September 25, 2025
From 1 December 2017, Embedded Networks in the National Electricity Market (NEM) were required to appoint an accredited Embedded Network Manager (ENM) when a customer wishes to exercise their right to choose their own electricity provider. Embedded Network customers have the right to an authorised retailer of their choice.
Understanding just what this means requires us to take a step back and first be sure we have a detailed understanding of what an Embedded Network is, and how they operate.
An Embedded Network is a privately owned and operated embedded electricity network at a site that has multiple customers. The customers’ consumption is ‘consolidated’ to a single Parent connection with a Retailer in the National Electricity Market (NEM); and is used to purchase all electricity. The electricity is then ‘on-sold’ or ‘on-supplied’ to each of the customers at the site based on their measured consumption. This differs to the open market where the poles, wires and network are owned by public distribution companies and customers engage directly with a retailer to sell them energy. Here, all the ‘poles, wires and meters’ belong to private owners who are then privately supplying energy to those customers.
Embedded Networks are frequently found in Apartment Buildings, Commercial Buildings, Retirement Villages,Shopping Centres, Industrial Estates, Airports, Caravan Parks, Hotels and Resorts.
The purchasing of electricity through a single connection can reduce the ‘total cost’ of electricity at the site, through network efficiencies, metering consolidation and bulk purchasing. Once on-sold to customers, this reduced cost can result in a substantial ‘surplus’ of funds available to the site. The use of the surplus is generally determined by the Network Owner/s; however, uses may include reducing customer rates, reducing owner fees, purchasing electricity from renewable sources and investing in other initiatives – such as Solar (PV) Array and Battery Technology at the site.
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The Operator of the site, who may take the role of a Billing Agent, Retailer, Owners, or Strata Company, is called the Embedded Network Operator (ENO) and is responsible for providing the services associated with the on-selling of electricity at a site. The Owner of the Network may operate the site themselves, or they may appoint a representative. Electricity is on-sold by the ENO to all customers within the Embedded Network. Each customer has their own individual electricity meter, identified by a unique ‘meter number’, that is used to measure consumption periodically. The ENO then applies the electricity rates that have been set for the site to invoice customers. Read more about the difference between an ENO and an ENM here.
Having explored the basics of Embedded Networks, we can now explore what “Power of Choice” means for their customers.
Ultimately, any time you hear someone refer to the ‘power of choice’ or ‘power of choice reforms’, they are referring to a series of rule changes that occurred throughout the mid 2010’s resulting in improvements to consumer protections, choice and competition. Within our context, the Power of Choice refers to changes that enable embedded network customers within participating NEM jurisdictions to access the retail market, greatly increasing competition for these customers.
If you own or operate an embedded network, it’s likely that your customers/tenants have a right to choose who they buy their energy from and not locked in to purchasing this from the embedded network provider. With that established, we now go into how exactly that works and what you need to know.
The Australian Energy Market Commission’s (AEMC) National Electricity Amendment (Embedded Networks) Rule 2015 No.15 (Rule) created a new Australian Energy Market Operator (AEMO) accredited role called the Embedded Network Manager (ENM) that must be appointed to an Embedded Network given certain criteria is met. The ENM carries the responsibility of performing the market interface functions allowing Embedded Network customers to access retailers in the NEM.
Aside from the requirement to appoint an ENM, there are a range of supporting provisions that exist within the AER’s Network and Retail Exempt Guidelines outlining how Exempt Energy Providers must support customers in their right to choice and retain explicit informed consent with this in mind. This ranges from the required provision of AER Fact sheets to management of process that delays or inhibits choice, and an inability to rely on physical infrastructure limitations to prevent customer choice. Your ability to act when a customer has initiated this process is crucial as industry time frames exist for how long you have to respond, with an expectation you are ready and prepared to do so and civil penalty provisions in place supporting this process.
Your Embedded Network will be subject to an Exemption from the requirement to register as a distributor with the AER, and under that Exemption your network will be classified based on the type of activity you are conducting. For example, supplying to residential, commercial or large customers. As we have touched on, each exemption application carries different conditions that apply to it – these conditions vary based on your activity type (who you are selling/supplying to).
The early appointment of an ENM is a condition of exemption for the following applicable activity classes: ND10, NR1, NR2, NR3, NR5 and NR6 with equal to or greater than 30 customers, unless they are subject to a non-appointment or reversion entitlement.
Unsure if this applies to you? Reach out to our team and we can talk you through it.
Early appointment refers to the requirement to have an ENM ready to go from the moment you supply electricity, reflecting that these activity classes are more likely to contain customers that will benefit from or are likely to execute their power of choice. If you are unsure about whether your Embedded Network has the correct Exemptions in place, or requires an ENM, please reach out to our team today who can help provide you the relevant information to take any required next steps.
If an ENM is not appointed at an Embedded Network due to the size or type of customer, an ENM will still be required to be appointed if an ‘ENM Trigger Event’ occurs. An ‘ENM Trigger Event’ occurs when an Embedded Network customer, or their chosen retailer, provides notice that the customer wishes to access retail competition; a counteroffer by the EENSP is not accepted by the customer; and, the cooling off period for the market retail contract has expired. If all three elements transpire, an ENM must be appointed at the Embedded Network.
While some might have a limited view of what an Embedded Network Manager does, the reality is that your ENM is responsible for, and carries compliance obligations within the market as a participant. This includes maintaining critical information about your network and handling all market facing obligations as a result, including exposure to civil penalties and ongoing accreditation and market costs.
Unlike Exempt Providers, the ENM Function carries its own Service Level Procedures under the National Electricity Rules (NER), along with all market obligations and compliance risk for this market interaction. This will include retaining a single source of information about your network such as:
Your ENM must do these at a minimum and be able to act upon them and provide this information upon request by the market operator and Regulator. This places an ongoing responsibility on your ENM to monitor and update this information regularly, engaging with your site parent meter retailer to verify information and ensure accuracy.
ENM Solutions is an accredited Embedded Network Manager (ENM) with the Australian Energy Market Operator (AEMO). We were one of few participants accredited before 1 December 2017. Our unique offering as an ENM is that we do not offer billing or retail services, meaning we don't compete for your services or come in trying to take on other aspects of your network. Our role is not to encourage customers to choose a retailer, but to facilitate it should they make that choice.
We are a specialist in Embedded Networks and Independent Expert in the Embedded Network Manager function.
Our ENM service is unlike other providers. We don’t just meet the minimum requirements and leave it at that. The difference we bring as a specialist provider is that our team will:
Working with ENM Solutions is about bringing on an expert partner you can pick up the phone and call at a moment’s notice, ask about issues, ENO compliance, energy strategy for your site or support you with upcoming regulatory change that affects your network. We’re here to support you, deliver confidence and provide impartial advice, not push you one way or another to draw a profit from your metering, operations or other affiliated services.
If you would like to know more about any of the above, have more questions or would like to discuss what an ENM Solutions appointment at your Embedded Network would look like – please reach out to us today. Our experienced team are talking to ENO’s, owners and strata managers every day about their embedded networks, obligations and challenges, and are ready to help talk through any questions or concerns you may have.
