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RUBY:

From Schwartz Media, I’m RJ - this is 7am.

Powershop was one of Australia’s fastest growing energy companies. It’s investments in renewables and political advocacy for climate change action made it one of the most popular electricity providers in the country.

But in a shock announcement to its customers Powershop revealed it had been sold - to one of the world’s biggest polluters.

Today, national correspondent for The Saturday Paper Mike Seccombe on the sale of Powershop, and what it tells us about the future of green energy in Australia.

It’s Tuesday, November 30.

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RUBY:

Mike, this story is about Powershop, which is this electricity and gas company that is a bit of an anomaly, its customers actually seem to be quite loyal to it or they did until recently. So, why is it that people connect with PowerShop?

MIKE:

It has to do with Powershop’s business model which at the time was, I think, close to unique.

Archival tape -- Powershop NZ ad

“The idea behind Powershop is ridiculously simple.”

MIKE:

So, the story is Powershop started as a New Zealand based electricity retailer before launching in Australia a little less than 10 years ago.

Archival tape -- Powershop NZ ad

“The power business needed a proper revolution. And that's where we come in.”

MIKE:

And it pitched itself as an alternative to the traditional dirty three big power companies AGL, Origin and Energy Australia.

By promising to invest only in renewable energy and by taking a political stand against the federal government's environmental policies, particularly their attempts to weaken the renewable energy target.

And this ended up being a very smart commercial strategy as well because Powershop now has about 170,000 customers and they're very loyal.

Archival tape -- Powershop AUS ad

“We need to use electricity. But we don't need to kill our planet in the process.”

MIKE:

And a big chunk of these customers joined up precisely because of the way Powershop positions itself as a greener, cleaner alternative.

You know, its electricity is 100 percent renewable, and its gas supplies, which it went into a few years later, are all covered by credible government-accredited offsets. And it also has a lot to do with the partnerships that it struck with some of Australia's biggest progressive organisations. Organisations like GetUp, for example.

RUBY:

Okay, so you've got this environmentally responsible electricity company partnering with progressive groups like the activist group GetUp. So, how does that alliance play out for both of them?

MIKE:

Well, GetUp advocates for a number of different progressive issues, you know, including economic equality and climate action.

And in 2014, GetUp entered this partnership with Powershop, where GetUp committed to directing its supporters to change their electricity supplier to Powershop, and the power company in return promised that it would contribute money to getups climate campaigning.

Archival tape -- Powershop AUS ad

“I think it’s great that GetUp! Is encouraging Australians to take the renewable energy target into our own hands.”

MIKE:

So this was called the Better Power Campaign.

Archival tape -- Powershop AUS ad

“Switch to an energy company that supports the renewable energy target in both words and deeds.”

MIKE:

And it effectively involved GetUp making ads for Powershop and also putting a button on its website, where members could go to easily sign up to Powershop.

And it worked. Somewhere between 15 and 20,000 people, probably closer to the higher end, I think, according to some things I've read, switched over as a result of this campaign. And so that was good news for Powershop. There was also good news for GetUp because they received commissions for every one of their members who signed up. And so GetUp got commissions totalling around $2 million, which is a pretty good chunk of change.

RUBY:

It is. It sounds like both Powershop and GetUp did pretty well from the partnership.

MIKE:

Well, yeah, indeed. It was a very happy marriage, at least until last week when there was a sudden divorce. And that's because news broke that Powershop was being sold to one of the biggest oil and gas companies in the world.

RUBY:

So tell me more about that, Mike, about who bought Powershop?

MIKE:

It was bought by Shell, global oil and gas giant, as part of a consortium with an infrastructure fund called the Infrastructure Capital Group. They acquired Powershop from its parent company, New Zealand based Meridian Energy, for $729 million.

And after that announcement, things got very ugly between Powershop and its one time partner GetUp.

RUBY:

I can imagine so. What happened?

Archival tape -- Katherine MacCallum

“Supporting a big climate polluter is not what our members signed up for.”

MIKE:

Well, the day after the deal was announced, GetUp released a statement making very clear that it felt betrayed.

Archival tape -- Katherine MacCallum

“I'm Katherine MacCallum, I'm the Climate Justice Campaign director at GetUp.

So, we found about the sale with no notice. We didn't know that it was coming, so we were a little shocked.”

MIKE:

They claimed credit for mobilising tens of thousands of people to switch to Powershop and said that the acquisition by Shell would impact all their customers.

Archival tape -- Katherine MacCallum

“Under Shell's ownership, Powershop has become the very cooperation that many of our members and other customers were trying to move away from.”

MIKE:

They described Shell as one of the worst climate polluters in the world.

Archival tape -- Katherine MacCallum

“​​So as of this morning, 4,382 members have told us that they are switching or they plan to switch, and 2,634 of them have already written in to Powershop’s complaint desk.”

MIKE:

And it wasn't just GetUp, I might add. There are a number of other deals I tried to find out from Powershop how many similar deals there were, but there were a number of other deals with other civil society groups.
Environment Victoria, for example, another NGO, had an arrangement with Powershop whereby it would do a similar thing - encourage its supporters to switch to them in return for commissions. And I think they got about $50,000 or something like that. So not nearly as big as GetUp, but still, you know, not insubstantial. And now they're going to tell their supporters to dump Powershop and to go elsewhere.

And it seems entirely likely from what I gather from talking to people in the, you know, civil society world that a bunch of other organisations will likely follow.

RUBY:

OK, so we have this company Powershop, which builds its reputation as a green electricity retailer and as part of that, it partners with environmental organisations, which expands its customer base. Then it’s sold to one of the biggest fossil fuel companies in the world. So, why would Powershop make that deal? Actually, that they would know that a sale like that would affect their reputation and their customer base?

MIKE:

Well, you would think so, wouldn't you? So it's a great question.

The main factor here has to be money, right? For the parent company.

You know, Meridian isn't a private company. You know, it's not some greenie who's set this up. It's a listed company. It's obliged to consider the interests of its shareholders, and the offer to buy was very generous. You know, they were offering very good money. So, you know, obviously they decided to go with the cash.
And the media release that announced the sale said that Shell was quote, “assembling the building blocks of a clean energy business”.

So it seems like the company is trying to position this acquisition as part of a broader attempt to pivot to being more renewably focussed.

But Shell's history as one of the biggest polluters in the world means there's quite a lot of doubt and scepticism out there about what Shell's plans are exactly.

RUBY:

We’ll be back after this.

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RUBY:

Mike, we know that Shell is one of the biggest oil and gas companies in the world, and that fact alone makes the sale of Powershop jarring. You've said that it's historically one of the world's biggest polluters, but how bad is the company right now when it comes to taking action on climate change or attempting to mitigate any of its environmental impacts?

MIKE:

So, Shell is a massive polluter.

Archival tape -- Reporter

“They are single handedly responsible for 1.7 percent of all greenhouse gas emissions by human activity since 1988.”

MIKE:

And historically it's been one of the biggest corporate blockers of climate change action.

Archival tape -- Reporter

Shell has been lobbying against global warming since the early ‘90s. Shell was part of the Global Climate Coalition until 1998.”

MIKE:

It has notoriously spent decades funding climate change denial groups, lobbying politicians to delay action on climate change.

Archival tape -- Reporter

“The organisation lobbied against a scientific consensus on climate change and tried to stop governmental action.”

MIKE:

You know, for example, at the moment Shell is fighting against a Dutch court ruling.

Archival tape -- Reporter

“In a milestone for environmental activism, Anglo-Dutch energy giant Shell has been ordered by a Dutch court to reduce its carbon emissions by net 45 percent by 2030.”

MIKE:

Which found that their current activities threaten the quote “right to life” and ordered them to pursue far more ambitious cuts to their emissions than they have in train at the moment. And Shell is appealing that.
It recently claimed a goal of achieving net zero by 2050.

Archival tape --Shell on climate change

“What we are doing today is setting out a vision on how we as a company are going to make a contribution to solving that challenge in a very purposeful and a very profitable way....”

MIKE:

But many environmentalists and scientists are very sceptical about the way it plans to do it.

Archival tape --- Shell on climate change

"We aim to offset around 120 million tons of annual Scope three emissions by 2030. We also believe the world needs to use technology to mitigate emissions. So we want to have built an additional 25 million tonnes a year of carbon capture and storage by 2035."

MIKE:

A significant part of Shell's global plan involves offsetting 120 million tonnes of carbon emissions per year by planting trees, reforestation, and otherwise naturally sequestering carbon.

According to one study that was mentioned to me done a few years ago, when Shell announced that it was planning to offset all of its global emissions by natural means, it would have to plant an improbably large number of trees to achieve the desired result. By that estimate, it would take something like 40 percent of all the arable land on Earth to be planted with trees to offset the emissions. That's pretty outlandish.

RUBY:

Ok so historically Shell has a pretty bad track record on environmental issues, but could you look at this acquisition another way? Could you see the fact that Shell is now buying one of the greenest electricity retailers in Australia as a sign that perhaps the company is seeking to change?

MIKE:

Well, yes, you could, and I think that's a fair point. You could argue that. And that the people who are upset by the Shell takeover of Powershop should instead be happy to see a major fossil fuel company, you know, taking at least some small moves to clean up its act.

And Shell is a big company with a lot of money and so is its partner. So, you know, if they use the acquisition of Powershop to build more renewable infrastructure and continue to eat into the customer base of, you know, the other dirtier energy companies, that could be a net win.

And it does reflect a broader goal of the company, as I mentioned, to get to net-zero and also to be, they announced in 2019, “the biggest electricity supplier in the world by the mid-2030s”. You know, which is a big goal and I must say, you know, a bit of a goal borne of necessity, frankly, because Shell's traditional business, oil and gas, isn't going to have a future if the world is serious about, you know, avoiding catastrophic climate change.

So yes, they're talking a big game. It's just not clear to a lot of people that they're actually going to go through with it.

RUBY:

So, where do you land then on whether this acquisition is a good thing, is it realistic to think that a company like Shell would be leaning away from fossil fuels towards renewables in any sort of large scale way?

MIKE:

Well, I'm a bit each way, I must say, but I'm mostly cynical. Because, you know, in the context of Shell's global portfolio, Powershop is really immaterial. It's a tiny part of the company's portfolio. You know, it's not enough to affect a trend that Shell is stepping back from fossil fuels. And instead, it looks like they're actually investing in renewables because it's smart business while still pursuing, you know, the fossil fuel strategy. It smacks a bit of greenwashing.

So, no doubt it's a good thing for fossil fuel companies to go into renewables, but that has to be instead of their other activities rather than being as well as their other activities. And there's no real sign at this stage that Shell has any intention of significantly winding back the fossil fuel side of its business.

Instead, we've ended up with the takeover of a green power company, which is likely to see many of its customers leave because they don't want their money going into the dirty pockets of one of the world's largest polluters.

On the upside, there is an upside here, that there's now a proliferation of new entrants into the Australian electricity market. The number of players has more than doubled in the past five years, and some of them are offering clean energy. Just like Powershop, and Greenpeace is now in the final stages of assessing these various offerings. Last time they did it back in 2017, Powershop finished at top spot. I can tell you what, it's not going to this time.

But the point here is that come January, this analysis will drop and all those people who are looking to leave Powershop or for that matter, looking to leave any of the dirty energy companies will have a pretty clear guide as to where they might direct their customers in the future.

RUBY:

Mike, thank you so much for your time.

MIKE:

Thank you.

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RUBY:

Also in the news today,

Officials have detected three confirmed cases of the new Omicron COVID-19 variant in NSW and the Northern Territory, and are investigating a number of other international arrivals.

All three confirmed cases are confirmed travellers who are in isolation.

And federal Health Minister Greg Hunt announced on Monday that Australia’s expert immunisation panel will review the recommended timing for people to receive their COVID-19 booster dose in light of the new variant.

Hunt called for calm and insisted Australia was well placed to deal with the new variant should it spread in the community.

I’m Ruby Jones, this is 7am, see you tomorrow.

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