Different market positions
A leader in one market; a challenger in the other
While both countries are currently making important changes to the ways their markets operate, our ability to influence those changes differs between the two.
Important roles in each country
Given that our presence in New Zealand is very different from our presence in Australia, our approaches to achieving a fairer and healthier world in each market vary.
In Aotearoa we’re the largest generator of renewable energy, generating around a third of all the country’s energy from our hydro dams and wind farms. This position sees us advocating for changes that align with our purpose of clean energy for a fairer and healthier world. We’re fortunate in New Zealand to have a market that functions well and delivers good outcomes for consumers.
In Australia our market share is much smaller and we’re seen as a challenger brand. We provide conscientious consumers with the ability to offset the carbon emissions associated with their electricity and gas usage and innovative products that allow them to engage with their energy use, backed by 100% renewable generation and our participation in the Climate Active Carbon Neutral Standard (a scheme run by the Australian Government).
In New Zealand, the Climate Change Response (Zero Carbon) Amendment Act 2019 has enabled the establishment of an independent Climate Change Commission, emissions reduction targets for 2050, and rolling five-yearly budgets to track progress towards the targets. The Climate Change Response (Emissions Trading Reform) Amendment Act 2020 and related regulations help New Zealand to achieve its emissions reduction target by setting a cap on the volume of units auctioned under the ETS.
In Australia, while there’s still no bipartisan federal energy (and related carbon) policy, regulatory changes at state and federal levels are being implemented to improve retail customer outcomes.
Despite the prevalence of coal as a fuel in Australia, we remain confident that decarbonisation will continue and that we’ll see a further development of renewable assets as thermal generators retire in the coming decade and beyond. With the emergence of large-scale batteries, such as the battery we’re proposing for our existing Hume hydro power station in New South Wales, we expect a new era of firmed renewables to prevail in the medium to long term. The Australian market’s wholesale energy prices have reduced in the past few years due to a range of external factors. However, over time we expect to see demand for firmed renewables grow as thermal generation plant continues to retire at the end of its design life.
We advocate for clean energy in both markets, as well as competitive pricing for our customers. In addition to our participation in regulatory processes, we’re also members of a variety of organisations advocating on issues we care about. Details of these organisations can be found on page 123 of the Integrated Report 2020.
Three brands in two markets
Since 2013, we’ve operated three distinctive and well-established customer brands. Our Meridian brand appeals to customers looking for a renewable energy generator that’s deeply connected to the environment and New Zealand. In Australia, our Powershop brand focuses on sustainability, taking a challenger position against the country’s high reliance on coal. To support this position, Powershop was recognised as Australia’s greenest power company by Finder in 2020 and by Greenpeace for the third year in a row. Powershop in New Zealand offers customers personal control with its ‘shop’ proposition and attracts them with its appealing marketing.
While our Australian business represents 10% of our Group annual revenue and is a relatively small player in that market overall, it continues to grow rapidly as more and more Australian consumers look for cleaner options. In FY20, Powershop Australia’s white-label agreement with Kogan led to the launch of Kogan Energy, a mass-market offering that combines digital technology and low cost.
Our certified carbon-neutral retail gas product in the state of Victoria had 38,000 customer connections as at 30 June 2020, up from 23,000 the previous year, with customers who were either electricity customers and added gas, or new customers who signed up for dual fuel. While we’re committed to only renewable energy in New Zealand, the gas option is a clean alternative for our Australian customers who buy their power from a market that’s dominated by coal generation.