Understanding the Australian Energy Industry

The energy industry in Australia can be difficult to understand – and if you’re building a house, moving home or are confused about different deals from different energy retailers, you’re probably scratching your head wondering how the system works.

In Australia, there are essentially three tiers to the energy industry, and the energy supply process goes deeper than just the name of the company on your gas or electricity bill. Here’s a breakdown of the three types of companies involved, and some useful information about how your home gets its gas or electricity.

 Energy generator

The first type of company involved is the energy generator. These companies are responsible for the actual generation of energy – whether that’s from coal, the sun or wind. The energy generators that are responsible for generating the energy that you will use are fixed to your area, so you won’t have any say in which energy generator creates the energy for your home.

Energy distributor

Energy distributors are companies that are responsible for taking the energy produced by the generators and distributing it to our homes. They own and manage the poles, wires and pipes that deliver electricity and gas to our houses, and also the meters that measures your consumption. Just like the energy generator that is assigned to your area is fixed, so too is your energy distributor. We have no say in which energy distributor delivers, our energy.

Energy retailer

Energy retailers are responsible for buying electricity and gas from the generators and selling it to us. There are a number of energy retailers that you can choose from. This is why it is worthwhile taking some time to find the energy retailer with the best deal for you.  Energy retailers also differ from state to state, so if you’re looking for energy suppliers, Victoria residents will have a different selection to choose from than residents in New South Wales.

When it comes to choosing your energy retailer, there are a number of things that will influence the price and therefore should be taken into consideration. Energy retailers’ offers differ in terms of price, (length of the contract from fixed term to rolling contracts, and penalties applicable for leaving fixed term contracts early) so you will need to pick a contract and pricing system that suits your current situation – which is likely to differ if you are renting as opposed to own your own home.

The most important thing to know about the Australian energy system is that while you cannot choose the energy generator or distributor that services your home, you can choose the energy retailer and match the price and plan to your individual or family circumstances.

 Author Bio: David Goadby from Australian Power & Gas offers simple tips to help Australians choose the right energy retailer and plan for their needs. Australian Power and & Gas is a home energy retailer committed to giving Victoria, New South Wales and Queensland residents a Better Deal than the big incumbent retailers – the Big Guys – and ensuring customers get award-winning customer service from a 100% Australian-based team.