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How the Energy Industry Works in Australia

19th December 2012
David Goadby

David Goadby from Australian Power & Gas is an expert in energy efficiency, and helps Australians understand and adopt energy efficient practices. Australian Power and Gas is a gas and electricity supplier in Victoria, New South Wales and Queensland. You can follow David on LinkedIn

19th December 2012
Australian energy expert David Goadby explores the structure of the Australian energy industry

While we all use energy and electricity every day, there is limited knowledge as to how the energy industry in Australia operates, and what choices and powers the consumer has when it comes to their energy consumption.

While it can be easy to simply pay the energy bill you receive each month or quarter, knowing exactly what you are paying for and how you are being billed will make you a more informed consumer and help you understand how you use energy and exactly what charges that use incurs.

In Australia, there are three tiers to the Australian energy industry.

Energy generator
Australian energy generators are responsible for actually making the energy that runs our homes. This energy can be made from a number of sources, whether that be wind, sun or more commonly coal. The energy generator that will generate the energy for your home is fixed to your area, so as consumers you won’t have any say in which energy generator creates the energy you use. 

Energy distributor
Next, there is the energy distributor, who connects the energy from the energy generator to your homes. The energy generators are responsible for the poles, wires and pipes that deliver energy to our homes. They are also responsible for the energy meters. There will also be one assigned energy distributor to your area, so consumers do not have a choice in which company they use. The details of your energy distributor should be on your energy bill.

Energy retailer
The energy retailer buys energy on the consumers’ behalf from the energy distributor, and then sells it on. Consumers do have a say in which energy retailer they use, as there are generally a number of energy retailers servicing any one area. Different energy retailers will have different deals with the energy generator of the area, so it is worthwhile researching which retailer gives you the best deal in your area.

When you pay for your energy every month or quarter, you will receive your bill from the energy retailer.

Understanding this basic structure of the energy industry in Australia is useful in knowing where your energy is coming from, as well as in discerning whether you are getting the best price for the energy in your area. We all use electricity every day, so understanding how it is generated, distributed and sold on to you will help make you a better-informed customer.