Embedded electricity networks

Embedded networks are private electricity networks that serve multiple premises, such as in apartment blocks, caravan parks and shopping centres.

The owner of the site with an embedded network runs the network infrastructure. In most cases, owners also buy energy from an energy retailer and on-sell it to the occupants of the site.

This page explains the rules governing the operation of these networks, including recent changes that allow customers to access electricity retailers directly if they choose to do so.

Licensing requirements

If you own, operate or control a private embedded network, you need the necessary permissions to supply and sell electricity to occupants.

Network exemptions

Embedded network operators must obtain an exemption from the requirement to register as a network service provider with the Australian Energy Market Operator (AEMO).

Retail exemptions

If you also sell electricity within your network, you must apply to the Australian Energy Regulator (AER) for an exemption from the requirement to hold a retailer authorisation, unless in a deemed class. The AER exempt selling (retail) guideline details the types of exemptions available and the application procedures.

Customer access to energy retailers

Users of your embedded network can choose to buy electricity from you or from an authorised retailer.

These new customer access rules came into effect on 1 December 2017. Owners or operators of embedded networks have until 31 March 2018 to comply with the new requirements, explained below.

Appointing, or becoming, an embedded network manager (ENM)

Only some embedded network operators are required to appoint an embedded network manager (ENM) by 31 March 2018. Others are permitted to delay the appointment of an ENM until a resident or tenant enters into a contract with an energy retailer and the 10-day cooling off period has lapsed.

The role of the ENM is to help customers in your embedded network access energy offers from electricity retailers. They will, for example, allocate National Metering Identifiers to customers and help in the settlement of bills.

  • Visit the Australian Energy Market Operator (AEMO) for information on the accreditation process and a list of accredited ENMs (view the document entitled: National electricity market accredited embedded network managers).

Metering requirements

All meters installed after 1 January 2012 should be National Electricity Market (NEM) compliant.

Customers wanting to buy electricity from a retailer need an NEM-compliant meter.

If the meter is compliant, the retailer or the customer can either:

  • purchase or lease the meter from you
  • replace the meter with a meter of their choice.

If the meter isn't compliant, it will need to be replaced.

  • You will have to pay for a replacement if the non-compliant meter was installed on or after 1 January 2012.
  • The retailer or customer will have to pay if it was installed before 1 January 2012.

Network charges

You are allowed to recover your network costs (i.e. cost charged to you by your retailer for supplying electricity from the grid to the site) from your occupants, even if they have chosen to purchase their energy from another supplier. The AER's Network service provider registration exemption guideline explains the requirements for network service charges.

Calculating electricity charges for customers

What you can charge customers for their electricity is regulated by various state laws.

The Manufactured Homes (Residential Parks) Act 2003 applies to owners/managers of residential parks who on-supply electricity to manufactured home owners.

The Residential Tenancies and Rooming Accommodation Act 2008 applies to general tenancies as well as tenancy agreements for caravans, caravan sites, houseboats and rented manufactured homes.

The Body Corporate and Community Management Regulation 2008 applies to body corporates who on-supply electricity to home owners.

Electricity asset ownership dividend

The government is providing residential customers, including those in embedded networks, with a $50 per year rebate over the next 2 years ($100 in total).

You will need to contact your electricity retailer to notify them of the number of households within your network.

Your retailer will then provide you with a bulk credit (i.e. $50 x number of households) on your bill that covers 30 April 2018. You must then pass on the $50 credit to your customers on their next bill. Failure to do this is a breach of retail exemption conditions with the Australian Energy Regulator.

Also consider…

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