A big disconnect between words and actions?


As someone who works in the energy sector, and also uses social media (primarily Twitter and LinkedIn) it’s fairly frequent that I hear someone talking about some particular survey that returns a very high rate of public support for renewable energy.  Today was no exception, with a survey run in NSW being quoted today.

In the past, I have wondered (on hearing such high numbers) how these sentiments have translated into action for both residential and business customers.  Hence today I accessed the most recent  of these GreenPower Quarterly Reports (Q4 December 2015, so there seems to be a fair lag) to check out the statistics provided herein:

2016-11-18-GreenPower-differencebetweenWordsandAction

There does seem to be a big disconnect, that I don’t understand – if 83% of people surveyed in NSW want more renewable energy generated, then why is it that a much lower percentage (less than 5%, with an assumption of many more than 1,000,000 residential customers in NSW) seem to actually pay for it themselves, directly?

I understand that some customers won’t be aware of the availability of the GreenPower program, as a means through which they can (today) put their preferences into action.  But gut feeling suggests there would be other factors involved…

I assume that someone else has already worked this through, to explain the reason(s) for the difference.

If anyone can help me understand such a large apparent difference between words and actions, please leave a comment below (including any URL references to previous explanations) – or contact me directly?

About the Author

Paul McArdle
One of three founders of Global-Roam back in 2000, Paul has been CEO of the company since that time. As an author on WattClarity, Paul's focus has been to help make the electricity market more understandable.

17 Comments on "A big disconnect between words and actions?"

  1. I’m someone who actually follows a few utility market blogs like your own, so I’m reasonably more informed than most people out there. This is literally the first time I have ever heard of this program. I’m now going to have to go back to the quarterly novel that my power company sends me and see if they ever mention these plans.

    But here’s what I see when considering this:
    1) First of all, I never knew about it, and I just asked a few co-workers none of whom have ever heard about this.

    2) The charge for 10% is $1.10 per week and the charge for 20% is $1.80 per week. Those are pretty damn affordable, but at such low percentages they make me feel like they’re not really making a difference. This also makes me suspicious that this is just like other green schemes where you’re paying money for the promise that someone has done something, while I wouldn’t feel confident that they actually did. What is their overhead on this plan, how much goes to admin, versus just paying for the electricity?

    3) The charge for 100% is 5.5 cents per kWh. That’s a great percentage, though it would literally mean roughly $2 per day for me which is $182 per quarter. Which is a fucking huge jump. That’s $14.30 per week.

    4) If I’m the only person doing it and take up rates are that low, then they definitely aren’t spending this money on alternative power sources. In a hypothetical situation imagine no one in my state actually took up this plan and I was the only person who did. Do they turn on my own special wind turbine for an hour to supply my yearly needs? Of course not, so it’s not like I’m actually paying for something physical. I don’t even feel certain that by voluntarily paying more for my power that these companies would then invest in that technology more. I see these more as placebos.

    5) Why does it step from tiny amounts (10% and 20%) to 100%? Why can’t I pay for 50%? If you can pick percentages at all, why is there such a disconnect between almost nothing and absolutely everything? Things like this make me uncomfortable with why it’s structured like this.

    6) I don’t like to think about my power bill. You’re forcing a complex choice which requires some extra thought on top of picking my provider, plans, billing period, and similar. All of this just adds to further anxiety / analysis paralysis when picking these things. If you really want to see who doesn’t want this, make it the default setting that everyone pays for 100%, then have people opt out. You’d probably see these percentages reversed.

    This is why I believe there is a disconnect, it’s not because people don’t value it. It’s because the way in which you’re marketing it and selling it to me doesn’t make me feel like you’re actually doing anything different. This isn’t a vote with your wallet situation because it’s the same person promising me that they won’t just take the extra money.

    But then again, maybe I think differently than everybody else.

    • Thanks for your perspective, Uriah,

      Just to clarify – when you say “… the way in which you’re marketing it and selling it to me doesn’t make me feel like you’re actually doing anything different…” that I am not one of the ones offering to sell you the GreenPower – just someone on the outside, looking in and trying to understand.

      Think I understand your dual concerns about “additionality”, and “auditability”. My understanding is that the Clean Energy Regulator address both of these in how they audit the production of LGCs, and allow for voluntary surrender (for GreenPower, and other schemes like the ACT PPAs).

      Paul

  2. The reason I don’t pay for green power is because the electricity companies have to buy green power whether or not I pay extra for it. I thought about this for 10 seconds a couple of years ago and stopped paying for 20% green power because I feel like I’m ust subsidisng everyone else and the power company.

    • Thanks for the explanation of your situation, Mike

      The way I understand it, if you had purchased GreenPower, it would have meant additional LGCs purchased from the REC Registry (hence more green power supplied, over and above the MRET target).

      I understand the way it would feel like subsidising others, though.

      Paul

  3. I think a lot of people are willing to pay a little extra but they don’t feel it is fair if they are the only ones paying. That and the previously mentioned points about general awareness of the scheme.

  4. The answer can be found in Psychology literature. See for example http://www.sciencedirect.com/science/article/pii/S2306774815000034

  5. Government Accredited GreenPower is actually a highly regulated mechanism. When you read the actual rules on how it works, you will find that both Mike and Uriah’s concerns are adequately dealt with. The certificate schemes means that the premium is definately spent on green power and that they only have to buy the green power if their customers are signed up.

    The real problem is that people don’t know about GreenPower. At sustainability forums, you can ask who supports renewables, doesn’t have solar but has GreenPower, many people don’t know about it.

    One way the disconnect between the many who support renewables and the few who purchase green power could be decreased is by rolling out a default for GreenPower for new customers who then have to opt out if they don’t wish to pay the premium.

  6. Paul there was some analysis a couple of years ago that when times are tough people stop paying for the green power option. I don’t think that it has ever recovered from that, It had a good take up then when it was shown on the bills how much it was people simply said no. It costs extra and most won’t pay for it so agree words over actions.

  7. I think there is a difference between supporting renewable energy and deciding to pay for additional green power. Most people agree that emissions must be reduced, and that renewable energy is a means to this end. However, few people feel that their individual contribution will make any difference. Contrast this to roof top solar wherein a tangible individual benefit is perceived.
    The ACT government has recently cancelled all their green power purchases for government business because they thought they could do more good for ACT ratepayers through investment in energy efficiency.
    Climate change mitigation requires national and united national effort. Worthwhile climate change adaption can be achieved by individuals through choices that affect their built environment.

  8. Don’t know about you but I’ve had a number of Indian reps cold call offering to change my light globes, shower heads and install chimney balloons, door seals and power boards-
    http://easybeinggreen.com/energy-efficiency/
    so many consumers would have taken up the free offer and as such believe they’ve done their bit, particularly with dramatically increased power prices. We all know there’s no such thing as a free lunch and so the cost of such programs is in our power bills.

    Now I’m in Adelaide with an older Tudor home and I can tell you within a few weeks 2 of the 3 chimney balloons deflated, the TV power boards crapped themselves, the family moaned so much about the shower heads I changed them back and I already had mostly CFL globes but the Indian guy was happy to give me a heap of them and sign his form to say he’d installed them (they have someone from head office ring you on his mobile there and then and you nod and agree all is kosher, like lots did with the pink batts scheme when they already had insulation.

    Most folks I know have experienced all this and figure they’ve done their bit, particularly as they know they’re getting screwed for all this dodgy rubbish via their power bills.

  9. The reasons I don’t buy Green Power are:

    1. I’d be encouraging bad policy, making Australia less economically competitive and less efficient. Renewables reduce our productivity.

    2. Renewables are hugely expensive, requiring massive subsidies *(well over 100% subsidy) which is forcing competitive power suppliers out of the market

    3. Intermittent renewables are a very expensive way to reduce emissions. At 20% penetration, wind is about 50% effective at reducing emissions. Nuclear on the other hand is greater than 100% effective (because it tends to replace baseload coal).

    4. Wind and solar are not sustainable. Their ERoEI is insufficient to power modern society as well as replace themselves. They are entirely dependent on reliable power sources to support them.

    5. They are supported by a purely ideological agenda. This has a short life.

    6. After 60 years of solar PV and and 100 years of solar thermal engines, solar supplies just 1% of global electricity, wind 4%. And there’d be almost none if not for the ideological agenda forcing governments to massively subsidise them.

    These are my reasons. I expect many others have made a rational decision and decided the risks and possible rewards are not worth the costs.

    I hope this helps.

  10. My widower father was in his dotage living alone in a unit and I increasingly looked after his financial affairs, a major problem being doorknockers and charity collectors. When I opened an electricity account to deal with I was surprised to find he’d switched to dearer Green Power with Origin and I enquired as to how that came about. It was then he produced the ‘presents’ he’d got posted later via the nice young fellow knocking on his door. A nice blurb from Origin, a sower head and some CF globes and a miniature green Origin footy to go with the dearer power bill.

    So I’m straight on the phone to Origin to complain about sales staff preying on pensioners like that only to be told not to worry as the Green Power deal was off and all customers would be refunded anyway. Seems the Govt had knocked back their claim to Snowy Hydro being flogged as Green Power after Origin had been the winning tenderer in its privatisation.

  11. Somehow the dills in power think we don’t talk about these dodgy practices and scams among family and friends and how quickly the word gets around.

  12. If you read my submission http://www.greenpower.gov.au/Business-Centre/Program-Review/~/media/4488FFC5C5B04BACAEA881E393F33BB8.pdf or summary of recommendations http://www.greenpower.gov.au/Business-Centre/Program-Review/~/media/6DDD9A53908E49AA9BE6A0AE098154AA.pdf … on the Review of the GreenPower Program undertaken last year by UTS, you may appreciate the technical and legal issues associated with GreenPower and the simple fact that there is no legal framework that allocates the ‘renewable use’ attribute or the ‘reduced emissions’ attribute to those customers paying for GreenPower. Neither the Renewable Energy (Electricity) Act or the NGER framework transfers these attributes to a paying GreenPower customer. These attributes are shared across all grid customers. Consequently, the pricing structures for GreenPower are not fair. More customers understand this and it contributes to why the scheme is failing. GreenPower Marketing guidelines guide the customers to claim reduced emissions whilst those emissions are already allocated across all other customers under the NGER Framework and National Greenhouse Accounts Factors..

    • So “GreenPower pricing should be based around the cost of producing and delivering renewable electricity rather than as a penalty above standard electricity.”

      Well it’s like this. If you pay homeowners 54c/Kwhr for any unreliable leftover solar power they’re not using, when reliable baseload costs maybe 8c max, we’ll fall all over you to be green and squeal like stuck pigs should you want to take away all our compassion for saving the planet.

      What’s the real problem with green power pricing? It needs to be costed on the reliable base load it can always provide, just like thermal always was, but has now been bastardised by fickle renewables taking the cream off the top of all the milk. The only way to redress that is to enforce renewable generators to tender their power on the basis of the maximum base load power they can guarantee to the marketplace at all times. Naturally they’d have to partner deals with thermal power providers in order to do that and price accordingly.

  13. Encouraging “clean” electricity without capacity payments for “dirty” electricity is a recipe for disaster, because the “clean” variety tends to be AWOL during heatwaves. Who would build a new conventional generator when the govt is intent on shrinking its market?

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