An embedded network is a private utility network within multi-tenanted premises. The embedded network provider can purchase electricity for the precinct at wholesale rates and on-sell to tenants; however, not all consumers are convinced that this model works. Here, Andrew Perry, EnergyAustralia Executive – NextGen, discusses some of the common misconceptions around embedded networks.
Myth: Being part of an embedded network means paying more for power
In the past 6-12 months, there have been numerous regulatory changes implemented by the Australian Energy Regulator (AER) and Essential Services Commission Victoria (ESCV) to increase competition and consumer protections within the embedded network market.
Effective from 1 April 2018, these changes include the requirement for network exemption holders (or exempt distributors) to appoint or become an accredited Embedded Network Manager (ENM) to facilitate the exempt consumer’s access to retail market offers.
The implementation of the ENM role simplifies the process by which customers can go with the provider of their choice and ensures consistency in the embedded network industry.
The Embedded Networks Company is operating and managing numerous sites providing solutions that benefit residents — and we are improving the customer experience.
The Embedded Networks Company is a fully-owned subsidiary of EnergyAustralia and stems from our NextGen business that’s delivering products based on energy efficiency and providing customers with greater control.
Much of the frustration experienced by tenants has related to choice and access to competitive pricing.
Within our networks, residents have always been able to choose. Both owner occupiers and renters can choose to buy from another retailer, other than from their embedded network owner and operator, if they prefer. They have that flexibility. What we’ve found is they usually prefer to stay with us because we offer market competitive rates plus convenience.
Myth: Embedded networks don’t benefit all stakeholders
Embedded networks provide cheaper power for tenants but they also benefit owners, owners’ corporations and developers. The embedded network gives owners’ corporations access to cheaper bulk power for common areas – and enables buildings to provide centralised hot water, and even occasionally centralised air conditioning at bulk rates. The result is lower owners’ corporation costs and fees.
Apartments and individual premises are not encumbered with bulky air conditioning equipment and hot water services, which can take up valuable space. For developers, the benefits are infrastructure cost savings, end-to-end project management through the construction phase, and low-cost utility solutions to purchasers.
Embedded networks are the base technology for which energy efficiency technologies can be installed to enable improved green star ratings. Embedded networks are future-proofing technology, enabling sites to become micro-grids if they choose, potentially reducing their dependence on the grid. They can even become further integrated into the grid, supporting resilience of the national infrastructure through embedded generation, storage and load controlled devices.
Myth: The same protections for ‘normal’ electricity customers don’t apply to embedded network customers
From 1 July 2018, all embedded network consumers now have access to the Ombudsman schemes in each jurisdiction to provide a clearer process for complaints handling, additional protection of consumer rights or to seek independent advice and assistance.
We welcome the registration of embedded networks with Ombudsman schemes, which ensures the bar is now lifted in terms of choice and protections for consumers.
There may have been cases where energy retailers have not wanted to sell to a customer inside an embedded network. You can understand how tenants might find this a frustrating situation if they were unable to change providers.
If a customer is seeking to choose another provider, we make sure they check that their new provider can bill “energy only” tariff as advised by the Australian Energy Regulator. Depending on the retailer, the network charges may also be settled by an arrangement between ourselves and the new retail provider.