The Victorian Government (Government) is progressing on its 2018 election commitment to ban embedded networks in new residential apartment buildings, by releasing an Issues Paper to commence formal stakeholder consultation into this issue.

What is an embedded network?

Embedded networks are private electricity networks, where electricity is supplied to an area or building through a privately owned and managed supplier (and not a licenced retailer). As they fall outside the national energy market, concerns have been raised that customers living in embedded networks pay higher prices for electricity, and do not have access to competitive retail offers and adequate consumer protections.

Review into embedded networks

An expert panel is leading the review into embedded networks (Review) and has been tasked with developing recommendations to Government on how best to implement the ban (with appropriate exemptions for renewable energy microgrids). The Review’s primary focus will be to:

  1. place benefits to consumers at the centre;
  2. prioritise equitable pricing outcomes and consumer protections;
  3. future-proof the design of the system; and
  4. ensure that Victoria’s regulatory framework will mirror or enhance the national standards.

Issues Paper

To assist with the Review, an Issues Paper has been released. The Issues Paper defines its keys considerations as:

  1. ‘How to implement a ban on embedded networks in new residential apartment blocks, including appropriate exemptions to the ban for buildings that use renewable energy microgrids to deliver low-cost renewable energy to apartment blocks.
  2. How such a ban would intersect with legacy embedded networks in residential apartment blocks, including options for retrofitting or removing existing embedded network infrastructure if appropriate.
  3. How to ensure that, to the fullest extent practicable, Victorian consumers in residential embedded networks can access the same competitive retail offers and consumer protections as other consumers.’

Importantly, the Issues Paper seeks evidence-based submissions from stakeholders, including possible policy options that may be available to improve outcomes for consumers.

Submissions on the Issues Paper close at 5pm on 26 February 2021.

The Panel is expected to release a draft report for further consultation in June 2021 and a final report will be prepared for the Minister by October 2021.

Next steps

If you have any questions on the Review and Issues Paper, or would like assistance with making a submission, please phone, or email the key contacts below.

Jane Hodder

Jane Hodder
Partner, Real Estate, Melbourne
+61 3 9288 1692

David Sinn

David Sinn
Partner, Real Estate, Melbourne
+61 3 9288 1509