January 30, 2025
Embedded networks are transforming the way energy is managed and distributed within multi-tenant facilities in Australia. These networks offer a more efficient, cost-effective, and sustainable way of delivering electricity to tenants, whether they are residential, commercial, or industrial. In this insight article, we will explore what embedded networks are, how they work, the different types of embedded networks, and their role in established modern microgrids.
An embedded network (EN) is a private electricity network within a larger property or development. Instead of individual tenancies connecting directly to the main grid, these networks operate within the property’s boundaries, with internal wiring and metering infrastructure. The party or person who acts as the owner/operator/controller of the network, referred to as the embedded network operator (ENO) or Exempt Embedded Network Service Provider (EENSP), buys electricity wholesale from a retailer at a single‘parent meter’ and then on sells or supplies it to individual occupants. These networks can take various forms and are more common than you may think. In fact, since 2017, more than 1700 embedded networks supplying residential customers have registered with the AER.
Think of the main electricity grid as a highway, delivering power to entire cities and towns. On the other hand, an embedded network is a smaller, private road within a specific development, distributing power solely to those residing or operating there. The owner or operator of the embedded network purchases electricity wholesale from a licensed retailer. This bulk energy is then channeled through a central meter before being redistributed to individual consumers within the network, usually measured by sub-meters in each unit. The supplier or seller of this energy to the individual tenants within the private electricity network, must obtain an exemption from the requirement to hold a license. This applies for both the supply (distribution) and sale(retail) of electricity, through either their local jurisdiction, and/or the Australian Energy Regulator (AER).
Embedded networks can be established wherever electricity infrastructure is privately owned and managed, such as commercial or industrial properties, shopping centres, retirement villages or home estates. They are also common in high-rise or large residential developments. Some of the main types of embedded networks include:
For residents, embedded networks can sometimes offer competitive electricity rates due to bulk buying advantages. Energy savvy tenants may be looking to reduce their energy bills and take greater control over their energy journey. Embedded networks enable the bulk purchase of energy through wholesale rates, enabling cheaper electricity and control over rates.
Additionally, some ENOs might incentivize energy efficiency within the network, potentially leading to lower resident bills. With complete control over the cost of energy, the site owner/operators can also take aim at improving their own distribution within the building or network. Adding renewable energy, making investments in smart technology and energy efficient equipment software and building design.
They can also implement innovative energy solutions like solar panels or battery storage within the network, potentially benefiting both the ENO and residents. Control over the assets and energy journey can also open up innovative solutions, whether to reduce rates, improve access to renewable energy or resiliency, and also open up revenue streams.
Together, these benefits can offer consistently lower rates while also improving the financial position of the owners. Enabling investment to occur in building improvements, add to sinking funds and facilitate building repairs as needed, rather than length wait times for capital accrual.
Over time, the gap between a conventional microgrid and an embedded or private electricity network has closed. Microgrids of any form are in some way built from an embedded network ‘template’. This term now reflects much more accurately the modern private electricity network, operating at full renewable energy capacity, designed and built with energy efficiency and modern complements to our environment in mind. The introduction of new market roles, evolving regulation, and innovative service models has seen the opportunity for private electricity networks forming a microgrid or embedded network to play a key role in future energy solutions. This modern concept or understanding of the capabilities of embedded networks can help shift previous understandings about what they can achieve, in essence, providing us the modern microgrid fora variety of customers, interests and use cases.
In conclusion, embedded networks are now being viewed as a transformative approach to energy management and distribution within multi-tenant facilities in Australia. They offer numerous benefits, including cost savings, energy efficiency, and the potential for innovative energy solutions. As the energy landscape continues to evolve, embedded networks will play an increasingly important role in the development of sustainable and efficient energy systems. A far cry from the embedded networks of the past,with this industry now tightly regulated and an ever thinning market of ever improving Embedded Network Operators.
Should you like to have a discussion about retrofitting your building or network to a modern microgrid through an embedded network, reach out to our team for a transparent and informative discussion about your options.
