If you live in an apartment block, or another type of residential complex, you might find you’re part of an embedded electricity network. So what is it, how does it work, and what can you do about it? We’ll explain.
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What is an embedded electricity network?
An embedded network is effectively a contract between the building owners and an energy retailer for the latter to supply power to all of the properties in that development.
An embedded network can be established wherever electricity infrastructure is privately owned and managed, such as commercial or industries properties, or shopping centres. Embedded networks are also common in high-rise or large residential developments. If you live in an apartment, then chances are this could be you. Think of it like a beehive – your apartment is just one of the hexagons in the electrical honeycomb, and the queen bee decides who the supplier is.
How do embedded electricity networks work?
According to WINconnect, which operates sites across Victoria, New South Wales and Queensland, embedded networks are “established to physically aggregate the energy consumed within a complex to a single metered point”. Sub-meters then measure each tenant’s individual energy usage and they will be billed accordingly.
Another embedded network supplier, OCenergy, says “rather than each occupant negotiate their own contract with various electricity retailers, they combine their purchasing power to obtain electricity at significant discounts to what they could achieve individually”.
There are obviously benefits to embedded electricity networks, though it’s another question about whether those benefits are passed down to you. While there seems to be a lot of incentives of an embedded network for suppliers and building developers, the most important person at the end of the day is you – the consumer. Without you the whole scheme fails, so it’s important that there’s at least something in it for you.
Are embedded electricity networks a good idea?
For building developers, embedded networks seem like a convenient solution to supplying power to all of the properties within one site. Some residents may also welcome having one less thing to worry about when they move homes. However, not everyone will be happy with this situation.
Many embedded network providers will claim to offer very competitive prices, and while many do deliver on this promise, some customers will want to shop around for the best deals themselves. Energy prices are just one part of the equation though. Many energy customers place a great amount of importance on customer service.
Additionally, many energy providers offer to purchase green energy solutions on the customer’s behalf. This means that retailers agree with the customer to feed green energy back into the grid. Should the customer sign up to this scheme, they are effectively ‘carbon offsetting’ their environmental footprint. If the embedded network does not offer these green schemes, it may be off-putting for customers who are interested in environmental causes.
That being said, bill-payers who are part of an embedded electricity network are not necessarily required to stay ‘locked-in’ to that supplier. Thanks to Power of Choice legislation introduced in 2018, embedded networks are required to nominate an Embedded Network Operator (ENO) to help facilitate customers who wish to switch out of the network. While it may be a longer process than if customers were to switch plans themselves outside of an embedded network, it does create some peace of mind for bill-payers that are looking for more choice when it comes to their energy provider.
Embedded electricity network pros and cons
|Convenient, takes the fuss out of choosing a provider.||Switching providers, while not impossible, may be a lengthier process than normal.|
|Increased purchasing power means that you may be able to save money.||There may be little incentive for them to be competitive.|
|The embedded provider may have a suite of green initiatives.||Or it may have none – which is concerning for some customers.|
|Your embedded contract may work in your favour.||The contract could be hard to get out of. Disputes could make your time in the apartment tough.|
What should you do if you are placed in an embedded network?
At the end of the day, it depends on your personal circumstance as to whether or not an embedded network will suit you and your energy usage. For some, the convenience of not having to choose their own energy retailer may be a god-send. But for others who wish for a little more freedom of choice, it may be worth checking what your options are in regards to switching out of your embedded electricity network before moving into a residential development. The laws are constantly evolving to ensure fair choice and supply when it comes to electricity supply in Australia and as such, consumers are being given the upper hand when it comes to picking an energy plan that’s right for them. Be sure to stay up to date with your rights as an energy customer by checking your state or territory government’s website.