer GreenPower to customers nationally even if they do not sell electricity in all states. Why Green Electricity Watch? Since the deregulation of the electricity retail sector, there has been considerable confusion about the range of environmental claims around green electricity. Confusion can arise from: Non-accredited green or renewable products which appear to deliver the same benefits as accredited GreenPower; The description of the un-accredited portion of a GreenPower product as renewable ; The promotion of offset products as a means of reducing greenhouse emissions from electricity; and The growing range of companies and GreenPower products and the accompanying range of claims, marketing strategies and products. When a business chooses a GreenPower product, it does so to reduce its carbon footprint. Businesses need to have confidence that they are actually reducing their carbon footprint by purchasing a particular product, so they can be confident in advertising the fact to their customers. Green Electricity Watch wants to help businesses make an informed choice and ensure that the green electricity products they purchase really do make a difference. This will help businesses avoid claims that they are simply trying to create a pro-environmental image, to greenwash their reputations. The key question for Green Electricity Watch is: to what extent does this product result in increased renewable energy generation in Australia that is clearly additional to mandatory targets? This survey only undertakes a detailed examination of accredited products as the best way to help customers make informed choices. Non-accredited products, or the non-accredited portion of GreenPower products, are considered to offer no reduction in greenhouse emissions and no increase in the supply of renewable energy. Green Electricity Watch surveys were carried out in 2002, 2003, and However, this is the first survey which has evaluated business products. Renewable but not accredited portions of GreenPower products Some GreenPower products include only a portion of accredited GreenPower. The nonaccredited portion is often described as 100% renewable electricity. Businesses buying these products and claiming credit for them are making themselves vulnerable to accusations of misleading their stakeholders. Currently, anything sold as renewable which is not GreenPower accredited is likely to have been part of Australia s generating mix for a very long time, or likely to be contributing towards Australia s mandatory targets. Renewable electricity for mandatory targets will happen whether we buy it as part of GreenPower products or not. Renewable energy that has been in place for tens of years, like older hydro schemes, supply a great service and will continue to do so but it is not new generation and will therefore not reduce Australia s greenhouse emissions. It will be there whether we buy the output as part of GreenPower products or not. 30 August

8 Green Electricity Watch believes these practices are seriously misleading consumers. They are lobbying the GreenPower steering group to prohibit retailers from describing the non-accredited portion as renewable energy, so that consumers are clear what they are purchasing. In the interim business customers are advised to avoid products which include non-accredited renewable energy (unless it is Gold Standard renewable energy). Gold Standard renewable energy Gold Standard is an international accreditation body for greenhouse offsets which ensures offset products contribute carbon offsets additional to mandatory requirements for renewable energy or efficiency. Some of the Gold Standard accredited projects utilise renewable energy while others utilise emissions reductions in other (non-electricity) sectors. If a retailer offers a GreenPower accredited product which is less than 100% of a customer s electricity, and purchases Gold Standard accredited renewable energy to compensate for the remainder, they are legitimately selling 100% renewable energy which is additional to mandatory requirements. However, some of this renewable energy may not be in Australia, as that is not a requirement o the Gold Standard rules. GreenPower does have to be generated in Australia. In this survey, Gold Standard renewable energy has been awarded a score, although not as high as the score awarded for selling 100% accredited GreenPower. This is because Green Electricity Watch consider increasing renewable energy generation in Australia is it to be a primary goal. Green Electricity Watch, carbon offsets, and carbon neutrality There has been considerable growth in the carbon offset market, where providers offer to neutralise individual or company carbon emissions by reducing emissions elsewhere. While this survey does not assess carbon offset products, it strongly takes the view that it is preferable to reduce emissions by employing energy efficient practices and switching to 100% GreenPower. This will help transform our energy infrastructure, the major source of Australia s emissions, instead of avoiding the problem. Businesses wishing to reduce their carbon footprint should first reduce energy use, then buy GreenPower for the electricity they can t reduce, and only consider offsets for emissions that they cannot eliminate. A number of retailers offer offset products to businesses for their electricity. The worrying possibility is that businesses purchasing these offsets rather than accredited GreenPower may lose credibility if they claim to be reducing their own emissions. Since Green Electricity Watch commenced, the market for GreenPower, green electricity, offsets and carbon neutrality products has increased exponentially. Initially, the amount of non-electricity companies offering these products was small. As the market grows there is a need to conduct a separate survey of offset products and rank them separately to GreenPower products. GreenPower products for Business GreenPower for business customers differs from GreenPower for residential customers in a number of key areas: GreenPower products for residential customers must contain a minimum of 10% GreenPower. There is businesses purchasing GreenPower must buy a minimum percentage; Business customers wishing to use the GreenPower logo must buy a minimum percentage of GreenPower, however, these minimum percentages are very low (as low as 2.5% in the case of very large users); Customers who meet the requirements for logo use may state powered by GreenPower, with no indication of how much GreenPower they purchase. 30 August

9 Costs are generally negotiated on a case by case basis for customers who use more than 160 MWh per year. This means that the market for GreenPower for business is far less transparent than the market for residential customers, and making comparisons between products is much more difficult. Green Electricity Watch is lobbying for these rules to be changed (see below). However, in the interim, business GreenPower products which do set a minimum percentage of GreenPower are awarded a score in this survey (the higher the percentage of GreenPower, the better the score). Improvements recommended to the GreenPower scheme GreenPower products are independently regulated by the Government GreenPower team. There have been significant improvements to the rules for residential products since the last survey in Green Electricity Watch has suggested further rule changes, specifically for businesses in order to enhance transparency for consumers. These are summarised below. 1. Describing the backfill as renewable (note this applies to business and residential products) There is a widespread practice of describing the non-accredited portion of a GreenPower product (the backfill ) as renewable energy. For example, an accredited product which contains GreenPower equal to 10% of a customer s electricity means 90% of their electricity is non-accredited backfill. Sometimes this is not described at all, but in some cases the product is described as 100% renewable. Renewable backfill may add a feel-good factor but, as noted above, it does not reduce greenhouse emissions or increase the amount of renewable energy The description of the backfill as renewable energy is considered a misleading practice. This is especially the case for business products. Businesses are offered whatever percentage they choose in most cases, and the idea that the percentage they purchase would itself only contain a percentage of GreenPower seems absurd. The one acceptable exception to a claim that a product containing less than 100% GreenPower is 100% renewable is if the backfill is itself reliably accredited renewable energy, even if not accredited GreenPower (see Gold Standard renewable energy, page 8). In this case it will be driving the development of renewable energy, although perhaps not in Australia. Only one product currently includes Gold Standard accredited backfill. 2. Changing the minimum percentage of GreenPower which businesses may purchase to 10% (there is currently no minimum percentage) While the absolute amount may be very significant for large electricity users, the proportionate change in their electricity bills is the same as for any other customer. 3. Requiring businesses to display the percentage purchased in any use of the GreenPower logo At present businesses may use the GreenPower logo to advertise that their operations are powered by GreenPower even if purchasing GreenPower for only 2.5 % of their electricity consumption. This removes a significant incentive to increase the amount of GreenPower purchased. The logo should include the percentage, comparable to the rules for residential product logos. 30 August

10 THIS SURVEY Business products are included in the 2007 Green Electricity Watch survey for the first time. The 2002 and 2003 surveys ranked retailers according to a range of corporate policies and activities, the 2006 survey only ranked domestic products. 4 This survey represents a snapshot in time. There are new participants coming to market and existing participants are continuing to refine their products and offer new products. Consumers wishing to make the best possible choice for the environment should use this report as a guide only. Methodology Overview The areas of interest, and scores in each area were as follows: A) How much does the product drive the development of renewable energy projects? 29% of potential score B) How much does the product increase the uptake of GreenPower? 49% of potential score C) How clear is the advertising and promotion of the product? 22% of potential score, and potential penalty of up to 20% There are also penalties given for practices that are considered misleading, or that may divert consumers from buying GreenPower for their electricity. These are: D) Offering non-accredited products Penalty of -10 to -15 E) Offering offset products for electricity use Penalty of -10 F) Describing the non-accredited portion of GreenPower products as renewable (or similar) Penalty of -10 to -15 Area A tries to identify best practice in GreenPower products by asking about risk sharing between GreenPower retailers and renewable energy developers, and whether each unit of GreenPower sold results in a corresponding increase in renewable energy. Area B relates to increasing the amount of GreenPower, as the more GreenPower there is, the more renewable energy. There is overlap, particularly between Areas A) and B Questions The questions included in the survey are shown in Table 1. The questions for rating promotional materials are shown in Table 2. The rest of this section groups the questions under the main 4 A summary of methodology and results of the 2002, and 2003 surveys may be found in the 2006 Green Electricity Watch survey, and full reports may be downloaded from 30 August

11 areas of interest, explains why particular questions have been included and gives an indication of the weighting given to different areas. Retailer guidelines were produced in April 2007, to inform retailers about how their products would be scored. These are available from and give a detailed description of the methodology. Scoring Most questions have a maximum score. Scores up to that value are gained proportionately. For example, if a maximum score of 20% is obtained for a surrendering a Renewable Energy Certificate for every unit of GreenPower sold, a retailer would score 10% for surrendering certificates against half of their sales. There are also penalty scores in a number of cases. Penalties which are included in the common questions are particularly significant, as they apply to all products. For example, describing the backfill as renewable energy or offering non-accredited products results in all products being penalised, even a 100% GreenPower product. This is because Green Electricity Watch considers this practice to be confusing, potentially misleading and likely to divert customers away from the higher percentage products. Questions common to all of a retailers products attract more than 60% of the score. There are penalties of up to 20% that may be applied for responses to common questions. Common question scores are applied to all of a retailer s products. The most difficult area to assess is Question 18, What percentage of your electricity is GreenPower if you buy this product? Many retailers offer only one business GreenPower product which may be purchased to supply anything from 1% to 100% of customer electricity. The product at 100% would have quite a different environmental effect, and rank quite differently, from the same product at 1%. As noted above, Green Electricity Watch is recommending a rule change to address this issue, so that a minimum level of 10% GreenPower is required. As an interim measure, 22% of the final score is awarded according to the minimum percentage of GreenPower which must be purchased. Where products have no minimum percentage, they are given zero points for this question. As an indicator, if a business chooses to purchase this product at 100%, it would be the same as adding 20% to the product score. 30 August

12 Table 1: Green Electricity Watch - survey questions COMMON QUESTIONS THE SCORES FOR THESE QUESTIONS APPLY TO ALL PRODUCTS 1. What were your total electricity sales for 2006 (calendar year)? 2. What were your accredited Green Power sales for 2006 (calendar year)? 3. How many REC s did you surrender against Green Power sales in 2006? 4. Do you use concessioned RECs? a. Please give details of schemes and numbers of concession RECs: b. Will concessions continue in 2007? 5. Do you have PPAs with accredited Green Power generators? (if more than one PPA, please give details of each) a. What is the volume of the PPA(s) (MWh)? b. How many years was the PPA for in total? c. Do the PPA(s) with accredited Green Power generators include RECs? d. Do the PPA(s) with accredited Green Power generators include GPRs? e. Do the PPA(s) with accredited Green Power generators include electricity? f. If not via PPAs, how do you obtain RECs? 6. What accredited GreenPower products do you offer? Do you offer non-accredited green electricity products to business customers? 14. Do you offer any offset products to business customers? If yes, please give details (note this includes offering offset products via a greenhouse calculator)? If yes, please give details. a. Are offset products offered only for non electricity emissions, for example, gas use or travel? b. If offset products are offered via a greenhouse calculator, are customers given the option of offsetting electricity? c. Are any offset products accredited? 15. Do you describe the backfill of any of your accredited GreenPower business products? (for example, as 100% renewable, as hydro, or as producing zero greenhouse gases) If yes, please give details. a. If yes, is it Gold Standard accredited renewable energy? b. If yes, is it an accredited offset product? 16. Are new business customers given an accredited GreenPower product as the first offer? (if yes please give details, including the % offered) 17. If business customers sign up to an accredited Green Power product, do they remain so unless they actively opt out? PRODUCT QUESTIONS 18. What is the lowest percentage of customers electricity that is accredited GreenPower if they buy this product? (please differentiate by size category >40 GWh, >20 GWh, >4 GWh, >750 MWh, >160 MWh, <160 MWh) 20. How much additional does your GreenPower product cost relative to your standard product per kwh of accredited GreenPower (please exclude any backfill)? a. What is the basis of the cost (eg per week/ per block)? 21. Do you describe the non-accredited part of the product (the backfill) as renewable energy? a. If yes, is it Gold Standard accredited renewable energy? b. If yes, is it an accredited offset product? 22. Is it a proportion of use or a block product 24. In what states are the products currently available? Please answer for all states and territories. Note: numbers are not in sequence because questions relating to residential products have been left out. 5 Question numbers 7 12 relate to residential products only 30 August

13 Penalties Questions 7, 8, 15, 21 A number of penalty scores are applied in the common questions. These apply to ALL products offered and thus have a big effect on product scores. Non accredited products Q7 and Q13 Green Electricity Watch considers non-accredited renewable electricity will not make any difference to Australia s greenhouse emissions or increase the amount of renewable electricity available. Non-accredited renewable electricity generally comes from older schemes that have been part of Australia s generating mix for the past 20 years or more and will continue to generate pollution free electricity whether or not it is sold green electricity. These products are generally cheaper than products that source renewable electricity from new projects. This is because the older schemes are already competitive with fossil fuelled electricity and do not require additional support. The availability of green electricity from old schemes has created an enormous amount of consumer confusion and has arguably diverted customers from products that will make a difference to Australia s greenhouse emissions. For this reason a penalty of -10% is applied to ALL products if a non-accredited product is offered. Driving the development of renewable energy projects 30% of potential score; question 3 and question 5 in Table 1. There are two parts to this area: the percentage of renewable energy certificates surrendered compared to actual GreenPower sales, the extent to which retailers enter into Power Purchase Agreements with GreenPower generators; REC surrender question 3 This question rewards surrender of Renewable Energy Certificates (RECs) against GreenPower sales. Under the national Mandatory Renewable Energy Target, RECs are created from new renewable generation, and must be surrendered by all electricity retailers against a percentage of their electricity sales to comply legal requirements. REC creation is strictly controlled by the Office of the Renewable Energy Regulator. Surrendering RECs against GreenPower sales effectively increases the total electricity from renewable sources above the mandatory target by an amount equivalent to the number of RECs surrendered. It is the most transparent way consumers can know that their purchase is additional to mandatory requirements. A maximum score is obtained by surrendering 1 REC for each MWh of GreenPower sold. In future years certificates from the state mandatory schemes, the Victorian Renewable Energy Target (VRET) and the NSW Renewable Energy Target (NRET). The old 80% rule, whereby GreenPower was only required to contain 80% of new renewable energy and the use of concessioned RECs meant that in 2005 only 50% of GreenPower sales resulted in REC surrender. The 80% rule ended for new customers from 1 July 2006, although existing customers may remain on products using this rule until the end of Question 3 is designed to reward retailers that demonstrate best practice by selling GreenPower that contains only new renewable energy and have not made use of concessions. 30 August

14 The score attained is: Score = S x RECs surrendered against GreenPower sales total GreenPower sales Where S is the maximum score for this question. Concessioned RECs question 4 The GreenPower rules have been modified so details of all concessions granted for 2006 will be published. The large concessions granted for 2006 are all considered additional by Green Electricity Watch. These attract 90% of the credit for REC surrender. The following formula applies for question 3: Score = S x RECs surrendered + (conc. RECs) x 0.9 total GreenPower sales Power Purchase Agreements question 5 Forward power purchase agreements (PPAs) are generally necessary for the development of renewable energy generation projects and were considered by renewable developers (with the exception of solar photo voltaics) to be the single most important aspect of GreenPower after REC surrender. They offer a means by which retailers can share risk with renewable energy generators. Maximum score is obtained if the total volume of Power Purchase Agreements (PPA) is more than double the mandatory requirement to surrender RECs under MRET, VRET, and NRET, the PPA is for 12 or more years and includes electricity, RECs, and Green Power Rights. The calculation is shown below: Score = S x PPAs x L x REC + elec + GPR 2 x M 12 5 If: S = potential score for this question M = mandatory requirement to surrender under MRET, VRET, and NRET PPA = total volume of PPAs with GreenPower generators that include RECs L = weighted average length of PPAs Weighted averages are used to calculate a single figure for the length of time and the inclusions of the various PPAs held by retailers. Maximising the uptake of GreenPower 60% of potential score. Questions 1, 2, 16,17, and 18 from Table 1, and s, t and u from Table 2. Market share question 1 and question 2 Questions 1 and 2 reward increasing the market share for GreenPower. Maximum score goes to retailers for which accredited GreenPower sales are 10% or more of total electricity sales. The score attained is: Score = S x RECs 6 surrendered 0.1 x total sales Where S is the maximum score for this question. 6 For simplicity REC is used throughout this report, but may be taken to include RECs, VRETs or NRETs 30 August

15 GreenPower providers who do not sell electricity cannot score in this question, and have been given the average score received by the electricity retailers. Is GreenPower an opt out, rather than an opt in? Once signed on, do customers stay signed up unless they actively opt out? Questions 16 and 17 Both of these questions reward practices likely to increase the uptake of GreenPower. Is it a proportion of use or a block product? Question 22 Proportion of use products are considered preferable because they make the link with electricity consumption. Clarity of advertising and promotion 18% of potential score The web pages are rated on a scale from 1-5 using the questions set out in Table 2. More detail on the criteria used can be found in the Retailer Guidelines to Green Electricity Watch 2007, available from There are a number of questions which do not apply to companies which do not retail electricity (questions s, t and u). These companies have been given a neutral score in this question, so that they are not penalised. Table 2: Questions for rating for promotional materials WEB SITE j) How easy is it to find the GreenPower business products from the home page (and other entry points) k) Are you likely to be steered towards non-accredited products, or offset products? (including via greenhouse calculators) l) Are you likely to be steered towards purchasing lower percentages? m) Is the significance of accredited GreenPower clear (ie contributing to new renewable energy, reducing Au greenhouse emissions) n) Does website also suggest energy audits and offer that service EXISTING CUSTOMERS s) Does any regular newsletter or similar to all business customers, including standard electricity customers, highlight renewable energy and climate change and encourage customers to switch to GreenPower? t) Is GreenPower promoted actively and prominently on bills to non GreenPower customers? u) Are greenhouse impacts of electricity use given prominently on electricity bills to non GreenPower customers? 30 August

16 RESULTS Participation All providers offering accredited GreenPower products to business customers took part in the survey. This included twelve electricity retailers, and four companies that do not sell electricity, but sell products to enable businesses and individuals to offset their greenhouse emissions. Since the survey was completed in July 2007 several more providers offer GreenPower products to businesses. These products will be reviewed for the next Green Electricity Watch survey. Climate Friendly, Greenswitch, CO2 Zero, and Ark Climate sell GreenPower separately from electricity, so that individuals and customers may offset their emissions. They are not electricity retailers so some questions do not apply. For example, the question about increasing market share asks the proportion of electricity sales made up by GreenPower does. These companies have been awarded the average of the electricity retailer scores for this question. Five companies are new entrants to the GreenPower field, and were not selling GreenPower during They have been given full score for question 3, as they have undertaken to surrender RECs against 100% of GreenPower sales during Percentage of GreenPower Many retailers offer only one business GreenPower product which may be purchased for anything from 1% to 100% of customer electricity. The product at 100% would have quite a different environmental effect, and rank quite differently, from the same product at 1%. 22% of the score is awarded according to the minimum percentage which must be purchased. Where products contain no minimum percentage of GreenPower, they are given zero points for this question. If the same product was sold only as 100% GreenPower, it would add 20% to the product score. To assist businesses, Tables 3 and 4 rank products exactly as they are offered, so that products which set no minimum percentage score 22% lower than products which are 100% of the customer s electricity. Tables 5 and 6 rank products assuming 100% of electricity is purchased as GreenPower. Only one product from each retailer has been scored in the 100% table. Confidentiality In order to properly assess the extent to which retailers are driving the development of renewable energy the survey requires responses that may contain information commercially sensitive or confidential to the respondents, in particular, information concerning Power Purchase Agreements. To preserve confidentiality, only overall scores are available, and these are not broken down by area. The overall scores for each product are given in Tables 3 and 6. Costs Information on cost of GreenPower was collected for the first time in This is for information only, and does not affect scores. Cost is presented as the extra cost per unit of GreenPower. This is a means of comparing value for money, as it is only the GreenPower which has an associated extra cost. Costs are often presented on retailer web sites averaged over the total electricity purchased. In this case cost per unit means the cost per unit of electricity that you use, rather than per unit of GreenPower. Only the GreenPower portion has any additional cost, and spreading the cost of this 30 August

17 over all the electricity purchased can make products with smaller amounts of GreenPower can appear cheaper, as shown in the example below. Worked examples are given below for 10%, 50%, and 100% GreenPower purchase, with the extra cost for each unit of GreenPower 10 cents in the 10% case, and 5 cents per kwh in the 50% and 100% purchase. For the purposes of the example it is assumed the business uses 100 MWh per year of electricity in total. Buying GreenPower for 10% of electricity Additional cost of GreenPower per unit 10 cents per kwh Total electricity used 100 MWh (=100,000 kwh) GreenPower purchased = 100,000 kwh x 0.1 = 10,000 kwh Extra cost of GreenPower per year = 10,000 x 10 cents = $1000 Extra cost per unit of electricity used = $1000 / 100,000 = 1 cents Buying GreenPower for 50% of electricity Additional cost of GreenPower per unit 5 cents per kwh Total electricity used 100 MWh (=100,000 kwh) GreenPower purchased = 100,000 kwh x 0.5 = 50,000 kwh Extra cost of GreenPower per year = 50,000 x 5 cents = $2500 Extra cost per unit of electricity used = $2500 / 100,000 = 2.5 cents Buying GreenPower for 100% of electricity Additional cost of GreenPower per unit 5 cents per kwh Total electricity used 100 MWh (=100,000 kwh) GreenPower purchased = 100,000 kwh Extra cost of GreenPower per year = 100,000 x 5 cents = $5000 Extra cost per unit of electricity used = $5000 / 100,000 = 5 cents In this example the business is paying twice as much for each unit of GreenPower in the 10% purchase case, 10 cents rather than 5 cents. However, presenting the cost per unit of electricity consumed makes the 10% product appear better value. The additional cost per unit of electricity is 1 cent compared to 5 cents, even though the business is paying twice as much for GreenPower. Costs for large business customers are generally negotiated on a case by case basis, so no information is given for these products. Offset products Three retailers, AGL, Origin, and Synergy, offers offset products to business customers as an alternative to purchasing GreenPower. As zero emission renewable electricity is available, and Australia needs to make more of it, Green Electricity Watch considers it inappropriate to offer offset products to electricity customers trying to do the right thing. Offset products are likely to add to confusion and divert customers away from accredited GreenPower products. A penalty of 10% has been imposed on retailers offering offset products for electricity. Analysis There is a wide spread of product scores, from 20% to above 75%. The major differentiation between products arises from: 30 August

18 Penalties for describing the backfill as renewable energy (unless it is Gold Standard), or for offering products aimed at neutralising electricity emissions, other than accredited GreenPower. The different Power Purchase arrangements, with some retailers scoring zero as they have no PPAs with accredited GreenPower generators, or very little, as their PPAs cover only a small volume; The amount of customer electricity which will come from accredited GreenPower, and whether the provider sets a minimum purchase. Note that scores have also been calculated assuming that the customer buys 100% of GreenPower, for one product per retailer. The clarity of promotional material. Since the last survey, there has been a marked reduction in the number of non-accredited green electricity products offered. At the time of the survey there was only one non-accredited green electricity product on offer, from Red Energy. There has also been a reduction in the number of retailers which describe the backfill of their GreenPower products as renewable. Only four retailers still use this confusing practice in business products, and it is hoped that by the time the next survey is conducted the practice will have ceased. NOT RECOMMENDED FOR PURCHASE Red Energy, offers a non-accredited renewable electricity product. The Green Electricity Watch survey recommends you do not buy this product. Synergy and AGL offer an accredited offset product, Earth Friendly. This is not an electricity product and instead aims to reduce emissions in other areas. Green Electricity Watch recommends you do not buy this product and instead purchase an accredited GreenPower product to reduce your electricity emissions. 30 August

19 Table 3: GreenPower products for small to medium businesses (all percentages) Very good Good Fair Poor Extra charge Products for businesses using Minimum per unit of Rating less than 160 MWh per year Company % 1 GreenPower 2 States available Greenchoice 200% ActewAGL 200% 5.5 ACT, NSW Greenchoice 100% WIND ActewAGL 100% 5.5 ACT, NSW PureEnergy Premium Energy Australia 100% 5.4 ACT, NSW Greenchoice 50% ActewAGL 50% 5.5 ACT, NSW INgreen Business 100% Integral 100% 5.5 NSW, QLD TRUenergy Wind Power TRUenergy 100% 5.8 ACT, NSW, SA, Vic Premium Green South Australia Electricity 100% 4.4 Vic Premium Green Victoria Electricity 100% 4.4 Vic Greenchoice 25% ActewAGL 25% 5.5 ACT, NSW INgreen Business 75% Integral 75% 4.4 NSW, QLD Greenchoice 10% ActewAGL 10% 5.5 ACT, NSW Ark Climate Business Ark Climate 3 75% n/a Nationwide Greenchoice 60 ActewAGL 14% 5.5 Nationwide Greenchoice 30 ActewAGL 7% 5.5 Nationwide countrygreen energy 100% Country Energy 100% n/a ACT, NSW, QLD, SA, Vic Greenchoice 10 ActewAGL 2% 5.5 Nationwide NaturalPower 100% Synergy 100% 3 WA GreenEarth Business Origin 20% no charge QLD, SA, Vic PureEnergy 10 Energy Australia 10% 6.6 ACT, NSW NaturalPower 75% Synergy 75% 3 WA GreenEarth Wind offset Origin 20% 5.5 Nationwide PureEnergy 100 Energy Australia 1% 5.4 ACT, NSW, QLD AGL Green Energy AGL Energy Ltd no minimum 6.1 NSW, QLD, SA, Vic Climate Neutral Emerald Climate Friendly 3 No minimum 4 Nationwide Climate Neutral Green Climate Friendly 3 No minimum 4 Nationwide Climate Neutral Economy Climate Friendly 3 No minimum 4 Nationwide INgreen Business 10% Integral 10% 11 NSW, QLD COzero Business COzero 3 No minimum 4.8 Nationwide INgreen Business 2.5% Integral 3% 22 NSW, QLD TRUenergy Eco-Friendly TRUenergy 3% 5.8 ACT, NSW, SA, Vic NaturalPower 50% Synergy 50% 3 WA Greenswitch Green Switch 3 no minimum 4.1 Nationwide NaturalPower 25% Synergy 25% 3 WA EcoGreen South Australia Electricity 10% 4.4 SA EcoGreen Victoria Electricity 10% 4.4 Vic NaturalPower 10% Synergy 10% 3 WA Clean Energy Ergon 1% 6 QLD 0.5 countrygreen energy - business Country Energy 10% 1.1 ACT, NSW, QLD, SA, Vic 1) The GreenPower rules do not specify a minimum percentage a business may purchase, but some products or companies do. This ranking gives credit for setting a minimum percentage. 2) This is the extra charge for each unit of green electricity. For a 100% GreenPower product you pay this extra charge for each unit that you use, for a 10% product you only pay it on the 10% which is green. This charge is inclusive of GST; n/a means additional charge is not available. 3) These companies only sell GreenPower and do not supply electricity to your business. This product is GreenPower equal to double the customers total electricity use. The product scores the same as if it was 100%, although it has double the environmental benefit. This is because a 100% product gets the maximum score available for that survey question.

20 Green Electricity Watch Survey 2007 Table 4: 100% GreenPower products for small to medium businesses These products have been scored assuming that the business buys 100% GreenPower 1 Very good Good Fair Poor Products for businesses using less than 160 MWh pa Extra charge per unit of GreenPower 2 Rating Company Score States available Greenchoice 100% WIND ActewAGL % ACT, NSW, PureEnergy Premium Energy Australia % ACT, NSW, AGL Green Energy AGL Energy Ltd % NSW, QLD, SA, Vic Climate Neutral - Emerald Climate Friendly % Nationwide GreenEarth Business Origin Not available 48% QLD, SA, Vic COzero Business COzero % Nationwide INgreen Business 100% Integral % NSW, QLD, TRUenergy Wind Power TRUenergy % ACT, NSW, SA, Vic Ark Climate Business Ark Climate 3 Not available 53% Nationwide Premium Green South Australia Electricity % SA Premium Green Victoria Electricity % Vic Greenswitch Green Switch % Nationwide countrygreen energy Country Energy Not available 45% ACT, NSW, QLD, SA, Vic NaturalPower 100% Synergy % WA Clean Energy Ergon % Qld (only 50% accredited) 4 Table 5: 100% GreenPower products for large businesses These products have been scored assuming that the business buys 100% GreenPower 1 Very good Good Fair Poor Rating Company Score States available Products for businesses using more than 160 MWh pa Greenchoice 100% WIND ActewAGL 68% ACT, NSW, PureEnergy 100 Energy Australia 59% ACT, NSW, QLD, Climate Neutral Emerald Climate Friendly 3 58% Nationwide TRUenergy Wind Power TRUenergy 55% ACT, NSW, SA, Vic Pacific Hydro 100% Pacific Hydro 54% Nationwide Ark Climate Business Ark Climate 53% Nationwide Premium Green South Australia Electricity 52% SA Premium Green Victoria Electricity 52% Vic AGL Green Energy AGL Energy Ltd 48% NSW, QLD, SA, Vic Origin Green Power Business Origin 48% ACT, NSW, QLD, SA, Tas, Vic AuroraGreen Aurora Energy 47% ACT, NSW, QLD, SA, Tas, Vic countrygreen Country Energy 45% ACT, NSW, QLD, SA, Vic NaturalPower 100% Synergy 44% WA Greenswitch Green Switch 3 45% Nationwide 1) Only one product from each retailer has been scored 2) This is the extra charge for each unit of GreenPower. For a 100% GreenPower product you pay this extra charge for each unit that you use, for a 10% product you only pay it on the 10% which is green. This charge is inclusive of GST; n/a means information is not available. 3) These companies only sell GreenPower and do not supply electricity to your business. 4) Clean Energy from Ergon is a product which is only 50% accredited, so buying 100% Clean Energy will only result in 50% use of GreenPower. 30 August