How green is your power company?

Andy Cooper is educated and experienced when it comes to energy. He's also passionate about learning more.

So, he talks to the experts. He stays up late examining international protocols and commentary. He looks at competitors' claims and dives into the fine print.

Cooper is, he admits, obsessed. He loses sleep – "Hard out!" – because he’s that exasperated. He sweeps his long hair behind his ears and declares, "This is a world that's going to break your brain."

Cooper is chief customer officer at The Energy Collective where he helps run Electric Kiwi, a power company that has offered an independent alternative to the energy market’s giants since 2015.

As part of his role, Cooper has helped Electric Kiwi become a self-appointed "watchdog" of the electricity industry. He keeps an eye on his competitors and the language they use in their marketing.

More specifically, he watches what they're saying about how green their power credentials are. If any makes a claim they shouldn't, pretends to be environmentally friendly when they're not, or appears to be misleading customers with their marketing, Cooper will point it out.

Electric Kiwi has laid complaints about competitors’ practices with the Commerce Commission. It has also gone to the Advertising Standards Authority.

So, Consumer has come to the right place.

We've met with Cooper to find out just how rife greenwashing is in the power industry. We want to know if the claims by some companies about providing 100% renewable energy, or by others that profess their carbon-zero credentials, are true.

Cooper believes there's plenty of misdirection and misleading information in marketing claims made by the sector. "Some of the behaviour ... I don't think it's acceptable," he says.

He knows more than most about the sector, and who’s really making changes when it comes to decarbonising our electricity network.

And yet, he says, "I would not say I'm an expert."

If Cooper can't understand it, what hope does the average New Zealander have?

Can you choose a 'greener' power company?

"It's so complex," agrees Paul Fuge.

A self-confessed power "geek", Fuge runs Powerswitch, a 25-year Consumer-led project that’s helped hundreds of thousands of people save money on their power bills over that time.

Like Cooper, Fuge studies the industry relentlessly. He understands why consumers have so many questions, and why they shake their heads when he tries to explain how it works.

It’s just too complicated. "We don't expect people to know how our sewage system works or how the water system works or how our roading system works," he says.

That, says Fuge, is how power companies professing green credentials can sneak through the cracks. "It creates an opportunity for misinterpretation and misunderstanding.”

Fuge has an example. But to tell that story, he has to explain how New Zealand’s power generation system works.

New Zealand, he says, is among the best in the world when it comes to renewable energy sources.

Around 90% of our power comes from good places: wind, hydro, geothermal and solar. It’s the remaining 10% that’s the problem.

At peak times, when demand on New Zealand’s power grid is at its highest, power created using gas and coal – which is not environmentally friendly – is more likely to be used to help meet that demand.

That usually happens in the morning, when consumers get up for breakfast and showers, or in the evening, when they get home from work and turn on their ovens, dishwashers and heat pumps.

“In terms of the electricity you are using at those times, it all comes off the National Grid, which is a mixture of whatever's being generated at the time you consume it,” explains Fuge.

Power companies can't say all the power you buy from them and consume is renewable, says Fuge, because it’s all coming from the same place (the National Grid).

For example, at peak times, it’s more likely some of the power their customers consume has been generated by the Huntly Power Station, New Zealand’s largest power station, a gas and coal-burning plant and one of the least environmentally-friendly sources of New Zealand’s power.

But a power company’s individual fleet of power stations may be 100% renewable, say hydro dams or wind farms, geothermal, or solar, to generate its own power, which means its “100% renewable” claims are technically correct.

That is often what is being promoted.

"So, what they mean is, 'Our fleet of generation is all renewable'," says Fuge.

But this leads many customers to believe that all the power they consume is coming from renewable sources.

“It doesn't work like that,” says Fuge.

To compensate for emissions, power companies can buy carbon offset credits or purchase Renewable Energy Certificates (RECs) – but debate rages over whether these reliably reduce global emissions.

Many believe reducing carbon emissions is more powerful than offsetting them, says Cooper. “People need to be careful what they are buying,” he warns.

How green do customers want to be?

We don't know how many customers understand the discrepancies between what their power company says and how green the power is that’s coming into their home.

What we do know is that consumers are increasingly attempting to become as green as possible. They told us so in Consumer's Sentiment Tracker data.

In our January 2024 survey, 20% of respondents pointed to climate change as the most concerning issue facing New Zealand.

Another 11% said they'd changed their spending habits over the previous 3 months for sustainability or environmental reasons.

So, when Fuge is asked, "Which power company is the greenest?", his answer can surprise people.

"I tell people that, in New Zealand, it doesn't matter. It doesn't matter who you buy your power from [because] it all comes from the same place."

But that doesn't stop some companies from labelling their power supplies as greener than others.

Reading between the green lines

In 2019, Electric Kiwi decided it had had enough.

It laid a complaint with the Advertising Standards Authority alleging its much larger competitor Meridian Energy was "greenwashing" its power supply claims through two messages used on YouTube, Facebook, and in TV advertisements.

Meridian’s messages claimed, "Doing your bit for the environment just got easier,” and, “Switch to Meridian for power that doesn’t cost the earth.”

The authority decided those messages were misleading, and made Meridian change them. "The electricity customers buy from Meridian, or any other retailer, is all sourced from a 'pool', generated by both renewable and non-renewable methods. Therefore Meridian cannot make an environmental claim about its retail electricity product,” it was reported as saying in its decision.

But in a paid op-ed published in the NZ Herald, Meridian's CEO Neal Barclay fired back.

In doing so, he used the same example offered by Fuge.

"We stand by our claim that we only generate from 100% renewable resources," Barclay wrote.

As Fuge says, that doesn’t mean Meridian’s customers are getting 100% renewable power all the time – just that the power it is generating from its own sources is renewable.

Consumer wanted to know how widespread green claims were across New Zealand power companies. To do so, we studied the websites, read the descriptions, looked at the marketing, and dug into the fine print of as many electricity companies as we could find.

Cooper and Fuge are right: it’s confusing.

On Meridian’s website, the company claims it offers, “energy you can feel good about” and says, “we’re absolutely committed to generating electricity from 100% renewable resources”.

But Consumer could not find any admission from Meridian that the power its customers consume could include energy generated by coal.

When contacted for comment, a spokesperson said, “Meridian does not claim, on our website or anywhere else, to retail 100% renewable energy. The statement you have quoted … clearly refers to what we generate, which is 100% renewable.”

Another major provider, Mercury, includes a bee in its logo and offers a similar claim to customers, saying it supplies “energy made wonderful with 100% renewable generation”.

When asked if it admits anywhere that its power could come from Huntly, Lucie Drummond, Mercury’s executive general manager sustainability, said, “When we say 100% of the electricity we generate is renewable, that is a fact. We generate electricity from hydro, geothermal and wind sources, which all feed into the national grid … Having a small amount of thermal generation in the mix is critical for ensuring the lights stay on for consumers.”

Genesis was the only major power company Consumer could find that admitted on its website that its power sometimes came from non-renewable sources.

It said, “We use water efficiently at our hydro stations; provide backup generation for New Zealand using primarily gas with some coal at Huntly Power Station, potentially transitioning to locally sourced biomass as this industry develops, and within the next few years, we will add solar generation to our portfolio.”

Contact couldn’t be contacted for comment. On its website, it says: “We’re committed to a sustainable energy future for New Zealand. To us, this means balancing our commitment to renewable energy, while maintaining reliable access to energy for our customers. We’ve developed one of the most flexible generation fleets in New Zealand. Our geothermal, hydro and thermal plants have the country covered no matter what the weather is like.”

Doing the right thing

Power greenwashing is a topic that vexes Andrew Roddy, a marketer at independent power company Ecotricity.

Roddy believes Ecotricity does more than most. Like others, the company includes aspirational phrases on its website, offering consumers power that “turns back time”, while promoting “the cleanest, greenest electricity money can buy”.

It does this thanks to its Toitū climate positive certification, an internationally accredited carbon emissions management programme that asks companies to set science-based emissions reduction targets and offset the remainder by 125%. Ecotricity has calculated this so specifically it knows how much carbon is made by the nuts and bolts used in its turbines.

Ecotricity might be a small player, but Roddy believes the company is doing things right. Like Cooper, he shakes his head when he talks about the energy sector’s much larger competitors and some of the language they use.

“We don’t feel all companies are being genuine with a lot of the stuff they’re saying ... I am super conscious around how we communicate because if you do cross that line, it's hard to get that credibility back.”

But Cooper also questions whether Ecotricity’s efforts are the right way to go. “Ultimately it’s just a counting game that is unlikely to be causing any meaningful real-word reductions,” he says.

How can consumers fight their way through this minefield?

How to greenify your own power usage

You don't need to stay up late reading the small print in industry documents, like Andy Cooper. You also don't need to become a power geek, like Paul Fuge. Likewise, changing power companies may not make your own power consumption greener. Cooper and Fuge agree on that.

Instead, there's another, far simpler, method you can use to help decrease New Zealand's reliance on coal-fired power. You just need to change your habits.

That means changing how you use power. More specifically, it means avoiding using power at peak times.

Use energy-demanding appliances like your washing machine and dishwasher after 9pm. Charge your electric vehicle overnight too.

That’s where time-of-use plans – offering cheaper rates off-peak – can come in handy. If you can avoid using power at peak times, you’ll have a better chance at avoiding power generated at Huntly’s coal-powered plant.

Cooper says change is happening slowly. He can see a time when everyone has control of minute details of their power supply at home and can avoid using appliances at peak times by juggling them through an app on their phone.

In the meantime, to help educate its customers, Electric Kiwi has a tool on its website called the Green Metre that tells customers when the best and worst times of the day are to use power. It’s colour-coded so that off-peak power is greener, because it is. If you’re on the right plan, you can save money by switching to using power at off-peak times.

That, says Cooper, could be the key to real change. Once customers realise they can save money while decarbonising their power usage, he believes everyone will want to make the switch.

In the future, Cooper believes most of this will be automated, from when we charge our cars, to when the heat pump switches on and off.

“If you save a whole pile of money and reduce your carbon impacts, but you have to do [very little], that has got to be the best outcome,” he says.

Will we get there?

“Yes.”