Victorian Embedded Networks Review Complete

An end to new residential embedded electricity networks – but with a renewable energy exemption – and reform of existing networks are a step closer in Victoria.

What Is An Embedded Network?

An embedded network is a private electricity network servicing multiple end-consumer premises – such as in an apartment building. The site owner operates the infrastructure and sells electricity to tenants and/or residents in the building. As well as apartment buildings, embedded networks can be found in caravan parks, retirement villages, social housing and shopping centres.

While all Australian energy consumers have protections and rights, they can be different if the electricity is purchased from an embedded network as the operator is often classified as an “exempt seller”. This means there is no requirement to be authorised by the Australian Energy Regulator as an energy retailer.

Customers within an embedded network don’t always have the opportunity to choose to purchase electricity from an authorised energy retailer instead of the operator, or access to retailer offers may be limited.

More than 140,000 Victorians live in buildings with residential embedded networks.

“We want to ensure that Victorians living in new and existing residential embedded networks can get access to the same competitive retail offers and consumer protections that other people have,” said Minister for Energy, Environment and Climate Change Lily D’Ambrosio. “That’s why we promised to act to ban these networks in new apartment blocks, which too often lock in high costs.”

A part of the pathway towards the Andrews Government’s desired ban from 1 January 2023 was a review by a panel of energy market and consumer advocacy experts; and their final report was released on Friday.

Renewable Energy Exemption

One of the Panel’s recommendations is an exemption from the ban where an operator can demonstrate 50 per cent or more of a site’s electricity consumption is met by on‑site low-cost renewable energy from solar power, energy storage and other systems. Importantly, the operator must also show the benefits are passed on to  customers.

However, the Panel also recognised it may be difficult for some sites to install enough renewables to meet this threshold. In these instances and assuming as much renewable energy capacity has been installed as possible, it may be met with market purchases such as GreenPower or Power Purchase Agreements (PPAs).

This exemption would also support the Victorian government’s efforts in encouraging renewable energy uptake as part of its approach to carbon emissions reduction.

You can access the Embedded Networks Review – Final Recommendations Report here.

Should the Panel’s recommendation be accepted, it could provide a boost for local company Allume Energy, the makers of SolShare. The multi-award winning device enables the output of a single rooftop solar system to be optimally shared between separately metered apartments or units.

What’s Next

The Victorian Government will consider the panel’s final report and respond by the middle of this year. Any reforms to embedded networks would add to others already put in place by the Andrews Government, including the Victorian Default Offer, a ban on door-to-door sales (including some solar door-to-door activity) and cold calling, and increased penalties for dodgy electricity retailers.

On a related note; door-to-door solar sales haven’t just been problematic in Victoria. It’s important to know your rights; or better still, avoid buying a solar power system this way. Learn about the right way to buy solar.