Red Tape reducing the power to choose a better way
The popularity of embedded electricity networks is increasing, with recognition they benefit building owners, managers and consumers.
But there remains a big stumbling block to greater adoption of this innovative energy supply solution.
Red tape makes the approval process more complicated and longer than it needs to be.
The Australian Energy Regulator (AER) needs to streamline and simplify applications, which can take 18 months to two years to complete.
Small project, big delays
Here’s a real-life example.
A landlord trying to save his tenants money by installing solar power, applied to install an embedded network (EN).
This way, the benefits of the solar power would be shared equally among all residents.
It was only a small apartment block of four units.
He surveyed all the tenants, as required when converting a traditional electricity supply arrangement to an EN.
Every one of them supported the transition.
So, the landlord had unanimous backing and lodged the application.
The approval process for this simple project took 18 months, delaying savings for the building manager and the residents.
Let’s look at how it took so long, and what needs to be done to improve these timeframes for other landlords across Australia.
Why change to an embedded network?
ENs simplify energy distribution for property managers in muti-tenant buildings.
Through buying in bulk, they can lock in better prices on long term contracts and issue simplified bills without any price shocks.
Financially it’s a win-win, with tenants generally accessing cheaper power, while managers can build in a profit margin to earn additional revenue.
Having a single (parent) meter connected to the grid also helps property managers monitor energy use across the building, driving greater efficiencies.
What is an embedded network?
An EN is essentially a private electricity network, operating in a defined area – usually an apartment or office tower, shopping centre or caravan park.
The network’s ‘parent’ meter is the sole connection point to the electricity grid. Each tenant has their own ‘child’ meter, which measures how much electricity they use.
The benefits of cheaper electricity are shared among everyone in the EN.
EN operators can also install solar power, battery storage and even EV chargers.
Why can it take so long to have a new embedded network approved?
Australia’s electricity rules and regulations are complex.
But to simplify, there is one overarching authority – the Australian Energy Regulator (AER).
Underneath the AER sits power generators, power providers and electricity retailers.
To operate ‘outside’ this system, ENs generally require two special permits.
Network exemption
Applies to the physical electricity network infrastructure
Retail exemption
Applies to the sale of electricity to embedded-network customers.
These exemptions are usually required for each individual EN, meaning there’s an application process each time.
But even before those applications can be made, approval needs to be obtained from the electricity provider.
The provider needs the following information, before it can approve a new EN:
Site plan including lot boundaries and the connection point between EN and provider
Electrical diagram showing position of parent and child meters
Switchboard compliance statement, including construction layout.
This process can take three to four months, even before applying for the network and retail exemptions.
What would speed up the approval process?
There’s plenty that could be done to simplify and streamline the system for applying for an EN.
The AER should redesign its approval process to be more efficient and supportive of the benefits of ENs.
Here’s a starting point:
Reduce processing time
Faster reviews of applications
Set clear timelines for processing applications
Streamline applications
Simplify application requirements
Apply clear, concise guidelines as a base for all applications
Positive attitudes towards ENs
Shift from a negative stance on ENs to a more supportive starting point
Design assessment framework to promote positive community and environmental outcomes
Increase resources
Allocated extra staff to processing applications
Improve internal processes
Build greater knowledge about ENs within the AER.
How many embedded networks are there?
It’s safe to say the delays in processing applications are slowing progress in this emerging alternative to providing electricity.
In 2025, only 79 retail exemptions have been approved as at the time of writing this article (6 June).
Across Australia, there were 3,757 registrable retail exemptions in effect.
Let’s get moving
Let’s go back to the first example:
One landlord
Four tenants
All of them wanting to establish an EN where they live and install solar panels.
This should be a straight-forward conversion.
The decision was unanimous. It was small-scale. And the AER has already identified benefits for customers in an EN.
So why should the approval process take 18 months?
The red tape around ENs needs to be cut. The mechanism for applying for an exemption needs to be simplified. And the AER needs to be properly resourced to process all applications efficiently.
Empowering ENs empowers landlords and building owners to deliver better outcomes for their business and their tenants.
Humenergy provides lower cost, more transparent energy solutions for Residential and Commercial Strata Communities. We work with Property Developers and Body Corporates to create win-win energy solutions that benefit developers, owners, and residents alike.
Humenergy purchases the gas in bulk and on-sell hot water to the residents at low energy rates, additionally Hum can supply and install best in class remote sub-metering systems.
If you wish to look into our solutions for Bulk Hot Water and sub-metering, get in touch with the Hum team today.