When choosing an electricity provider, it’s important to do your homework. They all buy and take their power through a central pool which is filled by any electricity generator that wishes to provide electricity to users in Victoria, or whichever state they are in.
Whether the generator is an old coal fired power plant, a wind farm, or any other electricity generator does not matter – they all feed into the same pool. Electricity providers then take this same blended electricity and provide it to all users. That’s right, we all get our power from the same blended sources!
So, is green power really green if we all get our power from the same pool? The answer is Yes and No.
Yes, green power is green
An electricity provider can strike a financial contract with a green power generator, which can have the same effect as a physical contract to provide green power. For example, an electricity provider can have a financial contract with a wind generator that the wind generator can then use to support more wind powered electricity production into the pool. This can potentially displace coal fired power generation.
The more financial contracts that are taken out with green power providers, the more environmental impacts can be reduced. More so, when customers purchase green power, they are supporting the production of renewable sources that are constantly replenished by nature and do not produce greenhouse gases when producing electricity.
No, green power is not green
We need to remember that all electricity providers take their electricity from the same pool, so all electricity providers can claim a proportion of this green power for their customers. However, if the wind does not blow, or ironically blows too hard, then the wind turbines will not produce any power to supply the central pool. This shortfall is then usually made up for by gas or coal fired generators.
More so, green power is not added directly to the customers’ power supply. If they choose to switch to renewable energy sources, the green power is added to the electricity grid on the customers’ behalf. Meaning those signed up for green power are in fact using the same energy as those who are not.
So is the industry – ensure you do your homework carefully when you hear claims of green power and renewable energy from electricity providers. It is fantastic we all do our bit to reduce the impact of electricity generation on the environment, but just ensure you know where and how this green power is making its impact.
About the author
Domenic Capomolla is the founder and CEO of Sumo Power. Having worked in the energy industry for close to 20 years, Domenic is an expert on deregulated and contestable power and gas markets.