Strata managers and residents will get the most out of an investment in solar if they understand the difference between the two main types of embedded energy network model, writes Drew McKillican.
Embedded energy networks – or EENs, as they are more commonly known – are typically used in communities such as residential apartments, retirement villages or shopping centres. With an EEN, all members’ energy use is combined so that a community can secure lower-cost energy with improved energy independence.
Energy independence can be achieved by producing embedded energy generation using community-owned solar panels, bringing benefits for both residents and investors.
Compared to traditional (or non-EEN) network configurations most residents will pay significantly less for their annual electricity usage, with savings also available for common area energy use.
In addition, by removing utility waste and deploying advanced infrastructures, such as smart metering and solar panels, it is possible to lower long-term operating costs and remove the unpredictability in utility pricing.
Smart metering provides residents with detailed energy usage data, so they may choose to avoid peak charges or change the way they use energy-hungry appliances.
A good example is The Orchards, a residential development in northwest Sydney by property group Sekisui House where an embedded network will be operated by Altogether Group.
The community is being fitted with PV spanning the size of 24 tennis courts, about 6,000 square metres, that will produce up to 1GWh of carbon-neutral solar power a year – enough energy to power 166 homes. A monitoring system will allow personalised tracking of how much electricity, gas and water people are using and a bundled energy package suggests savings up to 30% on utility bills.
Who manages an embedded network?
Embedded network infrastructure is generally community-owned. Communities either outsource the management of the network to a retail service provider or utility agency.
Strata managers and bodies corporate need to be aware of the legal and financial ramifications of using either a retailer service provider or utility agency. These two types of arrangements are vastly different, with more significant liabilities and responsibilities for the community when using the utility agency method.
The utility agency method offers a limited number of consumer protections compared to a retail service provider, who must provide a full suite of consumer protections to customers. As a result, many owners of embedded networks wrongly assume that they are not responsible for critical consumer protections under an exempt seller arrangement. In this case, their operation of the embedded network may not be compliant, leaving them vulnerable to financial and legal risk.
Under exempt seller schemes, bodies corporate are responsible for all financial and legal aspects, including gate meter retailer costs, regulated fines, ombudsman costs and the debt risk of unpaid bills, which can be substantial. Furthermore, they still have essential liabilities concerning capturing and declaring data for life support customers and assisting those who experience difficulties paying their energy bills.
In comparison, these concerns are taken care of when using a retail service provider. Strata managers and bodies corporate have access to all the protections that retailers are obliged to provide under the National Energy Retail Law and National Energy Retail Rules. Much of the liability and compliance obligations shift directly to the retailer and away from the body corporate.
Know the options
Energy is such a complex and evolving landscape. Changing legislative requirements make compliant operations of embedded electrical services in strata communities challenging to deliver and maintain. Furthermore, in this day and age, it is a competitive advantage for owners to offer cheaper and cleaner electricity by taking advantage of advances in sustainable technology, such as solar and smart-metering, in conjunction with embedded energy networks.
My prediction is that it is not likely to be long before compliance around embedded energy networks becomes increasingly enforced. We are already seeing the regulator tighten scrutiny of this area.
To support the knowledge of customers, clients and communities, Altogether Group has launched the Altogether Academy, which will focus on topics such as the lifecycle of embedded networks, sustainable technology, utility data, government reform and utility regulation.
More information can be found at https://altogethergroup.com.au/strata-partners/academy/
Drew McKillican is executive manager of energy services at multi-utility service provider Altogether Group.