Are you using your energy dollars effectively to fight climate change?‍

If you’re a climate conscious consumer looking to ensure your precious cash is making a difference, it can be pretty tough to figure out what’s best when it comes to powering your home. 

So we decided to share a little explainer.

After all, your home energy is one of the biggest ways you can make a positive impact on Australia’s carbon emissions, the fate of our climate and all of us who depend on it.

Electricity contributes around a quarter of global emissions worldwide, while in Australia, this figure rises to a third thanks to our preference for burning a lot of coal for electricity generation. It's one of why reasons why we have  some of the world’s highest per capita emissions.  

In this explainer, we'll cover:

How traditional GreenPower works

How Amber stacks up against the other “green” options out there

How you can ensure you’re making the greatest climate impact with the money you spend on electricity.

If you've got any questions, shoot me an email at info@amber.com.au.

Q1. What is GreenPower?

GreenPower is a government-managed program. When you choose a GreenPower plan, you know that for every kWh of dirty power that you use in your home, an equal amount of GreenPower is being bought by your energy retailer from renewable energy sources. 

Let's say your family or home uses 10MWh of power over the course of a year. Your energy retailer would buy the equivalent amount of Large Scale Generation Certificates or LGCs from an approved renewable energy project, like a large scale solar or wind farm, representing 10MWh of renewable power. This power is then sent into the grid on your behalf to offset your consumption.

This supports renewable energy developers by effectively subsidising more renewable energy projects to be built. We’re all about supporting renewables, which is why we also offer a GreenPower plan, but it’s important to be aware that paying this premium for GreenPower doesn’t change which electrons arrive at your home.

The only way someone can actually use more renewable energy in their home is if they use more power at the times that there are more renewables in the grid, or install solar and/or a battery so that they can use more of their own renewable energy.

Q2. Is GreenPower enough to get us to 100% renewables?

You might wonder if it matters if you’re using renewables in your home, so long as an equivalent amount is being generated and used somewhere.

The answer is yes, it does matter!

The GreenPower model was a great way to encourage the production of more renewable energy when there was a low share of renewables in the grid and renewables were more expensive than non-renewable energy. It provided a subsidy that increased investment in the sector and helped lower costs in a way that has benefitted us all since. In the decades since GreenPower was created, we’ve gone from almost no wind and solar in the grid to just under 28 per cent renewables in 2020. Through GreenPower almost one billion dollars was sent back to renewable energy generators which in turn can build more renewable generators. And with Australia likely requiring three times the current electricity generation capacity from renewables to decarbonise our economy in all sectors, it is as important as ever.

However, renewables are now the cheapest form of power (so cheap, in fact, that energy users with access to Amber’s wholesale pricing sometimes get paid to use power!).

As the price of renewables has fallen, integration issues - not cost - are now the key challenge to be solved if we’re to accelerate Australia’s uptake of renewable power.

These integration issues are discouraging further investment in renewable power because investors in renewable energy generation (solar farms, wind turbines) can’t be sure if there will be enough demand for their power. And if they can’t sell that power for a reasonable price and get a return on their investment, they won’t build more wind and solar farms! This can be seen in the fact that there’s been a large decline in the amount of investment in renewable power generation in Australia.

"Even if everyone in Australia bought 100% GreenPower we wouldn’t get to a future powered by 100% renewables unless we also solve these renewables integration challenges. There would be too much renewable power when the wind is blowing and the sun is shining and not enough power available at other times. This is the problem that we need to solve, and which Amber is designed to solve" - Dan Adams, Amber co-founder.

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Q3. How does Amber do things differently to GreenPower?

If we are to increase investment in renewables and take Australia to a 100% renewably powered future, we must shift energy users’ demand to times when there are a lot of renewables in the grid. Think during the middle of the day, when the sun shines and the wind is blowing. Enter Amber.

Unlike other electricity retailers, Amber's whole model is focused on solving this core problem that is holding Australia back from 100% renewables.

Q4. How exactly does Amber support more renewables?

We do this by enabling and encouraging load shifting - the term for when customers change WHEN they use power. Amber's model supports more renewables by giving customers the visibility and incentives they need to shift more of their demand to cheaper, renewable times.

By looking at the wholesale prices we pass through to them via our app Amber customers can see for themselves when energy is cheapest. This also happens to usually be when cheap renewables are at their peak in the grid. Whether they're motivated more by cost-savings, climate action, or both, customers are incentivised to do more of their energy-intensive activities at these greener times.

This load shifting by home energy consumers has several major effects: 

1. Increased demand for electricity at the times that renewables are generating, allowing more renewable energy projects to be built. 
2. Customers save money in the process. 
   

In fact, with a million Amber customers, we could shift enough demand to replace an entire coal-fired power station with wind and solar farms. 

Q5. What happens if we don't load shift?

The alternative to load shifting? A much slower transition to 100% renewable energy, if we get there at all.

Or storing massive amounts of renewable energy generated during the day for use later, using technology like batteries or pumped hydro.However, the cost of installing this amount of storage is still prohibitively high - meaning that we’d have to wait a long time to get to 100% renewables. And none of us can afford for emissions not to drop significantly this decade. 

Q6. Do we really need to get to 100% renewables? Isn’t something better than nothing?

Getting to 100% renewables isn’t just a warm and fuzzy idea. It’s critical that we reach net zero within a few decades and that emissions start to plummet this decade if we are to avoid major disruption to our lives and the lives of our children on the earth in coming decades and beyond, due to extreme weather events, sea level rise, food scarcity, and biodiversity loss. 

We need to act faster to reduce carbon emissions than our previous approaches to energy generation have allowed. UN Secretary-General, Antonio Guterres described the findings of the most recent report from the Intergovernmental Panel on Climate Change (IPCC) and its 234 international scientists as a “Code red for humanity”, leaving “no time for delay and no room for excuses”.

Reducing emissions created when we generate electricity to power our homes is particularly important to achieving net zero, for reasons touched on in the introduction to this article.

To sum up: The GreenPower model helps to subsidise wind and solar farms, but we need to do more if we're going to reach a future powered by 100% renewable energy. To do that we need to match more of our demand for power with the times renewable energy projects are generating. The Amber model was designed to make this possible, by empowering our customers to use all that cheap renewable power when it’s available in the grid. This is the fastest and cheapest way to get us to a future powered entirely by renewables - a future we can't afford to wait for.

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Have any questions? Let's talk: info@amber.com.au.