Understanding How Network Exemptions Work for Embedded Networks

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Embedded Networks and Embedded Network Operators across Australia should understand the concept of a Network Exemption. Appling for an exemption through the Australian Energy Regulator (AER) may be required for your network to operate in a compliant fashion. Failure to obtain an individual Network Exemption for your network could result in substantial penalties, such as a civil penalty (fine) or revocation of the ability to hold an exemption. For your peace of mind, we have outlined the basic requirement of holding a Network Exemption.

AER Network Exemption Requirements

The National Electricity Rules (NER) are legally enforceable under the National Electricity Law (NEL). Under the NER, any party that engages in the distribution and/or transmission of electricity must either register with the Australian Energy Market Operator (AEMO) as a Network Service Provider (NSP) or obtain a Network Exemption through the AER to gain an individual exemption. This exemption means a party can distribute or transmit electrical services without becoming a NSP, and is known as a Network Exemption.

In most cases, Embedded Networks operate under an AER Network Exemption rather than going through AEMO to become a NSP. Each Network Exemption is site-specific and is granted to each Parent Meter connected to the National Electricity Market (NEM). Often, shopping centres and large buildings or developments have more than one Parent Meter to supply electricity to the entire property. Even if these Parent Meters are technically owned by the same Embedded Network, they must have separate Network Exemptions. This factor can make navigating retail exemptions particularly complex.

The Importance of Compliance with Network Exemption Rules for Embedded Networks

In March 2018 the AER issued a series of infringement notices to Embedded Networks that did not hold the required exemptions. These infringement notices were severe, carrying a penalty of $20,000 per site.

It is crucial for Embedded Networks to obtain individual exemptions for each Parent Meter in their network. Once obtained, Operators should pay careful attention to the conditions of the exemption. Following these requirements to the letter will help protect your network from a costly fine.

Apartment Buildings, Commercial Developments, Shopping Centres, Industrial Centres, Airports, and Caravan Parks are all examples of Embedded Networks that likely need to obtain Network Exemptions from the AER. If your Embedded Network does not have a Network Exemption, or if you aren’t sure whether you have an exemption or NSP status, contact ENM Solutions today. We have a proven process in place to apply for the Network Exemption quickly and effectively. We have helped many clients operating within the NEM to obtain their Network Exemptions without infringement notices.

If you already have a Network Exemption, we can audit your current practices to make sure you are meeting the conditions required by that exemption. One requirement included in these conditions is that you must appoint an Embedded Network Manager (ENM) for your network given certain criteria is met. ENM Solutions can serve that role for your network.

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