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In October 2018, the Victorian Government announced an election commitment to ban embedded networks in new residential apartment buildings. Including appropriate exemptions for buildings that use renewable energy microgrids to deliver low-cost renewable energy to apartment buildings.

The Government’s election commitment was made in response to ongoing concerns that customers currently living in embedded networks:

  • pay higher prices
  • do not have access to the same level of consumer protections as other Victorians.

An Expert Panel (Panel) leading the Embedded Networks Review (Review) developed recommendations to the Government on:

  • how best to implement the ban
  • how to ensure that, to the fullest extent practicable, embedded network customers in existing residential settings can access the same competitive retail offers and consumer protections as standard electricity customers.

After an extensive review, the Panel developed a comprehensive package of recommendations to the Victorian Government on how to best implement its commitment to ban embedded networks in new residential apartment buildings.

View the 2022 Final Recommendations Report:

Victorian Government response to the Embedded Networks Review

The Government supports all the Panel’s recommendations after hearing that:

  • The residential electricity embedded network market in Victoria is not working in the best interests of customers.
  • Intervention is required to ensure better consumer outcomes while supporting renewable energy uptake.

Some recommendations will be modified slightly in response to stakeholder feedback, and to ensure practical and effective implementation, the government will maintain the Panel’s intent and reform direction.

This includes transitioning embedded networks into Victoria’s licensing framework. Ensuring consumers in both new and existing residential embedded networks will have the same:

  • retail market access
  • legal protections
  • regulatory oversight as other Victorian consumers.

Read the Victorian Government response

A note on terminology: In the Final Report, the Panel use the terms ‘local energy networks’ and ‘local energy service’ (or ‘LES’) to describe embedded networks after the recommendations have been implemented.

In the Government response, the original wording used by the Panel in their recommendations has been retained. However, the government refers only to ‘embedded networks’ for clarity of expression and ease of reference.

Implementation of the Expert Panel’s recommendations

As a first phase of reform, the GEO has been changed to require new embedded networks to meet the renewable energy condition to operate legally. To give effect to the ban, the Panel recommended that at least 50% of electricity consumed by customers at the site be met from on-site renewable sources.

The revised GEO was published in the Government Gazette on 29 September 2022, with the new GEO condition taking effect from 1 January 2023. You can get a copy of the new GEO here: Victorian Government Gazette | No. G 39 Thursday 29 September 2022.

The Panel also recommended further reforms to improve outcomes for all customers living in embedded networks, including those in existing sites. The Victorian Government supports these additional recommendations and will legislate further reforms to introduce licensing, and to enhance consumer protections and provide access to competitive retail offers for all embedded network customers.

These reforms follow other changes the government had already made to improve customer outcomes in the embedded network market, such as expanding access to the dispute resolution services of the Energy and Water Ombudsman (Victoria) (EWOV) and ensuring fairer prices by setting the Victorian Default Offer (VDO) as the maximum price for embedded network customers in September 2020. Further, in 2021 the government legislated the Energy Fairness Plan, banning harmful sales practices by energy retailers and strengthening the power, oversight, monitoring and enforcement role of the Essential Services Commission (ESC).

Once all the Panel’s recommendations are implemented, the residential electricity embedded network market will be fairer, with improved consumer protections and increased access to affordable and renewable energy for all Victorian embedded network customers.

For more information, visit the Engage Victoria website for the Embedded Networks Review.

2017 Review of the General Exemption Order

The then Department of Environment, Land, Water and Planning (DELWP) undertook a review of the GEO 2002 to determine if it was meeting the needs of consumers and embedded networks. The review was informed by stakeholder consultation, including submissions on an issues paper and draft position paper and stakeholder workshops.

DELWP's final position was published in August 2017.

As a result of that review, the GEO 2017 was made, which can be found here:

The General Exemption Order has been amended twice:

  • on 30 May 2019, to freeze the applicable transitional maximum price at the local retailer standing offer rates that were in effect before the introduction of the Victorian Default Offer, while the Essential Services Commission reviews pricing in embedded networks
  • on 9 July 2019, to make amendments to further clarify the transitional maximum price.

Page last updated: 23/01/25