100% GreenPower is a government scheme that ensures that for every 1 kWh (Kilowatt Hour) of electricity a customer uses, 1 kWh of renewable energy is generated (it is possible to get less than 100% GreenPower, but Uniting Energy is not using these products). As such it is an easy way for consumers to switch to renewable electricity.
The City of Sydney has recently launched an initiative to persuade its residents to switch to GreenPower. Their material explains it very well – click here to view.
Uniting Energy adds to this scheme by buying its power through a process of competitive tender to buy 100% GreenPower at a relatively low price. This saving is expected to mount as the sites under our purchasing group increase and re-tendering occurs every 12-24 months. Most church councils do not actively manage energy procurement as closely as Uniting Energy will. The 2022 tender process resulted in Powershop being selected as energy retailer to Uniting Energy.
The GreenPower scheme is not perfect and could be improved, undermined or even abandoned by future governments. Better, smarter, or cheaper government or commercial schemes could be introduced. We note in particular the May 2022 report by Common Capital that includes proposals to strengthen and better publicise GreenPower. Uniting Energy will be monitoring developments and will shift its supplier and scheme depending upon what is available, and as best fits the direction that the Synod wishes to take. Again, this is something that individual Church Councils will have great difficulty in doing – signing up with Uniting Energy ensures that they don’t need to do so.
While Uniting Energy is and will be not-for-profit, a margin on power sales will be used both to pay internal costs, and to cover and encourage additional services to Congregations that will reduce emissions in line with Synod policies.
1. Do we have to wait for the Uniting Energy roll-out in 2023 in order to switch to GreenPower electricity?
No. You could apply to join the Uniting Energy Pilot. The advantage of this is that it is likely to be cheaper, because Uniting Energy goes out to market via a tender for GreenPower electricity. But you could go direct to an energy retailer and request GreenPower. Most energy retailers will supply it on request, for an additional cost per kWh.
In addition, there are a small number of energy retailers with their own guaranteed schemes. For example, Red Energy has three schemes that offer a ‘Renewable Matching Promise’ whereby ‘For every unit of electricity you buy from Red Energy, Snowy Hydro Limited will match it by generating one unit of electricity from a renewable source”.
A useful resource if you want to seek out your own GreenPower (or equivalent) suppler is the recent Greenpeace report ‘Green Electricity Guide’.
2. The ACT already purchases renewable energy for all residents, businesses and other energy users. Is there any point in ACT congregations switching to Uniting Energy or otherwise buying GreenPower electricity?
The ACT scheme commenced in 2020 and this year has rewarded residents with an electricity price drop at a time when most Australian consumers were subject to substantial price increases. It is currently not clear whether there is additional benefit to the environment in ACT congregations switching to GreenPower. If you have insights into this area, please contact us and share them.
3. Paying for GreenPower doesn’t change the nature of the physical power supplied from the grid (unlike a solar installation), so how can it help?
A fair point in one sense – power from the grid is pooled (like a reservoir of water) and so any grid power will contain some degree of fossil fuelled electricity. However by selecting a GreenPower supply one is ensuring that income flows back to renewable power generators, so one is buying renewable power even if one is (necessarily) receiving a mixed physical supply. As more and more businesses, not-for-profits and individuals do this so supply will tilt more and more towards renewably generated power.
4. Given that only a few cents per kWh of electricity purchased are designated as GreenPower how can that make such a big difference?
When one pays those few extra cents for 1 kWh of GreenPower electricity then the energy retailer is legally bound to purchase an equivalent 1kWh share in a Large-scale Generation Certificate (LGC). (An LGC is received by the generator whenever they generate 1MWh of renewable energy).
The energy retailer can do this in three ways:
By way of example, in June 2022 LGC prices reached $50 (source)(an LGC is for 1 MWh, so this equates to 5 cents for 1 kWh). By comparison Uniting Energy customers were paying 3.8 cents for GreenPower, so buying on the secondary market could lose the energy retailer 1.2 cents for each kWh sold. This is why this option is not favoured by the energy retailers.
So in the above example, if the energy retailer could enter into a PPA with a renewable generator who would sell LGCs to them at, say, 3 cents per kWh then they would make a profit of 0.8 cents for every kWh sold to Uniting Energy customers. Good news for them, UE customers and the climate.
5. This all sounds complicated – it must cost someone a lot in administration?
The GreenPower scheme uses the same market mechanism – LGCs – as the previously existing mechanism for compliance with the Renewable Energy Target (RET). (Under the RET the government required energy retailers to either purchase renewable electricity or LGCs as a path to meeting the Renewable Energy Target). The scheme is administered by the NSW Department of Planning, Industry and Environment (Australia-wide) financed, at least partly, by annual fees paid by energy retailers that sell GreenPower products.