All electricity retailers in Australia are obliged to surrender Large-scale Generation Certificates (LGC’s) from renewable sources since 2001 and up until 2030, representing initially around 2%, growing to 20% in 2020, and declining slightly since then as it’s a static target against a growing overall load. Additionally, some retailers have “voluntarily” surrendered LGC’s to match against their retail load and potentially their relatively small generator auxiliary loads/battery charging. This enables them to then claim that customers are sourced by a share of renewable energy.
I thought it was worth examining which retailers contribute the most relative to their mandated requirements, an imperfect but indicative measure of the retailer and their customers’ efforts. Voluntarily surrendered LGC’s support large-scale projects (>100kW) such as PV projects and wind farms, creating demand above the mandated renewable energy target. It includes LGC’s surrendered for Greenpower (www.greenpower.gov.au), their own retail green products and in some cases, on behalf of their larger customers. It does not include the case where customers voluntarily surrender on their own behalf. It also does not include offsets for carbon or any efficiency schemes etc.
I have excluded a few retailers that have gone out of business such as Jack Green, COZero, Energy One, Mojo Power etc. It was also necessary to aggregate at a total portfolio level as voluntary surrenders don’t need to match with specific customer loads. This meant ACTEWAGL, Powerdirect, Perth Energy and Powerdirect were aggregated under AGL; Citipower and Sun Retail were amalgamated under Origin Energy; International Power was merged with Engie; Powershop was subsumed into Shell; whilst Red Energy, Lumo and Sumo were included under Snowy Hydro. There may also be small amounts of LGC’s not captured if voluntarily surrendered under an unrecognised business name, but these amounts are small.
It’s also worth noting that the surrender of LGC’s is a real additional cost and these figures do not include household rooftop solar because much of it is self-consumption and because this has already been paid for by all consumers through the small-scale renewable energy target. An electricity customer usually has to pay extra to support voluntary surrender, and they will not always get cheaper energy by supporting additional renewable generation unless they get better underlying energy contract prices. Essentially, these are genuine commitments to boost the supply of renewable energy in Australia.
The chart shows the amount of voluntarily surrendered LGC’s vs those mandatorily surrendered, where higher percentages show greater effort. The horizontal access reflects the relative size of the retailer’s portfolio but it is an imperfect measure as it relates to differing annual obligations based upon annual sales and the Renewable Power Percentage (RPP) each year. That said, it does provide an indication of the relative sizes of each of the retailers, with the smaller ones clustered on the left and a few of the large gentailers on the far right due to their significant customer portfolios.
Notably, Origin Energy appears to support a larger share of additional renewable energy when compared to AGL and Energy Australia. Most small retailers only do modest additional contributions, usually less than the large retailers. The retailers of significance are Iberdolda, Zen Energy and Snowy Hydro. The highest relative performer is Zenith Energy but this can be easier to achieve with its small portfolio size. These measures are not absolute but do provide an indication of how retailers and their customers purchase additional renewable power.