What makes an electricity provider 'green'?
Green energy is at the forefront of our minds at the moment as governments globally discuss moving towards carbon neutrality. While retail energy prices hit eight-year lows in Australia, wholesale and future prices have begun climbing as the cost of importing coal increases.
Some Australians continually change providers to chase reduced rates and discounts, while many others are looking to find a greener solution.
But what actually makes an electricity company green? Electricity providers can claim a few different things to demonstrate their commitment to the climate.
For some, investing in sustainable energy sources such as wind, solar and hydropower will get them over the line with new customers.
Others will allow their clients to go carbon neutral by purchasing carbon offsets to cancel out their emissions.
Some also allow consumers to contribute to the federal government's GreenPower initiative, which invests in renewable energy.
And companies can receive a Climate Active certification, which recognises their organisation as having net zero emissions.
But if green energy is what you’re after, there are a few things to consider before choosing your next electricity provider:
1. Check if the provider is backing up their environmental claims
You can check whether the company is Climate Active certified. This certification ensures that businesses and organisations have credibly reached a state of achieving net zero emissions. In other words, they have no net negative impacts on the climate.
2. Is the company actively investing in sustainable energy sources?
Consumers should look closely at energy fact sheets provided by retailers, which include details of any green energy or carbon neutral options. You should also check whether the retailer is owned by a larger parent company.
Recently, Australia's self-proclaimed ‘greenest energy provider’ Powershop was acquired by Shell. Despite Shell committing to delivering cleaner energy solutions, the acquisition led to allegations of greenwashing, which is when companies mislead consumers about how environmentally friendly they are.
Whether you’re looking for a change or want to know more about how green your current energy provider is, do your research about whether the provider is investing your money in renewable projects that boost the grid's overall renewable capacity.
3. Where your money goes is more important than where the energy comes from
It’s important to be wary of the popular misconception that consumers can purchase entirely green electricity for their homes. Unless you’re completely off the grid and self-sufficient, you can't buy 100 percent green energy for your home.
This is because, in Australia, all electricity is fed into the same grid regardless of how it's generated. So there's no real way of knowing if the power being supplied to your home comes directly from renewables.
Therefore, the best you can do is go with a provider that offsets consumer energy by the planting of trees and other green initiatives around the world. As well as by investing in renewable projects.