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Embedded Networks

What do an apartment block, a retirement village, a shopping centre, an office block and a caravan site all have in common? They are the perfect recipients of an embedded network.

Instead of electricity, gas or water being conveyed by multiple suppliers through individual access points to the various customers, the power, gas and water arrives at a single gate-meter and is on-sold by the Owners Corporation or site management at below market rates. The savings can then contribute to the balance in the maintenance fund.

Embedded networks are connected to a distribution or transmission system through a parent connection point. The site owner of an embedded network buys energy at cheaper rates from an energy retailer.

As a member of an Owners Corporation or as the site manager, here are some of the advantages of an embedded network:

  • You can maximise energy requirements as a collective operation across one site, increase the proportion of renewable energy consumed and integrate more energy-efficient products at wholesale pricing.
  • There are reduced connection charges.
  • As a group representative, you have more bargaining power in negotiating retail rates.
  • Profits can be put back into the owners’ corporation accounts, such as the maintenance fund.

Things to think about:

  • Most people that sell energy in embedded networks are known as exempt sellers because they do not need to become authorised by the Australian Electricity Regulator as energy retailers. However, exempt sellers and owners and operators of embedded networks have to follow certain rules. These rules are there to protect your rights. Do you know what those rules are?
  • You could be sued by a customer for a faulty meter or a billing error.
  • Do you know how to run an energy provider business? Do you have an understanding of debt collection if a lot owner doesn’t pay?
  • Has your Owners Corporation been sold an embedded system from a company associated with the developer? You may find that you don’t own the meters and that you are stuck with a long-term contract that gives you minimal benefits. (However, with new laws in place you may be able change this situation.)

Setting up an embedded network is complicated and few lawyers are qualified or have the first-hand knowledge of what is involved.

Top Notch Legal has a wealth of experience in drawing up contracts for embedded networks.  If you want to know more about how you can benefit from embedded networks or would like us to help with your contract, give us a call or take a look at our latest videos which you will find on this website under media.

For more information go to the Australian Energy Regulator website

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