When it comes to electricity, you have options.
Changes driven by technology, environmental factors and consumer behaviour are giving Aussies more choice than ever with their electricity supply.
Today, you may be able to choose between non-renewable sources like coal and gas, renewable energy sources like solar, hydro and wind, or a mixture of both.
We’ll explain how each method works, and how it relates to your household bill!
How is electricity generated?
According to the Department of Industry, Science, Energy and Resources, 79% of Australia’s electricity is generated from non-renewable fossil fuels – coal and gas.1 Non-renewable means these sources are finite.
Conversely, renewable energy sources like solar, hydropower and wind account for the remaining 21%. These are unlimited resources that come from nature and are more environmentally friendly than non-renewable sources.
Power stations burn coal to produce steam, which spins turbines and creates electricity. The power stations connect to an electrical grid which distributes electricity out to our homes via powerlines. Large coal power stations are the most common source of electricity in Australia and have the capacity to power hundreds of thousands of homes.
Delivered through pipelines from gas fields located all over the country, natural gas is abundant in Australia. Like coal, natural gas is burned to produce steam and spin a turbine that generates electricity. One of the cheapest sources of electricity, natural gas is the cleanest fossil fuel.
According to the Department of Industry, Science, Energy and Resources, as of August 2020, there are around 2.53 million rooftop solar power systems, over 100 hydroelectric power stations and over 90 wind farms in Australia.2 The beauty of renewable energy is the fuel source is free, easily replenished and more environmentally friendly.
Which source of electricity is best for you?
While there’s no one-size-all best electricity option, there are sources of electricity that may appeal to you over others.
- Non-renewable. Electricity derived from coal is one of the cheapest sources of electricity, but it’s leaves the largest carbon footprint. Natural gas is the cleanest non-renewable option. However, it’s not available to all households.
- Renewable. You can put solar panels on your roof; they’re eco-friendly, low maintenance, offer feed-in tariffs and long-term savings on your energy bills. On the negative side, they incur upfront installation costs. Additionally, selected Australian states allow you to buy Greenpower, a government initiative that produces electricity via renewable sources like hydropower and wind. While more expensive than non-renewable sources, innovation is likely to drop Greenpower prices in years to come.
Keep in mind, regardless of whether you choose non-renewable or renewable energy, all electricity produced ends up in the grid. The cool part is choosing renewable energy, adds cleaner electricity into the grid on your behalf and increases the proportion of renewable energy produced and consumed.
What’s the cheapest source of electricity for Aussie households?
If you can afford the upfront costs, solar has the potential to save you money long-term, plus you may be eligible for a solar rebate and a solar feed-in tariff. Currently, Greenpower costs a premium and is probably the most expensive. At present, most traditional electricity plans utilise coal-powered electricity and tend to be cheaper than electricity sourced from renewable generation.
When’s the last time you shopped around for a cheaper bill? The cost of electricity will vary from provider to provider, compare energy providers to start your search for a plan for your household.
Frequently asked questions
Compare electricity and gas today
In conjunction with the savings tips above, one thing you can do straight away is compare your energy plan against others. It’s a five-minute exercise that’ll help you figure out if you’re overpaying.
Our service can help you do just that; plus, it’s completely unbiased. We present options to you in order of price, and let you explore the details of each plan on your terms.
So, what are you waiting for? Compare now!