How renewable are the “Big Three” energy retailers?

Figures correct at 30 June, 2016

AGL, Origin Energy and Energy Australia are known as the “big three” electricity companies, dominating the Australian energy retailing industry. While all three claim to be supporters of renewable energy, AGL, Origin and Energy Australia all still rely heavily on fossil fuels for the vast majority of their business.

While small steps have recently been taken to develop new renewable opportunities, the dirty three have all been guilty of delaying and diluting climate policies in recent years. AGL in particular claims to be a major supporter of renewables, but remains Australia’s biggest climate polluter, and plans to keep its coal power stations open beyond 2050.

We’ve taken a look at just how much renewables mean to the business and operations of each of AGL, Origin and Energy Australia. Check out the results below.

Renewables in their energy mix

Only 18% of AGL’s total power generation capacity is fed by renewable energy, while the proportion of energy actually generated by AGL’s renewable sources is just 9%. Until September 2014, AGL’s total generated electricity was closer to 20% but the purchase of the Bayswater and Liddell coal power plants has skewed AGL’s portfolio to be one dominated by coal-fired electricity. Effectively, buying two major coal-fired power stations has cut in half the proportion of energy that AGL generates from renewables.

At Origin, which produces around half as much energy as AGL, renewable energy makes up around 15% of power generation capacity, and 11% of electricity generated. Energy Australia’s renewable energy generating capacity is 10%, and while they don’t disclose the actual generation figures, it is highly likely renewables make up less than 10% of all energy generated.

 
% of renewable energy in generating capacity mix
% of renewable energy in generation mix
AGL
18.45% 9.10%
Origin Energy
15.02% 11.00%
Energy Australia
9.96% Undisclosed
Revenue from renewable energy

We have estimated the proportion of revenue that AGL, Origin Energy and Energy Australia source from their renewable energy operations by taking the share of renewable energy generation and discounting this figures based on the proportion of revenue each company makes by producing and selling electricity. We estimate the contribution of renewable energy to each company’s revenue as follows:

Revenue generation from
renewable energy
AGL
7.92%
Origin Energy
0.60%
Energy Australia
1.67%

*Note that the AGL and Energy Australia estimates are from the first half of the 2014-15 financial year, while the Origin Energy estimate is based on the 2013-14 full financial year.

Greenhouse gas emissions

All three electricity retailers are among the highest greenhouse gas emitters in Australia. A recent report from the Australian Conservation Foundation found that AGL, Energy Australia and Origin ranked as Australia’s #1, #2 and #5 most polluting companies, respectively.

The table below contains our estimates of each company’s greenhouse gas emissions, and where they will now rank among Australia’s most greenhouse gas-emitting companies.

Annual CO2-e emissions
# Ranking of Australia’s most greenhouse gas emitting companies
AGL
38,842,169 #1
Energy Australia
20,957,838 #2
Origin Energy
17,142,797 #5

The combined greenhouse gas emissions of the big three electricity retailers now amount to almost 77 million tonnes, around 14% of Australia’s total emissions.

Trends

Recently, renewable energy has become a significantly smaller part of AGL’s power generation portfolio. AGL’s 2014 purchase of Macquarie Generation brought the Bayswater and Liddell coal-fired power stations under their control and catapulted the company to the position of Australia’s #1 climate polluter.

Outside of electricity generation, both AGL and Origin have made major plays into the coal seam gas industry, however AGL has announced it will be retreating from the sector. Origin is a part-owner of the Australia Pacific LNG plant built in Curtis Island in the Great Barrier Reef World Heritage Area.

Renewable Energy Policy

In 2015, all three electricity retailers worked to undermine Australia’s most prominent renewable energy policy: the Renewable Energy Target. As former Liberal Party Leader Dr John Hewson wrote in The Guardian:

“Their claim to support renewable energy while walking the corridors of power lobbying to undermine it smacks of hypocrisy”

It should be no surprise that companies whose business is overwhelmingly and increasingly dominated by fossil fuels would actively undermine policies to promote renewable energy. But AGL, Origin and Energy Australia should not be able to portray themselves as renewable energy companies when they have taken not only themselves, but also Australia, further away from renewable energy.

 

More information

We recommend the Australian Conservation Foundation’s “Australia’s top 10 Climate Polluters” report for more information on the big energy retailers and other major greenhouse gas emitting companies.

You can also see the full briefing papers we produced for each of the big three retailers in 2015 by following these links:

*Please note: the information in these briefings is correct to March 2015.