Compliance is no longer a “nice to have” in today’s complex energy landscape. It is a fundamental requirement for the effective operation of embedded networks. For network owners, operators, property developers, and strata managers, staying ahead of regulatory obligations is increasingly critical as reforms continue, exemption conditions evolve, and oversight by the Australian Energy Regulator (AER) intensifies.
At ENM Solutions, we see firsthand how proactive regulatory management not only reduces risk but also supports operational stability and protects customers across embedded networks.
Embedded networks operate within a detailed regulatory framework, encompassing the National Electricity Rules, National Electricity Retail Law, Retail and Network Exemption guidelines set by the AER. Failure to meet these obligations can result in penalties, operational disruption or the need to fundamentally change how a network is structured or managed.
The regulatory environment has shifted significantly since the original exemption frameworks were introduced. As energy markets evolve and embedded networks become more widespread, regulators have strengthened their approach to ensure customers within these networks receive protections available to traditional (non-embedded network) customers in the energy retail space. Consumer safeguards and compliance expectations continue to evolve, and embedded network stakeholders must be ready to respond.
Recent updates to the AER’s Network Exemption Guideline (Version 7) and Retail Exemption Guideline (Version 7) represent some of the most significant changes in this space. These revisions affect both new and existing embedded networks and reinforce the importance of staying on top of regulatory developments.
Key changes include the closure of certain deemed exemption classes, requiring some embedded networks to move to registrable exemptions. Communication and notification requirements have also been strengthened, with mandatory reporting to the AER within defined timeframes now expected. In addition, customer protections have been expanded, including obligations relating to hardship policies and family violence considerations for retail selling within embedded networks.
Together, these changes signal a clear regulatory direction: increased oversight, greater transparency and closer alignment between embedded network operations and national consumer protection standards.
Further refinements are also on the horizon. Draft decisions and proposed amendments, including those outlined in the AER’s March 2025 embedded networks review, point to continued enhancements in reporting requirements, exemption conditions and customer safeguards. These developments are important for all embedded network stakeholders to monitor closely.
Regulatory updates are not limited to electricity. A recent example is the Victorian Government’s Gas Embedded Networks General Exemption Order 2025, which introduces new obligations for gas embedded network operators. These include participation in Energy and Water Ombudsman schemes, enhanced customer information requirements and compliance with the Gas Distribution Code of Practice.
This highlights the need for embedded network operators to track both national and state-based regulatory developments, as compliance obligations can vary by jurisdiction and energy type.
With regulatory complexity continuing to increase, compliance plays a central role in any embedded network strategy.
First, it supports customer protection. As embedded networks expand across residential, commercial and mixed-use developments, regulators are reinforcing safeguards to ensure customers are treated fairly, have transparency around pricing and retain rights such as access to authorised retailers.
Second, it protects project viability. Networks that fall behind regulatory requirements risk enforcement action or may face limitations in how they operate or participate in future market arrangements. Staying informed allows owners and operators to make sound decisions around metering, infrastructure and service models, reducing the likelihood of costly remediation or disruption.
Finally, strong regulatory governance builds confidence among stakeholders. Investors, tenants, owners corporations and strata managers all benefit from knowing that a network is compliant today and adaptable to future regulatory change.
Keeping pace with regulatory change requires more than monitoring updates in isolation. At ENM Solutions, we support clients with a proactive and practical approach to regulatory compliance. As an authorised Embedded Network Manager recognised by the Australian Energy Market Operator, we help translate complex regulatory requirements into operationally sound outcomes.
Our team assists with meeting exemption conditions, managing reporting and notification obligations, communicating regulatory changes to customers and preparing networks for future reforms. Our approach is independent, data-driven and grounded in a deep understanding of the regulatory frameworks governing embedded networks.
As energy markets continue to evolve in response to policy change, customer expectations and new technologies, regulatory updates will remain a constant. For embedded network owners and operators, maintaining compliance is not a one-off task, but an ongoing investment in operational resilience and long-term success.
By staying informed and working with experienced industry partners, complex regulatory requirements can be managed effectively. With the right support, compliance becomes not just an obligation, but a foundation for stronger outcomes for both networks and their customers.
