Banning Embedded Networks in VIC: Draft Recommendations

August 11, 2021


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The Victorian Department of Environment, Land, Water and Planning (DELWP) concluded their consultation on the Review of Embedded Networks in Victoria on Friday 6th August. Following release of the panel's Draft Report and Recommendations for Implementation of a Ban of Embedded Networks in Victoria, ENM Solutions has submitted a detailed response in support of the best outcome for our Embedded Network Operators and their customers.

This review followed a Victorian Government Election Commitment to Ban Embedded Networks in New Residential Apartment buildings, with appropriate exemptions for Microgrids and those utilising Clean and Renewable Energy Technologies. Many of the submissions from Industry were based on this position and provided advice and feedback based upon the questions put forward pertaining to this by the Panel. Following the initial consultation however, the Panel has made the recommendation to extend this ban to all legacy Embedded Networks, with exemptions for those using Clean and Renewable Energy Technology and removing the burden to meet a Microgrid category. What would classify as Clean or Renewably Energy Technology or what measure would be used to ensure a consumer benefit is being received, is still in discussion.

The path forward pertaining to this proposed implementation would be the amendment of the General Exemption Order (GEO), requiring all Residential Embedded Networks to apply to the Essential Services Commission (ESC) for an exemption that requires great consumer protections mirroring those of on-market customers and becoming a member of the Energy and Water Ombudsman Victoria (EWOV). This would also include a requirement for legacy networks to install Renewable or Clean Energy technologies within three years of their application. Notably, the Panel has recommended that the Government consider including other types of networks, including Commercial, Industrial, Caravan and Business Parks, to these reforms. Supporting this Exemptions process, the introduction of a Local Energy Service (LES) license has been recommended to be eligible to supply and sell into these sites. Embedded Networks will be given three years from the introduction of the amended GEO to apply for a LES license at which point the exemptions under the GEO will be transitioned into the requirement to hold a LES Licence.

As part of this transition the Panel has proposed all customers within Embedded Networks should be able to materially access on-market offers, without barrier. This would include significant upgrades to metering within the industry, particularly for those established before November 2017. No path forward has yet been mapped for how this would best be achieved and where the costs would be met, although the panel has proposed that customers should not wear this cost. Alongside these proposed changes are a series of recommendations relating to agreement length for developers, regular information provision to Embedded Network customers and important recognition that these changes should be implemented over time to allow for the best outcome for customers to be delivered and not rushed through at incredible expense.

There are a number of factors to be taken into account pertaining to the requirement for networks to incorporate clean and renewable energy technology, facilitating market access for all embedded network customers and adhering to increased customer protections. ENM Solutions looks forward to the Final Report and Recommendations release scheduled for December of 2021, ahead of a planned implementation in June of 2022.

These recommendations will be pivotal for a number of residential networks to be aware of, having previously been exempt from the election commitment. The extent to which these will apply is yet to be seen. Consideration of how your network is positioned for a potential transition in line with these changes and implementation of a series of metering upgrades, alongside installation of clean and renewable technology, may be a worthwhile exercise to ensure your preparedness for change.

ENM Solutions is an expert in this area and is well prepared to help you asses your current position and plan for a smooth transition to incorporate clean and renewable technology, while fulfilling your Embedded Network Manager requirements.


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