Electricity network deregulation could allow 'second tier' of energy companies

Electricity network deregulation could allow 'second tier' of energy companies

A second tier of energy retailers will be able to enter the Canberra market, if a bill to allow embedded networks passes the ACT Legislative Assembly.

The legislation to cut red tape within the Utilities Act is set to be introduced into the ACT's parliament on Thursday.

Consumer affairs minister Shane Rattenbury.

Consumer affairs minister Shane Rattenbury.Credit:Rohan Thomson

Consumer affairs minister Shane Rattenbury said while he was not aware of any embedded networks in Canberra right now, under the current rules the operator would have to register as a utility.

That puts a small company running the power contract for one apartment block in the same category as a giant retailer like ActewAGL.


Mr Rattenbury said that was "unnecessary" as a company that size was unlikely to be carrying out the same activities as a large-scale provider.

"It's about having the right set of rules for the right sized operations," Mr Rattenbury said.

"In not having that burdensome requirement to become a fully-fledged utility you can allow the innovators to come into the market more readily."

Embedded networks are usually operated in apartment complexes, commercial office blocks, shopping centres or retirement villages.

Instead of each individual tenant having a contract with an electricity retailer, the building has one contract and the individual power usage is carved up from there.

The arrangement allows individual tenants to access discounted power rates usually only available to big users.

Should the legislation get up, Mr Rattenbury said it was likely we would start to see embedded networks popping up in Canberra in about 12-18 months.

"The way I would expect to see this rolled out is either a whole apartment building, so the developer will partner with an energy service provider at the beginning and put the system in the building so it will be part of the offer to the potential owners of the apartments in the building," Mr Rattenbury said.

"The other place you might see it is somewhere like Ginninderry, because they're very innovative out there as well and they might decide that 500 houses in the new suburb will sit within an embedded energy network because you could imagine a model where an embedded network has batteries as a part of it.

"The software would put power into the batteries at 2am when the power's cheap for example, and then instead of buying energy out of the grid at 4pm when it's at its most expensive you just suck energy back out of your batteries.

"That's the sort of innovation people are going to do but obviously it's going to take a little while to implement those systems but the new apartments on Northbourne, in Belconnen, those are the sorts of places I'd expect to see it first, but that will take 12, 18 months.

"They'll get permission to do it now then they'll start designing the systems and building the buildings and then you'll see it come onstream in that way."

Nicky Ison, the founding director of Community Power Agency, said allowing embedded networks was a "step in the right direction" but was just one of a number of measures the government could bring in to help cut power bills.

"Embedded networks enable tenants to better access solar and that's really good but it doesn't address all the market barriers and failures that prevent solar access," Ms Ison said.

"They need to facilitate a range of community energy models and landlord tenant models."

One such model is the Solarshare community solar farm, planned for next to the Majura solar farm.


ACT investors raised $3 million to build that farm.

Ms Ison said other farms like it could offer investors a rebate on their power bill, allowing renters to get the benefits of solar power.

Katie Burgess is a reporter for the Canberra Times, covering ACT politics.

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