Embedded Network Conditions and Guidelines in Australia
Background
The Australian Energy Regulator (AER) is responsible for regulating the electricity and gas markets in Australia. They develop various regulatory documents to ensure that the energy market operates efficiently, fairly, and in the best interests of consumers.
Two of the key documents that have been produced by the AER, for exempt distributors and sellers of electricity, are the Electricity Network Service Provider Registration Exemption Guideline and the Retail Exempt Selling Guideline.
Here's what these documents are about:
- Network Service Provider Registration Exemption Guideline: Any party that engages in the distribution or transmission of electricity must either be registered with the Australian Energy Market Operator (AEMO) as a Network Service Provider, or gain an exemption from the requirement to be registered as a Network Service Provider from the AER. This Network Service Provider Registration Exemption Guideline outlines the conditions of holding a network exemption, i.e. what you must comply with when holding a network exemption, and provides a lot of other relevant information pertaining to the distribution and transmission of electricity privately. This is a requirement across the National Electricity Market (NEM).
- Retail Exemption Selling Guideline: Similarly, any party that sells energy to another person for use at a premises must have either a Retail Authorisation with the AER, or an exemption to holding a Retail Authorisation. The Retail Exemption Selling Guideline outlines the conditions of holding a retail exemption, i.e. what you must comply with when holding a retail exemption, and provides a lot of additional information on, what type of exemption you may require, how to apply for an exemption, and other important information.
To get the most accurate and up-to-date information on these specific guidelines and exemptions, we recommend visiting the Australian Energy Regulator's (AER) official website or contacting them directly. Regulatory guidelines and exemptions can change over time, and it's important to refer to the latest documents and regulations for the most current information.
How to Understand these Embedded Network Guidelines
The best way to understand the requirements on a party distributing or selling electricity is to download the guidelines referenced above from the AER's website, and read through the sections relevant to your business case. These documents hold a lot of valuable information and may answer a number of the questions you have. If they don't, you are welcome to reach out to us and we will walk you through it. You can contact us by clicking here.
Broadly speaking, an Embedded Network Manager, or ENM, is required is you distribute electricity to greater than 30 end customers. This is one of the conditions of the Network Service Provider Registration Exemption Guideline. If you would like more information, please contact us.
If so, what guidelines or requirements do I need to meet to stay compliant with these guidelines?
We receive a lot of these questions frequently. As a business that specialises and helps Owners, Body Corporates and Owners Corporations with the conditions of their exemptions, we understand these guidelines intrinsically, and are a go-to source for information about embedded networks.
We’ve tried to provide an easy-to-understand ‘frequently asked’ questions below regarding key embedded network matters.
Frequently Asked Questions
- What is an Embedded Network and Embedded Network Operator? Click here for What is an Embedded Network?
- What does an ENM do? The ENM plays a fundamental role in the market (as required by the network exemption guideline) to facilitate retail competition in Embedded Networks. Before the reform commencing on the 1st of December, 2017, the ENM role did not exist. The ENM has the responsibility of creating and managing the National Meter Identifier (NMI) for each customer that wishes to choose their own electricity retailer. A NMI is what identifies a customer in the Market Settlement and Transfer Solutions (MSATS), which in turn, allows that customer to shop for electricity from any retailer. ENMs are also required to enter data from each customer NMI—as well as from the embedded network’s ‘parent meter’—into MSATS. Essentially, the job of the ENM is to give customers access to the wider market (if they want it) and to make shopping around for electricity services possible for everyone.
- Do I need an ENM? You need to appoint an Embedded Network Manager if your building, Body Corporate or Owners Corporation operates an embedded network for its customers, if there are greater than 30 customers, and if the network is registered in an applicable activity class. These are ND10, NR1, NR3, NR5 and NR6. This requirement comes from a package of reforms put forth by the Australian Energy Market Commission (AEMC), called ‘power of choice.’ The power of choice reforms are designed to create a freer energy services market. In the past, customers have sometimes complained that embedded networks made it difficult or impossible for them to shop for cheaper or better alternatives. An ENM is responsible for making sure this kind of situation does not occur within an embedded network.
- Are there any exemptions to appointing an ENM? No. However, if the Embedded Network does a poll of all customers within the site, and a two thirds majority votes to not appoint an ENM. However, embedded networks in most parts of Australia—including the Australian Capital Territory, South Australia, New South Wales, Victoria and Queensland—should assume that they must abide by all conditions of the network guidelines.
- Is the Embedded Network Manager (ENM) the operator of our network? Not always. The ENM is an accredited role with AEMO that helps customers purchase electricity from a retailer of their choice. This is different to the Embedded Network Operator, that operates the network by distributing and selling electricity to customers at the site.
- Where can I get more information? Your Embedded Network Operator will be the best party to contact for any specific Embedded Network questions. They will work with you to obtain any answers you require. The ENM Solutions’ website may also be of use:
What is an Embedded Network?
What are the New Rules for Embedded Networks?
Meet your Embedded Network conditions with the Help of ENM Solutions
If you operate an embedded network and need to ensure you remain compliant and operate withing these guidelines, ENM Solutions can help. We provide professional services for embedded networks throughout Australia and can assist you in understanding and complying with all relevant guidelines.
Contact us today to learn more.
