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The Ultimate Guide to Renewable Energy in Australia

The energy transition - meaning the switch from fossil-based sources of energy such as coal, natural gas, and oil to renewable sources of energy - is upon us. More and more countries across the world are moving away from these harmful fuel sources and Australia is no different. But, what exactly are renewable energy sources and how can you support the development and implementation of renewable energy in your home and community? What is the government, and private organisations doing to help with the transition? Learn more about the Australian energy market and its transition to cleaner, greener, energy, by reading below.


What is renewable energy?

Renewable energy is natural energy that is constantly replenished in an efficient and sustainable way, without damaging the environment. Unlike fossil fuel or coal which take millions of years to be created, renewable resources can be replenished within the human timeline. Renewable resources include water (hydro) power, solar, wind, biomass, and geothermal, but does not include nuclear energy at the moment due to the elements needed to create the nuclear reaction (however this could change as technologies evolve in the future).

What is the difference between clean energy, green energy, and renewable energy?

While often used synonymously, renewable energy, green energy, and clean energy have some slight differences in their effect on the planet. All of them are considered better alternatives to traditional fossil fuels or coal energy but knowing the differences can help you make the best-informed decision when it comes to helping the planet.

 Clean energy: Any energy that does not pollute the air is considered clean energy. Nuclear energy, while not renewable due to the current use of finite resources or green since it is not a natural production of energy, is considered clean as it does not pollute the air like coal or fossil fuels.

 Green energy​​​​​​​: Green energy is energy that is derived from natural resources. Most forms of green energy are also renewable but not all renewable energy is green. Some might argue, for example, that due to the vast industrialization needed to create hydropower it can be considered renewable but not green.

There is some obvious crossover between these types of energy, and these terms are often used interchangeably. For the most part, however, when people refer to renewable or green energy they are referring to the five major renewable resources: solar, wind, hydro, biomass, and geothermal.

Types of renewable energy

There are many different types of renewable resources that can be used to generate energy. When most people think about renewable energy, solar energy, wind power, and hydropower are three of the most well known but other sources such as biomass or geothermal energy are both also used in the transition to renewable energy.

Solar energy

Solar energy is arguably one of the most abundant and widely available resources on the planet, and Australia is well-suited for solar power. The sun itself is one massive nuclear reactor, which radiates out the energy to fuel our planet. By harnessing the sunlight (called photons) and utilizing photovoltaics (PV) or solar thermal harnessing, we can transform that sunlight into energy for our use.

Due, in a large part, to the increasing accessibility of solar PV technology, solar is also the most common source of renewable energy at the small-scale and residential level. As the cost of solar PV systems drops, individual households and private businesses are better able to purchase and install solar panels on their own properties. Many energy providers, as well, are adding incentives such as solar feed-in-tariffs, to continue to push their customers to invest in solar energy.

Solar feed-in-tariff A solar feed-in-tariff (FiT) is an energy buy-back scheme implemented by the majority of energy providers. Customers who have solar panels and a solar battery can send unused energy back into the grid which is purchased by the energy companies. Your solar FiT can vary widely depending on where you live, your energy provider, and the electricity plan you’re on.

As of the end of 2020, small-scale solar accounted for 23.5% of all renewable energy generated in Australia, behind wind power and narrowly beating out hydro as the #2 renewable energy in the country. Today, 1 in 4 Australian households now have solar panels installed on their roofs.

What can solar energy be used for? Solar energy has a number of different residential uses. In addition to the classic rooftop solar panels, you frequently see on Australian homes, solar thermal energy can be used to heat water for home use and to heat pools.

Hydropower and hydroelectricity

Hydropower, which is energy generated from the movement of water, is another popular renewable energy resource. The use of water to generate energy has been around for a long time, with people harnessing its power for boats, grain mills, and even mining. It is also one of the largest contributors to renewable energy worldwide, contributing to over 16% of the world’s energy production and over half of all renewable energy produced globally.

Unlike solar, hydropower is often done on a larger scale as it requires the use of vast turbines and generators and the movement of large amounts of water. That’s not to say residential and small-scale hydro isn’t a possibility, just that you need a continuous supply of swiftly moving water in order to generate enough energy to offset the cost of the system and it can be hard to find a fast-enough, large-enough, body of moving water on smaller private property.

Australia has over 120 hydroelectric power stations, which contribute 23.3% of all renewable energy generation in the National Electricity Market. Snowy Hydro powerplant, the parent company of Red Energy and Lumo Energy retailers, is the largest of the country’s hydroelectric stations, contributing to over half of all hydropower within Australia. At present, there are plans to expand Snowy Hydro, with a plan called Snowy 2.0 in an effort to decrease Australia’s dependence on nonrenewable energy sources while implementing renewable energy storage and kWh output.

Prior to the Clean Energy Council releasing their 2020 Clean Energy Report, hydropower was the second-biggest source of renewable energy in Australia. However, following an increase in both the capacity of small-scale solar PV systems (jumping from an average of 7.72kW per system in 2019 to 8.04kW per system) and the number of solar installations over 2020, it’s now the #3 renewable energy in Australia.

Wind energy

Through the use of wind turbines, it is possible to capture the power of the wind and convert it into electricity. Kinetic wind energy is converted into electrical energy through propellers spinning gears connected to a generator which then transforms the energy into electricity. While there are some difficulties when it comes to wind energy, as some of the most profitable places are also the most remote areas and the noise and large turbines can disrupt the wildlife in the area, technological advancements are making wind energy cheaper, easier, and less disruptive.

Wind energy has always reigned supreme in Australia, accounting for over 35% of the clean energy generation in the country and almost 10% of the total Australian electricity generated in 2020. As the cost of wind energy technology continues to decrease, this number is only expected to grow.

Other renewable energy resources

While solar, hydro, and wind power are some of the most well known and popular renewable energy sources, there are other sustainable sources that provide energy to consumers across the world. While not as popular or well known, as the cost of technology decreases and interest in alternative energies increases, we can expect to see more and more of these alternatives become commonplace.

Geothermal energy

Geothermal energy takes heat from the Earth, in the form of steam or water, which is transformed into electricity. According to the Australian Renewable Energy Agency, while Australia has immense geothermal energy potential it is not the most financially viable renewable energy option due to the significant start-up costs for the geothermal system technology needed, as well as the difficulty in identifying and then extracting the geothermal reservoirs. As such, it accounts for around 0.001% of the country’s total clean energy consumption.

Bioenergy and biomass

Bioenergy utilizes living or once-living organisms to create electricity by burning the biomass to create hot gas. These organisms can be anything, but wood waste, black liquor (a by-product from paper manufacturing), biogas from landfill or sewage methane, energy crops, commercial crop residue, or household garbage or garden prunings, are the most common. This hot gas is then generated into steam through a boiler, which is run through a steam engine or turbine to create mechanical or electrical energy. As of 2020, biomass energy accounted for 1.4% of total energy production and 5% of renewable energy production in Australia.

Renewable energy in Australia

Thanks to its ample sunshine, large bodies of moving water, and strong winds, Australia is a country well-positioned for the transition to clean, green, and renewable energy sources. According to the International Renewable Energy Agency (IRENA), Australia is seventh globally in terms of installed renewable energy capacity, with a total installed capacity of over 17,600.000 MW in 2020.

Top 10 countries by renewable energy power capacity
Country Total installed capacity in MegaWatts
China 254,354.800 MW
USA 75,571.700 MW
Japan 66,999.949 MW
Germany 53,783.000 MW
India 39,211.158 MW
Italy 21,600.345 MW
Australia 17,627 MW
Vietnam 16,504.490 MW
South Korea 14,574.791 MW
Spain 14,089.018 MW

Source: International Renewable Energy Agency 2020 Country Ratings

Since the first iteration of the Clean Energy Council annual reports in 2013, clean energy has grown from 14.76% of the total energy generation in the country, to 27.7% of total energy in 2020. During this nearly decade-long reporting, the makeup of renewable energy has changed. Solar and wind power have both seen a boom in popularity while hydro, once the biggest contributor to renewable and clean energy in Australia, has been on the decline.

Clean Energy Council Reports 2013 - 2021

Following 2020, and all that happened, solar power has seen a boom in popularity, particularly small-scale solar PV. A record number of small-scale solar PV systems were installed in 2020, pushing out hydropower as the second-biggest contributor to clean energy in Australia and coming in behind the number one clean energy source: Wind.

Source: Clean Energy Council 2020 Report

Green energy providers in Australia

It makes sense to want to support an energy company that supports the environment, but it can be difficult to determine which energy providers are actually green. When choosing an energy provider, some things to consider are:

  • Does your energy provider offer GreenPower or another carbon offsetting initiative?
  • Does your energy provider offer a high solar feed-in tariff to entice customers to invest in solar panels?
  • Does your energy provider own renewable energy assets, such as wind, solar, or hydroelectric generation plants?
  • Does your energy provider provide advice or ways to help you reduce your energy consumption?
  • Does your energy provider offer unique ways to support the energy transition, particularly within local communities?
  • What steps has your energy provider taken in recent years to support the energy transition?

Energy providers that offer GreenPower

GreenPower is a government-accredited initiative that enables energy consumers to offset their energy usage. Customers can choose to offset between 10% and 100% of their energy consumption, often at a small additional cost. Some providers that offer GreenPower include:

It’s important to understand that GreenPower does not mean you yourself are getting your energy from a renewable or green energy source. Rather, after you consume your energy your provider pays into the program on your behalf to support future renewable initiatives.

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Energy providers with carbon-neutral initiatives

Similar to GreenPower, energy providers can also choose to carbon offset the energy customers consume by supporting renewable energy development globally. Unlike GreenPower, carbon offsetting is often free, without an additional charge to the consumer, but it also means fewer energy providers offer this carbon offsetting. Energy companies that offer carbon-neutral initiatives include:

  • AGL
  • DC Power Co
  • EnergyAustralia
  • Energy Locals
  • Enova Energy
  • Nectr
  • Origin Energy
  • OVO Energy
  • Powershop
  • Simply Energy

Top 5 Green Energy Providers & The Green Electricity Guide

The closest thing to an independent green energy retailer ranking Australians have comes from GreenPeace’s Green Electricity Guide. First released in 2014, then 2015, and, most recently, 2018, the Green Electricity Guide offers a comprehensive ranking of energy providers in Australia based on criteria including carbon emissions, carbon offset, support for local energy and renewable energy projects, among other things.

Unfortunately, while there does not appear to be an updated guide coming out in the near future, the 2018 Green Electricity Guide still offers valuable information and insight into the greenest energy providers in Australia. The top 5 greenest energy providers in Australia, according to the 2018 version of the guide, are:

Top 5 greenest energy providers
Rank Retailer Score
1 Powershop 9.7
2 Diamond Energy 9.1
3 Energy Locals 7.4
4 Enova Energy 7.4
5 AGL 7.0

Source: GreenPeace 2018 Green Electricity Guide

It’s important to note that the Australian energy sector is quickly changing, and a guide published in 2018 will not have all the most relevant and recent information. Particularly with clean and renewable energy, more and more power companies are beginning to transition to renewable generation sources.