Residential green energy market in Australia to 2010

This brief assesses the development of the green power market in Australia, covering the size of the market and take-up of accredited green power by state, including forecasts to 2010; competitor performance and offerings, and consumer attitudes and behaviours.

Report Highlights
The opportunity to purchase green power at no extra fee has been an growing factor in driving customers to switch to green power, followed by media coverage of climate change and information from retailers.

Only 30% of customers would be prepared to pay extra to switch to a green tariff, and the majority would only be willing to pay a 1-5% premium.

By June 2010, just under 12% of households in Australia are forecast to be on an accredited green power tariff, up from 9% as at the end of June 2008.
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DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
ANALYSIS 3
Demand for green energy continues to grow in Australia 3
Almost 750,000 customers were on green tariffs at the end of June 2008 3
Nine percent of Australian homes now on a green tariff 4
NSW and Victoria together account for over two-thirds of green energy customers 6
Consumers continue to prefer the cheaper options with lower shares of accredited green power 7
Competitor analysis shows increasing competition and fragmentation 9
Origin Energy leads the market, but TRUenergy made major strides in 2008 9
Prices vary significantly within the different accredited bands 13
Company profiles 15
ActewAGL 15
AGL 15
Alinta 16
ARK Climate (Australian CO2 Exchange) 16
Aurora Energy 16
Australian Power & Gas 16
Click Energy 16
Climate Friendly 16
Country Energy 17
COZero 17
Domayne 17
EnergyAustralia 17
Energy Pacific/Pacific Hydro 18
Ergon Energy 18
Global Green Plan 18
Integral Energy 18
Jackgreen 19
Momentum Energy 19
Origin Energy 20
Our Neighbourhood Energy 20
Qenergy 20
Red Energy 20
Simply Energy 21
Synergy 21
TRUenergy 22
Victoria Electricity 22
Viridor 23
Consumer attitudes to green power 24
Consumers are going green, but don't always know about accreditation 24
The opportunity to purchase green power at no extra charge to current rates remains a key driver 24
With few customers paying or willing to pay more than a 5% premium for green energy 26
Without all retailers offering green power at the same price as 'grey' power, the near-term potential could be 15% of households 29
Confusion remains a key barrier to green power take up as well as cost 30
Customers are prioritising alternative ways of helping the environment rather than sign up for green power 32
FORECASTS 35
Growth in customers to slow, but still over one million residential green power customers forecast by mid-2010 35
APPENDIX 39
Methodology 39
Definitions 39
Sources 39
Further reading 40
Ask the analyst 40
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Table 1: Growth in take-up of green energy began to taper in some states in late 2007 and early 2008 4
Table 2: Over thirteen percent of Victorian homes were on a green tariff by June 2008 5
Table 3: Share of green energy customers by State, 2004-2008 7
Table 4: Average share of green power purchased by residential consumers was 15.3% in the quarter ended June 2008 8
Table 5: Green energy customers by retailer, 2006-08 11
Table 6: Prices of green power products by company, 10% - 25% accredited 13
Table 7: Prices of green power products by company, 50% - 100% accredited 14
Table 8: Prices of green power products by company, block tariffs 15
Table 9: Over 40% of green customers are not sure if their power is accredited 24
Table 10: Key driver for sign up remains green power availability at no extra fee 26
Table 11: Few customers pay, or would pay, more than a 5% premium for green energy 26
Table 12: Willingness to pay extra for green energy declines with age 28
Table 13: The lower the annual electricity spend, the more willing respondents were to pay a small premium 28
Table 14: Western Australians the most willing to pay a premium for green power 29
Table 15: What are the main barriers to signing up for green energy? 31
Table 16: The barriers vary by age 32
Table 17: Recycling, energy efficiency and finding a green energy supplier at no extra cost are the highest environment-related activities for Australian households for the next 12 months 34
Table 18: Forecast growth in green power customers, 2008-10 37
Table 19: Forecast share of green power customers by state, 2008-10 38
Figure 1: Growth in take-up of green energy began to taper in some states in late 2007 and early 2008 3
Figure 2: Over thirteen percent of Victorian homes were on a green tariff by June 2008 5
Figure 3: Share of green energy customers by State, 2004-2008 6
Figure 4: Average share of green power purchased by residential consumers was 15.3% in the quarter ended June 2008 8
Figure 5: Share of residential green energy customers by retailer, June 2008 10
Figure 6: Green power tariffs offered by company by state and territory, 30 June 2008 12
Figure 7: Key driver for sign up remains green power availability at no extra fee 25
Figure 8: Few customers pay, or would pay, more than a 5% premium for green energy 27
Figure 9: What is the potential for green energy? 30
Figure 10: What are the main barriers to signing up for green energy? 31
Figure 11: Recycling, energy efficiency and finding a green energy supplier at no extra cost are the highest environment-related activities for Australian households for the next 12 months 33
Figure 12: By mid-2010 Australia is predicted to have over one million residential customers on accredited green power schemes 36
Figure 13: Victoria to maintain highest share of customers on accredited green tariffs through to mid-2010 37
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