To the uninitiated, the Australian electricity industry is a mysterious world of complex terms and technical jargon. This can make it tough for the average consumer to decipher exactly what their prospective energy provider is offering.
We’re strong believers that comparing providers doesn’t have to be difficult. To make your life easier, we’ve put together a comprehensive glossary of some of the most frequently used terms you’re likely to come across when searching for a new power company.
Australian Energy Regulator (AER)
The Australian Energy Regulator is responsible for monitoring and enforcing compliance with the National Energy Retail Framework. Some of its duties include setting energy prices in certain markets (i.e. states/territories), providing market reports on the state of the industry, ensuring retailers abide by relevant legislation and more.
As the Australian Renewable Energy Agency explained, biomass is simply any organic material derived from plant or animal. This includes wood, oilseeds, algae and other matter left over from agricultural processes. Biomass helps reduce greenhouse gas emissions and is currently responsible for generating around 7 per cent of Australia’s renewable energy.
The Climate Council is an independent organisation providing valuable reports, data and insight into climate change and renewable energy.
Many state governments offer a range of electricity concessions to help low-income households deal with the cost of power. Eligibility varies between regions, and the exact amount of money you could be entitled to depends on your circumstances. Check out our state-specific pages for more information.
Deregulation is the ‘dismantling’ of energy price regulations. Generally, it results in more competitors being able to freely enter the market and prices being set by electricity companies rather than the government. This typically results in a greater choice of energy providers for consumers and cheaper electricity than might otherwise be the case. There’s been a definite trend toward deregulation in recent years, though some states are still strictly regulated.
As AER noted, distributors are the companies responsible for building and maintaining the infrastructure necessary for the distribution of electricity, including power lines and electricity poles.
Formed by naturally occurring processes, fossil fuels such as coal and gas have traditionally been Australia’s energy source of choice, thanks to the low costs involved with extracting them and converting them into usable electricity. According to Geoscience Australia, around 75 per cent of Australia’s domestic electricity is generated from coal.
Full retail competition
As the name suggests, full retail competition allows private companies to enter the electricity market and compete against one another. This effectively gives consumers greater choosing power and those who make use of energy provider comparison tools are often able to save on their utility bills.
Greenhouse gases are just some of the gases that make up our atmosphere here on Earth. It’s widely agreed that these gases are responsible for increasing the greenhouse effect – an ongoing phenomenon in which gases in the Earth’s atmosphere are gradually increasing the temperature of the planet. The Parliament of Australia explained that the most common greenhouse gases include water vapour, carbon dioxide, methane and nitrous oxide. Widespread reliance on carbon-based fuels is a significant contributor to the greenhouse effect.
The grid refers to the complex network of electricity infrastructure used to transmit power into your home. The vast majority of Australia relies on the grid for energy.
An inverter is a critical component of any solar energy system. It converts the direct current (DC) generated by a photovoltaic solar panel into alternating current (AC), which can then be used to power all your regular household appliances.
A kilowatt-hour is a unit of measurement equivalent to power usage of 1,000 watts over a 60-minute period.
An electricity meter is a way for both you and your energy provider to determine how much electricity your household has used over a certain timeframe. Traditional accumulation meters have some limitations and are unable to provide real-time data on your power usage. As a result, they are steadily getting phased out in favour of more modern and versatile models (see smart meters for more).
Megawatt hour (Mwh)
One megawatt hour is the equivalent of 1,000 kWh.
A lifestyle in which a person has decided to disconnect from the grid and generate their own electricity, typically using a solar energy set up. There are some significant up-front costs involved with living off grid, but users can often recoup their expenses over the lifetime of their system, though this does depend on the region, energy usage levels and a range of other factors.
Off-peak power is a specific time in the day when demand for energy is particularly low. Some energy retailers offer substantially cheaper electricity during these periods, and if you’re able to use most of your energy use within these hours, you may be able to reduce your power bill significantly. In most cases, you’ll need a smart meter to take advantage of off-peak electricity; check with your energy provider to see if you’re eligible.
Photovoltaic (PV) cell
Otherwise known as a cell, PV cells essentially convert sunlight into electricity. In recent years, the cost of PV technology has dropped significantly, and as a result, more and more households are starting to enjoy the benefits of solar energy. In fact, more than a million PV systems have been installed in homes across the country, according to figures collated by the Climate Council.
The amount your energy retailer charges you in exchange for providing you with electricity. Your tariff is comprised of both supply and usage charges, the exact amount of which depends on your energy usage and provider. Looking for a better tariff is a great reason to switch electricity suppliers.